The Mortgage Lender Implode-O-Meter News Pick-ups: Imploded: Perfect Mortgage

Update - 2009-04-28: Sources have confirmed that Perfect Mortgage also shuttered its retail net branch operations "about six weeks ago," as one former employee told us or roughly in the beginning of March. It is unclear how many employees in all were affected, but a former PerfectFHA Wholesale AE we spoke with remembered Retail had "between 10 and 15 offices at one time."

The web site is still up, but the toll-free number for Perfect Mortgage's headquarters in Southfield, MI has been disconnected. A direct call to co-owner Matt Bergin at parent company Bergin Financial in the same location was not returned.

The original tip we received indicated all employees had been let go and that they "lost their warehouse lines entirely," the primary of those reportedly being GMAC.

Original Listing - 2009-02-17: The announcement was made around 4:00 PM EST on 2009-02-16 that Southfield, MI based Perfect FHA was eliminating wholesale. The memo to brokers followed soon after:

"Perfect FHA, the Wholesale Lending Division of Perfect Mortgage, has made the decision to eliminate Third Party Originations. Therefore, we must discontinue all Wholesale production for an indefinite period, effective immediately. This includes all loans already submitted but not yet closed."

Perfect Mortgage is a retail lender and wholly owned subsidiary of Bergin Financial, Inc. that has a realtor-targeted net branch operation, Perfect Mortgage Partners, as well as wholesale through Perfect FHA. According to their website(s), they operate in 40 states. Perfect Mortgage will continue to originate and maintain its net branch operation. Originations for Bergin and its subsidiaries were just over $5 million per month on average in 2007. Neighborhood Watch reports 8.26% of FHA loans over the past two years in default or claim.

Perfect FHA was known for its manual underwriting and utilization of the Broker Referral program, which enabled non-approved brokers to receive referral fees for FHA loans (which Perfect Mortgage originated through retail). A source familiar with the company told us they had about 25 AE's, but had only been doing about $11 million per month in volume. Feedback on this lender's exit from wholesale has been tremendous. They were perhaps the last remaining wholesaler doing FHA's under 580 FICO's, so we are including them on our list based on market impact.

Feel free to post your comments below or email us with additional details.

EaglesFanInLA at 11:16 2009-02-19 said:

This email was sent to me the evening before we were to get the keys to a house.

Dear Allen, Joy and Jib, Please read the email below from Jay McMaken from Perfect FHA (the lender that emailed loan docs on Friday the 13th) of which you both signed on Saturday the 14th. What they are saying is that: Perfect FHA shut down their whole sale operations on Monday afternoon and they will no longer do loans or close the loans that were ready to close such as yours and I am sure hundreds of others. Unfortunately for the past two years hundreds of lenders have closed their doors because of the economic duress that they all have undergone, I cannot explain why specifically they did not honor our loan docs and funding of our loan…… if you would like Jay’s number is down below, please feel free to call him or email him jmcmaken@perfectfha.com I want you all to know that the news was devastating, I wish with all my heart that this had not happened, because Lord knows you have been through hell with this escrow. On a positive note we have submitted to Essex mortgage today and they have agreed to give us an approval, they will doc it and most important FUND and close the loan for us, all of this will be done efficiently and expediently…….. All I beg is that you will allow us to follow through with Essex mortgage and give it ONE more shot to get you your keys, Essex Mortgage has everything they could possibly need and more. Thank you for your eternal patience and longevity, you have been great in getting us everything that we have asked of you and so much more, it truly is amazing and for that I am eternally grateful to you, please just a little longer. Sincerely, Permalink

SavedByHisBlood at 15:47 2009-02-19 said:

As one of their former retail branches I can verify their was no true understanding by management on how to take volume from "non authorized FHA brokers" and streamline the process. The file input from these brokers who did not understand how to properly originate FHA loans was so horrid it took 5 loans turned in to get one to close. Lousy pull through meant turn times as slow as molasses. The quality of the product was horrid but they were chasing the cash rather than chasing the quality of the business. They are good people but lousy businessmen. Poor business plans bring failure and the proof is what has now happened. Such a shame that they hired so many good people as AE's and made promises that now leave so many on the street. Permalink

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Perfect Mortgage - PerfectFHA - Retail, Wholesale - FHA Specialists

BobbaLouie at 16:56 2009-02-17 said:

sweetpcdenise at 19:04 2009-02-18 said:

mlevine217 at 19:43 2009-02-18 said:

loansurgeon at 23:56 2009-02-18 said:

mahalo guy at 00:21 2009-02-19 said:

EaglesFanInLA at 11:16 2009-02-19 said:

SavedByHisBlood at 15:47 2009-02-19 said:

PEPPER at 18:54 2009-02-21 said: