Mortgage company closing; homebuyers worried
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Russ Wiles
The Arizona Republic
Aug. 15, 2003 01:23 PM
A California mortgage banking firm has told Arizona regulators that it's shutting down, imperiling an unknown number of Arizona loan applicants.
The Phoenix office of Capitol Commerce Mortgage isn't open Friday amid indications the Sacramento-based firm is going out of business.
"One (co-owner) confirmed they are going out of business, closing the doors and attempting to get locations for the loans caught up in this mess," said Bob Charlton, an assistant superintendent at the Arizona Department of Banking.
The department had received between 10 and 20 calls from nervous loan applicants as of early today, he said.
A Capitol Commerce owner in Sacramento didn't return phone calls. One mortgage broker who conducts business with the company - and who declined to provide his name - said as many as 2,000 Arizonans may have outstanding loan applications with the firm, which has an office at 7310 N. 16th St. Capitol Commerce also operates in California, Colorado and Oregon.
Charlton said it was unclear how many Arizona customers might be hurt, and in what ways. But at a minimum, it appeared homeowners who locked in preferential interest rates weeks ago might lose those commitments.
Rates have spiked in recent weeks, and it's unlikely lenders taking over these loan applications would honor what are now below-market rates. Charlton and other industry experts said Capitol Commerce's difficulties may stem from a failure to hedge against the rate hike.
Charlton said the banking department will send examiners to Capitol Commerce's office next week to review the Arizona operation. In the meantime, he suggested that loan applicants download, complete and submit a complaint form from the department's Web site at www.azbanking.com.
About 400 mortgage banks and 700 mortgage brokerages are licensed in Arizona.
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