Mid Atlantic Capital LLC - Retail Net Branch Operation
2008-09-18
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Branch Managers have received an announcement that Mid Atlantic Capital, headquartered in Sewell, NJ is closing its doors. Cited was a loss of volume and "the evergrowing expense of legal actions generated by numerous Lenders attempting to recover their losses." Employees expecting direct deposit of their paychecks today may be in for a disappointment: according to one source, the company is unable to meet payroll for its remaining branches and employees. Owner Don Forman noted in the memo, "legal and accounting professionals are in the process of dealing with all of the outstanding issues that need to be resolved."
One of those "outstanding issues" is ongoing litigation brought by Merrill Lynch's First Franklin on 2007-09-07. Referencing ten loans Mid Atlantic Capital brokered to First Franklin, the lawsuit alleges breach of contract, negligent misrepresentation and unjust enrichment. Damages are claimed in the amount of $1,027,280.90. A settlement conference has been scheduled for November 13, 2008.
Reported to us as a net branch operation that "had the most branches of any company in New Jersey," Mid Atlantic Capital boasts 75 branch locations with over 600 employees on their web site, licensed to do business in 23 states. Another email stated, "They've already shut down 75% of their net branches and left 10 open. The 10 open are having problems getting their money out of their accounts." Several told us the company recently lost its warehouse funding facility. "Without a warehouse line in place," one source wrote, "the branches they have decided to keep [are] looking for another opportunity."
Offering a complete range of Retail lending products, Mid Atlantic Capital was also an FHA/VA approved lender. Email from a source familiar with the company indicated "they were probably 20 M a month or more total at their peak." We attempted to contact the company without success. Contact us if you can provide additional details. Your comments below are welcome.
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Zuko at 17:26 2008-09-18 said:
As an outsider looking in...its easy to point fingers at someone else when there is a failure, but my advise is to look at yourself and those around you. With the exception of a few strong branches, most were doing nothing. The cost of everything involved to run a company like MAC and offer what was offered was alot. Add to this the amount of loan officers who would run a deal through the company, knowing it was not a good deal or the income was worked, appraisal worked or whatever...just to close the deal and get it funded....not caring that the company would be the one to suffer when the deal would go bad...and now everyone suffers who was a part of MAC. So, who is to blame for the lawsuit(s) like listed above??? and the failure of the company, MAC or the people who submitted the bad deals and didnt do their job the way it should have been done? Are those the same ones upset about payroll and the closing of MAC..thank those loan officers who actually helped put MAC on its back. I have known the owners of MAC for some time now, done alot of business with them and only know them to be honest, caring and loyal. They ran MAC the way that the Dept of Banking and the states require, the legal way. Was everything done the way it should have been done with the branches and the money, maybe not. Everyone on the outside looking in has a better way that they would have done it correct? Well, why are they not the ones taking the risk and doing it then. What am I going to do, move on, thank them and hope everything works out for all involved. Everyone loved them when things were good and when things started going south, almost everyone turned their backs and started with the blogs, emails and trash talk. Do the right thing...Nuff said PermalinkFIXMYLOAN at 00:29 2008-09-21 said:
I left when things were good but starting to turn, and we were a straight branch with a good rep...still are, just at another location and with another company. They NEVER had to repurchase anything my branch streeted...NEVER. I was sad to hear they were in trouble over buy-backs, but there was/is a lot more behind this, and you may or may not know that. If you were an A/E that called on them, then you called on me and know me...in which case...you already know who I am and that I don't BS. I am certain there is far more to the end than I know, and I was there for quite a while. I thought highly of the folks there, and am sorry to see they are in financial straits, but it was not a surprise. The real shame is they were the class of the local market for about 3 years...and I can see how that could have continued if "subsidizing efforts" weren't applied. If they started a new company without the deadwood, and I was looking to start over from where I am now, I would check them out...trust, but cut the cards. Permalinkadd a comment | go to forum thread
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Important: This company is on our list of lending operations that have "imploded". However, please note that "imploded" is a somewhat subjective and does not necessarily mean operations are ceased permanently: it can mean bankruptcy filing, temporary but open-ended halting of major operations, or "firesale" acquisition. All information here is provisional, and may contain inaccuracies (especially newer information). If you are planning on doing business with this company or any other one listed on this site, you should inquire with them directly on whether they can still meet your needs. Many are still operating in some capacity.