Consumer First is taken over Four lenders step in

Columbia broker shut its doors in July

August 24, 1996|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Consumer First Mortgage Inc. has been taken over by four lenders who stepped in after the Columbia-based mortgage broker abruptly shut its doors with nearly 650 home loans in the pipeline, Maryland's bank commissioner said yesterday.

The 648 mortgages that Consumer First failed to bring to settlement before its shutdown at the end of July have been distributed among Virginia First Mortgage, a division of Virginia First Savings Bank; Carroll County Bank and Trust Co.; MNC Mortgage Corp.; and Mortgage Edge Corp. of Manassas, Va., said H. Robert Hergenroeder, state commissioner of financial regulation.

"They took over all of Consumer First's residential mortgage commitments," loans valued at $107 million, Hergenroeder said yesterday, as state financial regulators wrapped up a three-week investigation of the company. "This was accomplished without any reported losses to Maryland consumers."

The lender stopped doing business July 31 after Harris Savings Bank, of Harrisburg, Pa., cut off a line of credit that Consumer First had used to make loans it would then re-sell, the commissioner said.

Officials at Harris Savings Bank were unavailable for comment yesterday.

Maryland's role was limited to protecting consumers in the state who had applied for mortgages through Consumer First. State officials ensured that sufficient funds were available to cover consumers' payments to escrow accounts, then monitored the transition as branch offices changed hands.

The lender had seven branches in Maryland and one in Virginia, and employed 120 people when it stopped accepting new loans. At its peak, the company, founded by Mark Feinberg, its president, had employed 256 workers, Hergenroeder said.

The new lenders have taken over Consumer First's branch offices as well as its mortgage business, and in most cases offered employees the option of staying.

Virginia First has taken over branch offices in Columbia, Bel Air, Timonium, Frederick and Bladensburg. Carroll County Bank and Trust Co., of Westminster, took over Consumer First's Millersville office, and MNC Mortgage Corp. acquired a branch in Ocean City. Mortgage Edge Corp. took over the Consumer First branch in Annandale, Va.

Pub Date: 8/24/96

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