First Rate Capital Corp. - Agency, FHA
We've been informed that First Rate Capital Corp. based in Melville, NY has closed its doors. Their web site has been taken down in the past week (view cached from 2009-09-11). The company's main phone rings busy and an alternative number listed by the BBB in NY isn't answered at all. That listing is for one of two branches shown on CityTownInfo, the second of which is in Florida and has not been associated with First Rate Capital "for a couple of years" according to the person who answered.
The company's recent volume was purely retail -- about $5 to $7 million monthly by one report. A wholesale division that operated under the d/b/a Axis Mortgage for an estimated 8 years was shuttered on 2009-02-19 based on a memo of the same date that we obtained. Originations of residential mortgages appears to have peaked in 2005 when monthly loan production averaged over $20 million but have steadily declined in the years since. Tipsters estimated 30 reps worked for the wholesale side at one point; an overall headcount for the company could not be determined.
According to HUD's Neighborhood Watch database for the two years ended June 30, 2009 First Rate Capital's ratio of defaults on 1st mortgages was 295% of the national average. Loan repurchases were suggested as one possible reason for the company's closure although public records indicate no pending litigation for that purpose. HUD had previously placed the company on 6-month's probation as reported in the Federal Register, citing First Rate Capital for "misrepresentative advertising" and recruiting "prohibited HUD/FHA branch arrangements." A case pending in New York's Supreme Court could also be a significant factor as it calls for the dissolution of the corporation.
We tried to reach CEO Thomas Arena on his cell phone, but were met with voicemail. If you can provide additional details on this company and its operations, please don't hesitate to contact us.
Note: Comments may take a few minutes to show up on this page. If you go to the forum thread, however, you can see them immediately.
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.