Yegen Equity closes Towson, Greenbelt offices state moves to protect customers

February 05, 1992|By Ross Hetrick

Yegen Equity Loan Corp., a finance company based in Paramus, N.J., has closed its offices in Towson and Greenbelt without explanation, prompting the state's commissioner of consumer credit to try to protect people who had applied for loans.

The offices, which were shut last week, had provided second mortgages to homeowners, according to Alan Fell, the state's commissioner of consumer credit. Mr. Fell learned of the closings when a customer called his office Monday.

Joan Lundgren, a senior vice president in the company's Paramus office, would not explain the office closings, saying only that it was "basically a business decision." She also would not say how many customers were affected or whether offices in other states were being closed.

She said the company is working with Mr. Fell's office to have pending and existing loans placed with other lenders. "We don't want the consumers hurt either," Ms. Lundgren said.

The company apparently is not conducting business in New Jersey, according to regulators there. Yegen let its second-mortgage lending license in New Jersey lapse at the start of the year and surrendered its mortgage banking license Jan. 21, said Chris W. Cooney, a spokesman for New Jersey's Department of Banking.

According to a report by Dun & Bradstreet, Yegen had revenues of $8.6 million in 1990 and 113 employees, including 10 in Paramus.

The company originated about $1.3 billion in consumer loans in 1988, according to an article April 10, 1989, in the San Diego Business Journal

Despite the sudden closing, Mr. Fell was confident that other lenders would assume outstanding loans and those that have been approved but not issued. "We have some lenders that are anxious to take them," he said.

If a pending loan cannot be placed with another lender, claims will be filed with Yegen's bonding company for the refund of charges, such as appraisal fees, Mr. Fell said.

Besides contacting Yegen and trying to find other lenders, Mr. Fell's office notified Yegen's bonding company, Lumberman's Mutual Casualty Co., that claims might be filed against the bond. State law has required finance companies to have such bonding since Jan. 1, 1990.

According to information filed with the commissioner of consumer credit, Yegen's Towson office made 506 loans totaling $18 million during the first nine months of 1991. In 1990, the office lent $26 million to 791 people.

The Greenbelt office made loans totaling $10 million to 229 people during the first 10 months of 1991. In 1990, it made 347 loans totaling $13 million.

Yegen's closing also caught the company's Towson landlord by surprise. "They more or less disappeared, abandoned the property," said Jerry Wit, a spokesman for Minebank Partnership, the owner of the Cromwell Center on Gleneagles Court.

The finance company, which had been at the office complex for 3 1/2 years, gave no notice it was leaving, he said. Yegen owed back rent, but Mr. Wit declined to say how much.

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