Vanguard Mortgage & Title, Inc. - Retail Lending Operations


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Update - 2008-09-26: An email distributed on September 26 and signed by the "Board of Directors" states "Vanguard M & T, Inc. has officially ceased operations as of September 19th, at 5:00 pm (EST)."

It's over. From an original tip received May 22nd that they would cease operations... to "a majority vote to cease operations in response to the memorandum which was emailed to investors" September 19th. It's done.

Update - 2008-09-12: On September 12, 2008 the Board of Directors circulated a memo to shareholders requesting them to vote for the closure of Vanguard M & T, Inc. The memo signed by Joe Nocito Jr. states Vanguard "has become insolvent."

"Currently, there are no existing funds to continue operations, our bonds have been cancelled in all states of operation, and our licenses have been subsequently returned."

Click here (pdf) to read the entire message.

Update - 2008-06-27: We earlier published a tip we had received stating that Joseph Nocito and Francisco Fernandez, CEO and COO respectively of Vanguard Mortgage, had been found guilty of criminal charges and were scheduled to be sentenced. Upon further investigation, we learned that this tip was inaccurate.

The theft and stolen property charges against Mr. Nocito and Mr. Fernandez are still pending, and there have been no admissions or findings of guilt. The charges concern a company that Mr. Nocito and Mr. Fernandez operated, but that is not related to Vanguard. Trial on the charges is set to begin on November 10, 2008.

Update - 2008-06-24: To quote one tipster's comment, "things are heating up with Vanguard Division Managers and Joe Nocito..."

This just in, a shareholder forwards a 2008-06-24 follow-up to this memo sent to some (not all) Division Managers on 2008-06-20 by CEO Joe Nocito, increasing pressure on the DM's and demanding they surrender their stock and repurchase their own assets from Vanguard in order to sever their individual operations' relationship with Vanguard. Additionally, a 2008-06-23 missive ordering all the Divisions to "Cease and Desist Originations" has been posted in its entirety on the Discussion Forum topic for Vanguard.

We were able to obtain a blank copy of the DAPA's executed by Division Managers.

One shareholder made this observation:

"Until and if Joe [officially] shuts the company down, he has no rights to the assets he is demanding payment for. As long as the partners haven't gone out of business, those assets are theirs to keep. If Vanguard shuts down, the assets are [the partners'] to keep. If it's a BK, the assets belong to the trustee."

And this commentary, from another anonymous tipster:

"Let me see if I've got this straight:

Mortgage Meltdown - an ultimate implosion.

Vanguard tells its own Broker origination units they are operating illegally if they do not pay the company to buy their own shares back. In the latest 'twist' of a mortgage company gone wild, we have a 'hostile takeover' CEO, currently charged with felony theft in other jurisdictions, telling shareholders that if they want to see any return for their investments, they have to sign off and pay monies back to the parent company.

Not only the hostage position of 'buy-in-again' under a different agreement, but if the 'shareholding' companies do NOT pay up, they will be reported to regulatory authorities for closing loans in the company name.

In a desperate last ditch attempt to hold some level of cash flow control, new CEO Joey Jr. has stated:

"Many of you have already violated the terms of your DAPA's and employment agreements by depositing Vanguard M & T, Inc. funds into your personal and/or previous company bank accounts not established by Vanguard M & T, Inc."

Shame on people trying to close loans and not send the money to Joey Jr.

It's no doubt that Joey admits the majority of the shareholder Branches are not signing away their investments to him. Attorneys must be salivating... and standing by."

Did that tipster say "Felony Theft?" Another tipster pointed us to this 2008-06-02 article in the Beaver County Times about criminal charges filed in Harmony County, PA involving another of Joey & Frank's exploits:

"Francisco A. Fernandez, 37, of 135 Woodcock Drive, Sewickley, and Joseph W. Nocito Jr., 37, of 8 Thawmont Drive, Sewickley," were charged with "receiving stolen property and criminal conspiracy to commit theft."

"Nocito was president and signed the lease and legal documents for IGP."

"Police said Fernandez was vice president of operations and was present when the items were removed."

This might not be breaking news, but it's likely to be news to the shareholders and outsiders who have been sharing info on our Discussion Forum about Vanguard's demise and Nocito's role therein (along with cohort "Frank" Fernandez). It's been reported by employees/shareholders and forum posters that Vanguard's Littleton, CO assets (equipment, etc.) were transferred to Pittsburgh, PA at Nocito's direction. This latest development may be an omen.

According to Gene Pash, CEO of Ambridge Regional/Value Ambridge Properties who filed the initial report with police, a hearing on the matter is scheduled for Friday, June 27th. Pash declined any further comment due to the pending litigation. The pending litigation is Joey's appearance in court on the felony theft charges!

We spoke with Sgt. Essek at the Harmony Twp. (Beaver County, PA) police department, who confirmed the Preliminary Hearing date of 2008-06-27, and gave us a bit more insight. They believe they have a prima facie case against the Nocito's International Glass Products (IGP). Apparently, IGP had acquired the assets (including the lease) of the previous tenant, AccuGlass, who had at some time prior updated the electrical system... when IGP vacated the space they took it - "the whole box." It was valued at $42,500.

Fernandez was known to Vanguard shareholders as "Frank" - Joe's partner - according to info we were previously provided.

Connecting the dots:

  • Nocito's association to International Glass Products LLC (IGP) is further demonstrated by this article in which mentions "Joseph W. Nocito Jr. of International Glass signed as general partner for Northland Properties."
  • Northland Properties is owned and controlled by Nocito's Sr. & Jr.
  • Both Nocito's and Northland (among other business interests) were named in an adversarial proceeding for similar allegations filed in contest of another unrelated (but similarly controlled) company's BK by the Trustee for Servatus, Inc. - a topic covered most extensively on our Discussion Forum with links to the court filings evidencing same.
  • The Nocito's were ordered by the Trustee to repay $250,000 to the estate of Servatus, Inc. in that case.

We will continue to provide updated information on the Vanguard Discussion thread on our Forum. Feel free to add your comments to this article, or the Forum.

Update - 2008-06-12: Right behind yesterday's email to shareholders, we receive a copy of this (pdf) rather lengthy discourse one shareholder composed.

It seems CEO Joe's latest proposal may not be well received by everyone.

Another shareholder who contacted us pointed out that, while most are bound to Vanguard by either a Defined Asset Purchase Agreement (DAPA) or a simple Asset Purchase Agreement (APA), that a condition for "termination of their employment" exists if, for any reason, they are not paid for two consecutive periods. We were told at least two employees are still receiving regular pay, but for most employees the last payroll was processed on 2008-05-22. One period has already been skipped (2008-06-05), and the next is due for 2008-06-20.

There is now a topic on our Discussion Forum for Vanguard.

Update - 06-11-2008: An email to shareholders went out 06-10-2008 stating Vanguard is "facing financial difficulties" and describes the current corporate activities as a resurrection of sorts. We have been told not all shareholders were notified.

New CEO Joe and partner are asking existing investors to pony up another $2.5 million and if they do, he'll come up with $5 million.

"All current shareholders and debt holders will need to agree to a dilution or reduction in the amount of their Vanguard investments."

In addition to listing "$4.2 million in debt" the company states any coupons or dividends "from any class of stock or debt will not be paid and needs to be forgiven as well."

Click here (pdf) to read the entire one-page email.

Update - 2008-05-23: New CEO Joe Nocito Jr. warns his "employees" of "DISCIPLINARY ACTION" if they talk to the media.

"There is to be NO communication with ANY members of the media."

Stifling free speech may have worked in some third-world countries, but somehow there are still hostile Exec's who think it will work here in the US. To read the full text of his email sent out 2008-5-22, click here (pdf). It appears there are a "TEAM of legal experts... working diligently" to find and plug the information leaks.

A few hours later, Mr. Nocito Jr. sent out another missive starting with the Forrest Gump quote "Life is like a box of chocolates..." Opening up this box it appears that TBW may be controlling the fate of Vanguard:

"I was told to call the President of TBW, Ray Bowman, first thing this morning. I thought it would be in Vanguard's best interest for your CEO to contact the President of the company that is Net Funding our loans thus impacting our ability to continue operations.

I had two very good conversations with him today trying to figure out a "more reasonable" solution concerning our ability to close loans for our customers that are in the pipeline at TBW."

As a warning to his entire staff Mr. Joe Jr. makes a last ditch effort at building company loyalty:

"Our corporate attorneys are taking this matter very seriously and we our strategizing about our next steps LEGALLY.

We will fight these FALSE accusations made about our company and your Executive Officers with the respective authorities, quickly and powerfully.

If anyone has knowledge to the source of the "leak" to Mortgage Implode. I would encourage you to step forward immediately and share what you know with me in a confidential manner.

A formal investigation is being planned to find the "Source" of these FALSE and SLANDEROUS accusations made to the industry today."

To read the full text of this second email, click here (pdf). We have seen some of the responses among the "employees" which range from humorous to incredulous... some of which offer information into the past business affairs of "Joey." Stay tuned.

Original Listing - 2008-05-23: This information was available to us yesterday 2008-05-22, but we committed not to release anything before final paychecks were received by employees today (they got them).

From a memo sent by a tipster, we learn that Vanguard Mortgage and Title, Inc. has ceased doing business.

"In the preceding weeks, many events transpired which brought about the current situation of Vanguard Mortgage & Title. At this point in time, Vanguard's corporate office staff have been terminated, and we are closing the doors in Littleton permanently."

Vanguard had the appearance of a net branch operation, but the business relationship with their acquired branches, or "Divisions", was instead a reciprocal partnership with co-branding and stock sharing. There were between 25 and 28 of these "Divisions" at one point, according to a source we spoke with, and over 200 employees. reports 16 offices in 16 states. They were FHA-approved and able to do business in all 50 states. Our source said the divisions were collectively originating around $55 million in monthly volume, although former CEO Michael Knight says $40 million.

The memo goes on to extend an invitation to the Division Managers to attend a meeting in Chicago, IL 2008-05-22 to "discuss any business which requires closure and possibly present an opportunity to any parties interested."

In trying to discern the reason for Vanguard's sudden demise, we refer back to this comment from the memo:

"For the past several weeks our time has been solely devoted to the discovery of a solution to the tumultuous financial state we were left in as a result of Michael Knight's fiscal irresponsibility. There were several financial obligations which were discovered as we continued to investigate Vanguard's current situation that, at this point in time, are impossible to recover from."

We spoke with Mr. Knight, and he provided us with a copy of this rather lengthy rebuttal he sent to Division Managers in response. With regard to Joe Nocito, Jr., he wrote this:

"It turns out he is a Venture Capital / Corporate Raider and he misrepresnetd himself to me as an angel investor at all times up until we were on fumes and down to the last 30 minutes of having to shut down the company on March 20th. It was his email that day when he and Frank put in the $200k we needed to complete a $500k raise or go out of business, that Joe's electronic signature showed:

Joe Nocito, Jr., CEO, Castle Venture Partners

I never knew he was a VC until that moment and knew we had been had. We just did't know at that moment it would accelerate and turn into a hostile takeover in lieu of giving up Operational Control, signatuires on checks, etc as we (the Littleton office) continued to run the mortgage banking platform."

Michael Knight would like to make it very clear (full text available here):

"Vanguard went out of business for one reason: like 259 companies before us, we ran out of money because of the mortgage meltdown that started in mid 2007 and not because of any financial improprieties on my part... plain and simple."

An inside source told us more about the 'situation.' What follows is a summary of their story:

In 2005, a group of investors pooled $38 million in capital to fund the company and its partnerships. [That figure according to Knight, is off by a factor of 10]. When it was realized in March of 2008 that Vanguard was undercapitalized and needed to raise more cash, Knight looked to Joe Nocito, a Division Manager and CEO of Pittsburgh, PA mortgage broker partner Castle Mortgage. According to our source, Nocito pledged $5 million to the effort on the condition he replace Knight as CEO, which Knight agreed to. But soon afterward at a 2008-04-24 meeting, Knight was asked for his resignation.

"There was an altercation" the source said, "and the police were called." We put a call into the Littleton Police Department to verify, but Knight readily acknowledges he was the one who made the call. In his rebuttal, Knight comments:

"Upon assessing this was a civil matter, they requested permission to leave. Joe refused stating, "he felt threatened by me." The Littleton police commented to Jeannie Berens, after visiting with Joe for a few minutes that, "that Joe was an ass.""

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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.