Mortgage Industry Woes Reach Austin
Austin Business Journal: RARE SPECIAL BREAKING NEWS EMAIL: 4:22 PM Thursday August 16, 2007
Today, it was reported that First Magnus Financial Corp shut it’s doors and left a nice email for it’s employees. How disgusting. They’ve filed for chapter 11- read the full story here
First Magnus says it has discontinued funding mortgage loans as of August 15 and will no longer accept mortgage loan applications.
Employees in First Magnus’ Austin office learned about the shutdown through an email sent out this morning and obtained by the Austin Business Journal. The doors to the local office have been locked and the phones disconnected.
“Despite our efforts to continue normal operations, we have come to a point when we must substantially reduce our workforce,” the email states. “What this means for most of our employees is that Thursday, August 16, 2007 will be your last day of employment. Detailed information regarding payroll, benefits and other human resource related matters will be available as soon as possible.”
Source Austin Business Journal: read full article
Am still the optimist? Of course. Do I think Magnus could have handled this better? Absolutely. Do I think this is just the first round? No doubt about it. It’s obvious Countrywide is having the same issues, there’s a lot of buzz in the air to say there is at the very least some restructuring to do. The question is, how long is the domino trail?
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This article published on Thursday, August 16th, 2007 at 4:14 pm | Contact the editor
Topics: Economy
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“With 5,000 employees across the country, First Magnus had lending operations in all 50 states and reported funding $30 million in loans in 2006.”
Am I missing something or did First Magnus fund $6000 per employee? How did they pay the rent? If they generated 10% profit per loan, each employee would earn $600 for the year. Hardly a way to lease 30,000 sqft in Austin,TX. What am I missing? Unless the ABJ is missing a zero or two in their report.
I’m guessing it’s a typo, it was a rush to press and released in a hurry, I’m hoping for some follow up when the biz world wakes up tomorrow…