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Consumer Advice in the Wake of the Collapse of Capitol Commerce Mortgage Company
by Julie Piepho as published in the Northern Colorado Business Journal
October 2003

Julie Piepho of Milestone Leadership Consulting®
draws on industry and personal experience
to offer advice to consumers

Fort Collins, Colo. – The recent bankruptcy announcement of Capitol Commerce Mortgage Company (CCMC), a Sacramento, California-based mortgage broker with offices in Fort Collins, was startling news across the country and locally. The event raises questions and concerns from consumers on how to avoid becoming the victim of a mortgage investor suddenly going out of business. Given the competitive nature of the mortgage business, along with recent historically low rates, some in the industry expect that this type of failure might not be the last seen by the industry in coming weeks and months.

CCMC’s bankruptcy has left hundreds of consumers across the country scrambling to place their purchase or refinance loans with other lenders. Given the increase in mortgage interest rates over the past 30 days, these customers of CCMC’s are left with no option but to obtain loans on short notice that are likely to have substantially higher rates and fees. In some cases, their purchases of property may fall through, and some parties hoping to refinance will now have to keep their previous, higher-rate loans.

Several tips consumers can use to ensure they are protected from such situations include:
1. Do comparative shopping for interest rates and fees. - Generally, most lenders will have very similar interest rates and fees on any given day. If a lender’s rate and fees appear to be too good to be true, exercise caution. The investor may be lowering rates and fees to cover overhead expenses and just break even. No business can sustain this type of financial practice over a long period of time.
2. Know who you are doing business with. - Many mortgage brokers have opened up in the past 6-12 months to take advantage of the refinance market. Many are likely to close as soon as rates rise. Ask for references and seek out business with longevity in the industry.
3. Check with Colorado Mortgage Lenders Association (CMLA) and the Better Business Bureau. - Ask if the loan officers have received training and achieved the Certified Mortgage Lender (CML) designation from CMLA.
4. Check with your local bank or financial institution. - Many have mortgage departments. The likelihood of a financial institution closing down a mortgage department overnight is remote. They are in the local market for customers for the long term.

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