First Magnus employees lose jobs in Green Valley
Mortgage giant to close; customers go elsewhere

The office of First Magnus home loans in the Continental Shopping Plaza is expected to close, possibly today, after its parent firm and national mortgage lender First Magnus Financial Corp. suspended operations and stopped originating new loans Thursday.

The firm’s drastic action came as a shock to many clients and employees, including those in Green Valley, and led to intense speculation about the future of the home mortgage market,, a ripple effect from recent Wall Street woes, and a declining home building market nationwide.

First Magnus Financial Corp., based in Tucson, billed itself as one of the largest privately held banking operations nationwide. It reportedly funded more than $30 billion in loans in 2006, and has operations in all 50 states, employing 5,500.

First Magnus employed about 800 in Southern Arizona.

The Green Valley office employs three who, like all the other employees, have lost their jobs.

Irene Mattingley, branch manager here for First Magnus (formerly Charter Funding) for nine and a half years, said she read about her company’s suspending operations in the newspaper Thursday.

“I didn’t see this coming,” she said. “We were surprised and saddened for all the employees of First Magnus. I don’t know what to do about the closing, I’m waiting for word from the company. We hear that the company is working on alternative, to keep us together.

“We’ll continue to work Friday because there’s been no time to pack with all the visitors and phone calls coming in from clients and others,” she said.

She said Thursday was spent assisting those clients with pending mortgages to find new lenders and telling prospective mortgage applicants that all new loans were suspended.

“We have taken care of all our clients, those with pending mortgages or new applicants by sending them to other lenders,” she said.

For those with existing mortgages, the loan terms will remain the same. and current mortgage holders will be notified by mail about where to make their payments, she said.

While the Green Valley office will close under the First Magnus name, Mattingley indicated “it may reopen at the same location with a new organization.”

Mattingley said she and employees Kim Carson, loan closer and loan officer, and Jeanie Isley, office manager, had already been contacted before 10 a.m. yesterday about prospects for future employment in Green Valley. “The prospects look good that we are going to be able to maintain our reputation and continue in the community in the mortgage lending field,” she said.

Mattingley said the office did not field any irate phone calls or encounter angry visitors.

On the contrary, she said, “we received an outpouring of love, support and concern from our clients and from the real estate community. The phone has been ringing all day with clients expressing concern, clients who want to know how they can help, and clients telling us how much they care. We want to let people know that we believe we have the best real estate community anywhere and that Green Valley is the best place to live,” she said.

Mattingley said she did not see the shutdown coming, ”but the increased growth over the last several years has weakened the mortgage industry overall. In the future, the mortgage industry will be revived and get better and stronger than ever. I do not believe it’s going to be harder to loans. The money is there and the funds are there and the financing will go on.”

The Associated Press quoted First Magnus’ Gary Baraff, the company’s senior vice president for marketing, as saying that the “line of credit available to us became sparse and also we had issues selling loans that we had already funded on the secondary market. So it’s the liquidity issue that you’ve been reading about. Ironically, we do no subprimes.”

He also was quoted as saying that a bankruptcy filing is possible.

Mattingley said the Green Valley office did business “in the double-digit millions” every year, but does not do subprime loans.

“As a whole, a subprime loan does not mean a bad loan, but they were abused. There still will be loans available in the subprime market, but they won’t be abused,” she predicted.

“When people hear about a large company like this going under, they think it will affect them and they are often afraid. But the mortgage industry will continue and we plan on being a part of that. It’s very important for our clients to know that we don’t intend to keep them hanging,” she said.

Kengle@gvnews.com | 547-9732