As the mortgage mess widens, Donald Trump has pulled the plug on Trump Mortgage less than two years after its launch.
Plagued by bad timing and the disclosure that the firm’s chief executive, E.J. Ridings, had inflated his credentials, the outfit never came close to reaching its financial goals, according to a report today in Crain’s New York Business.
Instead of doing $3 billion in deals as promised, it barely reached the $1 billion level, the report said.
Trump played down his role in Trump Mortgage, saying it was just a licensing deal and he didn’t have an ownership stake.
Trump is, however, licensing his name to First Meridian Mortgage, a lender that is being renamed Trump Financial.
And here is Trump Financial press release in 2007:
THE TRUMP ORGANIZATION AND FIRST MERIDIAN MORTGAGE ANNOUNCE THE FORMATION OF TRUMP FINANCIAL NEW YORK, NY JUNE 27, 2007 – The Trump Organization is pleased to announce an exclusive strategic alliance with First Meridian Mortgage and the formation of a new entity to operate as Trump Financial. Trump Financial will offer its prospective clients an array of financial products and services while at the same time remaining focused on First Meridian’s expertise in the residential mortgage arena.
Since its founding in 1991, First Meridian has developed an excellent reputation for providing the highest quality service at the most competitive prices as well as introducing innovative loan products for individual borrowers and real estate developers. Over the years, First Meridian has experienced steady growth in its mortgage applications and closings, making it one of the fastest growing mortgage banking companies in the country. Led by its entrepreneurial Founder and CEO, David Brecher, First Meridian has established a foothold in prime real estate areas such as New York, South Florida, Connecticut, California, Washington D.C., Pennsylvania, New Jersey, Virginia and Massachusetts. First Meridian is a licensed mortgage banker in 12 states (NY, NJ, CT, FL, CA, PA, MA, DC, MD, IL, VA, and MN) and has established a strong name in the real estate financing industry for its outstanding service, professionalism and integrity.
Trump Financial will combine the strengths of The Trump Organization with First Meridian’s expertise in the residential mortgage sector to become a leader in the financial services industry. The success of Trump Financial will be achieved by a team of professionals who thoroughly adhere to standards set by Mr. Trump himself. It will offer its clients first-class service accessible to all, careful attention to detail, creative thinking, constant client interaction and feedback, an overall “white glove” business experience, and above all else, impeccable integrity.
“First Meridian is proud to be a part of The Trump Organization family and will strive to capitalize on this unique opportunity and ensure the success of this venture”, Brecher said. For more information about Trump Financial or about this press-release, please call (866) 796-7523 or email email@example.com.
And more fromThe Fiscal Times:
If you were to pick the worst possible time in American history to start a mortgage company, April 2006 would get a lot of consideration. That’s when The Donald held a press conference at Trump Tower for Trump Mortgage, right at the peak of the housing bubble. Just one month later, Ameriquest, one of the largest subprime lenders in the country, closed all its retail offices, an early warning of the collapse to come.
But that April, Trump was characteristically upbeat, vowing that Trump Mortgage would become the nation’s top home lender. He told Maria Bartiromo, “I think it’s a great time to start a mortgage company,” adding, “who knows about financing better than I do?”
Trump hired as chief executive of Trump Mortgage a man named E.J. Ridings, a friend of his son Donald Jr. Ridings boasted on the corporate website of being a “top executive at one of Wall Street’s most prestigious investment banks” with 15 years of financial industry experience. All of that turned out to be false; he was a registered stockbroker with Dean Witter Reynolds for a total of six days, and an entry-level loan originator at a boutique mortgage company for a little over a year. Ridings gamely ignored the embarrassing disclosures, telling Money magazine, “Trump Mortgage is going to be huge.”
Six top executives left Trump Mortgage in the first six months. An initial sales goal of $3 billion in the first year was soon downgraded to under $1 billion. By August 2007,Trump Mortgage closed, one of hundreds of failed lenders in the wake of the housing crash. Unsurprisingly, Trump distanced himself from the implosion, saying he only licensed his name to it, and that “the mortgage business is not a business I particularly liked or wanted to be part of in a very big way.”
Despite that coolness, Trump allowed his name to be licensed by First Meridian Mortgage for a second company, renamed Trump Financial. That too went out of business; the company reverted back to its original name. First Meridian wassubsequently accused of illegally fabricating mortgage assignments to foreclose on properties, and employing robo-signers to execute those faulty assignments.
Trump was not done with the mortgage collapse, however. Twenty years earlier, hehelped save a woman’s farm from foreclosure. But a remarkable Los Angeles Timescolumn in December 2007 shows that Trump saw the latest iteration of foreclosure crisis not as a tragedy, but a business opportunity.