The subprime mortgage broker most known for a faith-focused business model has moved on to the afterlife of solvency. Atlanta-based HomeBanc Corp filed for bankruptcy protection last Thursday. The company celebrated by staging a mock-up of the book of Exodus, expelling 1,100 of its flock to wander around the desert of the real-estate market searching for employment. The only decree "Thou shall not covet thy neighbor's adjusting rate. Really, because he's not going to budget for the step-up properly and the bank's going to take away his Winnebago."
As part of a new company strategy, HomeBanc is exiting the mortgage-loan origination business and not processing the current loans in its pipeline. It is a wonder that HomeBanc failed, as divine intervention couldn't lower the default rates of loans issued by a crack team of loan officers hired without any prior experience. The Wall Street Journal reports that "most of HomeBanc's 450 loan officers had no prior experience in the business." Instead, the company trolled the ranks of local churches, families, friends, and former college athletes to fill its staff with people who would give you a loan if you had a Jesus fish on your Taurus.
"Pretty much anyone who walked in wearing a "Footsteps" T-shirt was given a job, or a loan, or both," one insider commented.
Not everyone believed that such extensive preparation for a life not on earth distracted HomeBanc employees from more immediate concerns, from the Wall Street Journal:
"I don't [HomeBanc peeps] saw God as a magic genie that was going to insulate them from the marketplace," said the Rev. Victor D. Pentz, the senior pastor of Peachtree Presbyterian Church, an 8,500 member congregation whose leadership includes several HomeBanc executives. Instead, he said HomeBanc was "a place where the deeper expressions of their values are welcomed as a part of the mix. People want to relate at a deeper level than 'I stand next to you at the copy machine.' "
God isn't a magic market-insulating genie, but he does protect you from awkwardness at the water cooler.
At least the people who got laid off got a $20 gift card (we're not kidding), opposed to the $5 million in severance former CEO Patrick Flood got in January. Sixty people (i.e. - the lucky ones) were laid off from HomeBanc last fall, and received some severance and benefits in a company initiative called "Project Dignity" (also not making that up).
Mortgage Woes Take Toll on Lender With Roots in Faith [Wall Street Journal]
Posted by , Aug 13, 2007 11:38AM
excellent picture
Posted by Lucifer Capital Mgmt, LLC , Aug 13, 2007 11:42AM
Please allow me to introduce myself
I'm a man of wealth and fame
Been around since LTCM
Went down in curse and flame
I worked for a bank
Hired some Nobel's rank
While the quants did scream and the CDOs stank..
I shouted out, "Who killed the 3% fee??"
When, after all, it was you and me...
Pleased to meet you, hope you guess my name...
Posted by chris , Aug 13, 2007 11:54AM
When the rapture comes, the CMO default rate will spike due to a large number of borrower being taken up (revelations 7:22). Build that into your models.
Posted by Lee D , Aug 13, 2007 12:02PM
Ah, faith. An amazing number of financial scams, from MLM's to Ponzi schemes (HYIP's, anybody?) proliferate through church groups like pinkeye at a daycare.
I'm not saying everyone who goes to church needs Richard Dawkins and electroshock therapy, but the gullibility quotient certainly acts like a magnet for people who need a steady supply of suckers.
Posted by Ghost of Mark Twain , Aug 13, 2007 12:19PM
Lee and Chris wrote some fine, fine commentary. I'm so jealous of both that it gave me the fantods. ("Pinkeye" at a daycare! Brilliant...)
(Use that newfangled Google to look up the word "fantods". I had to use a dictionary.)
Posted by Blunt Smoke , Aug 13, 2007 12:19PM
haha wow keith that was actually amusing, finally.
Posted by Ajax , Aug 13, 2007 12:51PM
the biggest shame was that new employees had to stay at the co. for three years or reimburse the company $60k for "training" expenses.
This just shows it's a mistake to mix faith and business. It ends up giving both a bad name.
Posted by anon , Aug 13, 2007 12:59PM
mixing faith with anything generally does not work out very well, as history shows us, our list of poor combinations of religion/faith and:
politics
public policy
business
war
relationships (between priests and er, nevermind thats just a low blow)
science
medecine
rational thought
(personal) finance
etc, etc
feel free to add/expand
Posted by , Aug 13, 2007 1:03PM
Ajax, in the end business is about trust and friendship. Since we live in a world where most people are religious lunatics, it makes good business sense to humor the religious sentiments of these people. In some parts of the world, where fanatics are particularly concentrated, there is often no other way of conducting business. Having said that, you most certainly want to make sure that these loons are not on both sides of the teller counter.
Posted by Beelzebub , Aug 13, 2007 1:10PM
Don't foget, faith/religion is responsible for communism, fascism, Nazism, the holocaust, great leap forward, cultural revolution, khmer rouge, WWII, rwanda and new Coke. wait a minute, maybe not...
Posted by , Aug 13, 2007 1:11PM
No I think you were right the first time, Beelzebub.
Posted by , Aug 13, 2007 1:13PM
http://towelianism.files.wordpress.com/2007/08/sciencevsfaith.png
Posted by Beelzebub , Aug 13, 2007 1:23PM
Communism is rationality taken to its logical extreme: in order to end the exploitation of the proletariat, revolution is necessary; given that the capitalists and reactionaries will stop at nothing to preserve their dominance over the working class, they must be eliminated.
Fascism and Nazism are also extensions of rationalism. When Nietzsche proclaimed the death of God and the ascension of Man, Man was freed to relentlessly pursue self-satisfaction, which fascists and Nazis translated to pursuit of the Nation and the subjugation/elimination of enemies of the Nation.
Posted by geico caveman , Aug 13, 2007 1:30PM
er - what?
Posted by anon , Aug 13, 2007 1:42PM
After readin beelzebub 1:23 and the geico response I laughed so hard that at least 3 people looked up to see what the ruckuss was. Very apt response caveman, very apt indeed.
Posted by ahhh... the memories , Aug 13, 2007 2:04PM
Epic title/picture reference, Hahn
Posted by , Aug 13, 2007 3:06PM
You want it all, but you can't have it.
Posted by Lee D , Aug 14, 2007 10:40AM
You just have to admire the keening gall of someone who can put on a straight face and compare his moneylending troubles to christ's suffering.
http://businessopinions.blogspot.com/2007/08/faith-based-mortgage-lender-denied.html
Posted by God , Aug 14, 2007 6:30PM
Interesting talk.
I am in everything. I know what happened and what will happen. As you sit and judge and tear down my church, I am working and bringing prideful people from HomeBanc to further understand that I am in charge and they are not. When I visit you (which may be very soon-wink), you might also remember that you too need Jesus. I never said “believe in me and your company will grow.” I did say “believe in me and you will have life everlasting.” So why do you expect me to lift up a company? What would that bring? It appears in your minds that even if this company was a great success you still would not have listened to my word. And although some of you might have, your motivation would not have been your soul, but rather, money.
Posted by God , Aug 14, 2007 6:30PM
Interesting talk.
I am in everything. I know what happened and what will happen. As you sit and judge and tear down my church, I am working and bringing prideful people from HomeBanc to further understand that I am in charge and they are not. When I visit you (which may be very soon-wink), you might also remember that you too need Jesus. I never said “believe in me and your company will grow.” I did say “believe in me and you will have life everlasting.” So why do you expect me to lift up a company? What would that bring? It appears in your minds that even if this company was a great success you still would not have listened to my word. And although some of you might have, your motivation would not have been your soul, but rather, money.
Posted by God , Aug 14, 2007 6:32PM
Interesting talk.
I am in everything. I know what happened and what will happen. As you sit and judge and tear down my church, I am working and bringing prideful people from HomeBanc to further understand that I am in charge and they are not. When I visit you (which may be very soon-wink), you might also remember that you too need Jesus. I never said “believe in me and your company will grow.” I did say “believe in me and you will have life everlasting.” So why do you expect me to lift up a company? What would that bring? It appears in your minds that even if this company was a great success you still would not have listened to my word. And although some of you might have, your motivation would not have been your soul, but rather, money.
Posted by mg , Aug 15, 2007 6:08PM
Amen!!!!