William Taylor, the CEO of Huntsville, Alabama-based Hometown Lenders, published a video on the company's intranet in late May thanking some of the company's branch managers for paying rent on behalf of the company.
"I'm overwhelmed every time I hear stories about branches paying their own rent one month because they want to ensure that the Hometown name is protected," said Taylor to his employees in a video reviewed by National Mortgage News. "So that when we come out of this, we launch forward."
The company-wide address came after months of what employees describe as managerial chaos during which they say bills have gone unpaid, paychecks have been sent out irregularly and some vendors have started pulling the plug on providing services, such as credit checks.
The mortgage shop, founded in 2000 by Taylor, has close to 400 employees and operates in over 45 states, per the Nationwide Multistate Licensing System. The lender is a P&L (profit and loss) branch model company.
According to over half a dozen former and current Hometown employees, the lender has been struggling financially since the
Unpaid bills, ranging from leases to invoices from appraisal management companies and vendor service providers have piled up since mid-2022, causing branch managers to step up and pay for some bills out of pocket without getting reimbursed, they said.
"Close to six branches have told me they received three-day vacate notices [or] had their doors locked because the company didn't pay the lease," said a current manager at Hometown, who requested anonymity. "[We have about] 50 branches and most of them, because of licensing, have to have some type of space. I would be willing to guess that probably about 75% have not had their lease paid on time."
Other employee grievances with the company include: the company being inconsistent with paying wages on time, health insurance not being funded, branch managers not getting compensated for business expenses, missing money in deferred compensation accounts and 2021 401k accounts not receiving a match. These types of issues are pushing top-performing branches to reconsider their future at the company.
An attorney for Hometown said any delays in payment "are a product of the same market conditions being experienced by most other independent mortgage bankers" and noted those publicly expressing disappointment are a "thin 'top layer' of unhappy employees."
"We are mindful of our regulatory obligations to pay branch expenses including rent and utilities," said Joe Wilson, chief legal officer at Hometown, in a written statement. "To the extent any employee made payment for rent or another expense, they did so outside of our internal policies and will be or have been fully reimbursed."
"While we cannot comment on our employees' (current and former) private information, we take our responsibility to fulfill our obligations regarding benefits seriously, and are taking all needed steps to ensure those obligations are met," he added.
At least three former branch managers interviewed say they footed the bill to keep offices open and paid for internet, cleaning services and utilities with their own credit cards or via check. As of early June, they have not received compensation, they claim. One branch manager on the West Coast claims that he has over $100,000 of outstanding expenses that the company has yet to cover.
Employees criticize Hometown for sponsoring flashy events, such as the
"They advertise at all of these events like the Bahama Bowl and no one needed that," a former operations manager at Hometown said. "And when you can't pay your bills, you probably shouldn't be sponsoring $500,000 golf events or $500,000 ESPN football games."
Current and former employees with knowledge of what's going on internally claim that the company's CEO is hopeful that business will soon turn around, but many branch managers may not stick around long enough to witness that. In recent weeks, a handful of top performing branches made the decision to take their teams and go elsewhere and more are planning to do so in the months to come.
A former executive at Hometown said the company is a victim of a
"They're not bad guys," he noted. "They're just making bad decisions. The company used to be transparent and it's not anymore. I don't know what happened."
