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Special Reports
Mortgage Fraud
Fraud Alleged as QuoteMeARate.com Closes
By Paul Muolo
QuoteMeARate.com, a Houston-based net branch operator, has closed its doors amid
allegations of loan fraud, Origination News
has learned.
Net branch operators who worked for the company at press time had set up a website
to catalogue their complaints, claiming to be owed thousands of dollars each.
Close to 600 loan officers were believed to be registered with the company, which
also had a correspondent division.
At press time, company president Richard Barroso could not be reached for comment.
In a letter sent to employees and net branch operators on March 28, he blamed
QMAR's problems on declining loan volumes and the cost of defending the company in a lawsuit.
In the letter he noted that QMAR was "stuck" with 40 loans that investors
would not buy, adding that the firm "had to get rid of" the mortgages at a significantly reduced price.
"The cost of this is tremendous."
Mr. Barroso writes that an investor audit early in the year turned up "significant
levels of fraud" on the loans. (No dollar volumes are mentioned.)
Jodi Wagley, vice president of compliance for QMAR, did not return telephone calls
but sent an e-mail to ON's sister
publication National Mortgage News
saying, "We are not interested in a news story."
A letter sent to QMAR employees by Chris Miller, vice president of branch operations,
says the company actually has 55 loans that investors will not buy.
In that letter he notes that in 2005 QMAR was processing 1,100 loans per month,
generating $350,000 in monthly revenue. But by March 2006 its volume had fallen to less than 600 loans per month
and revenue of less than $200,000.
Net branch firms act as franchise operators, allowing loan brokers and loan officers
to use their license and marketing muscle (for a fee and setup costs) to originate home mortgages.
John Severino, a mortgage broker from California, told ON that he paid $599 to
"get trained over the phone" by QMAR "and then two days later they went belly up."
Mr. Severino said he is a licensed broker in California but was hoping to use
QMAR to originate loans in other states. "I was going to use their licenses," he said.
He is uncertain whether he will get his money back from the company. Former QMAR
net branch officers are contemplating a lawsuit against the company.
Meanwhile, QMAR's website has been shut down. On the website set up to generate
complaints, the company's competitors - including Appex Mortgage and World Savings - are now openly recruiting
LOs who did business with QMAR.
One poster who identifies himself as "Mad as Heck 2" says he is owed
$6,000, noting "premeditated fraud sounds about right."
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