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]