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Consumer Advice in the Wake of the Collapse of Capitol Commerce
Mortgage Company
by Julie Piepho as published in the
Northern Colorado Business Journal
October 2003
Julie Piepho of
Milestone Leadership Consulting®
draws on industry and personal experience
to offer advice to consumers
Fort Collins, Colo. – The recent bankruptcy
announcement of Capitol Commerce Mortgage Company (CCMC), a Sacramento,
California-based mortgage broker with offices in Fort Collins, was
startling news across the country and locally. The event raises
questions and concerns from consumers on how to avoid becoming the
victim of a mortgage investor suddenly going out of business. Given
the competitive nature of the mortgage business, along with recent
historically low rates, some in the industry expect that this type
of failure might not be the last seen by the industry in coming
weeks and months.
CCMC’s bankruptcy has left hundreds of consumers across the
country scrambling to place their purchase or refinance loans with
other lenders. Given the increase in mortgage interest rates over
the past 30 days, these customers of CCMC’s are left with
no option but to obtain loans on short notice that are likely to
have substantially higher rates and fees. In some cases, their purchases
of property may fall through, and some parties hoping to refinance
will now have to keep their previous, higher-rate loans.
Several tips consumers can use to ensure they are protected from
such situations include:
1. Do comparative shopping for interest rates and fees. - Generally,
most lenders will have very similar interest rates and fees on any
given day. If a lender’s rate and fees appear to be too good
to be true, exercise caution. The investor may be lowering rates
and fees to cover overhead expenses and just break even. No business
can sustain this type of financial practice over a long period of
time.
2. Know who you are doing business with. - Many mortgage brokers
have opened up in the past 6-12 months to take advantage of the
refinance market. Many are likely to close as soon as rates rise.
Ask for references and seek out business with longevity in the industry.
3. Check with Colorado Mortgage Lenders Association (CMLA) and the
Better Business Bureau. - Ask if the loan officers have received
training and achieved the Certified Mortgage Lender (CML) designation
from CMLA.
4. Check with your local bank or financial institution. - Many have
mortgage departments. The likelihood of a financial institution
closing down a mortgage department overnight is remote. They are
in the local market for customers for the long term.
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