CM Capital Services surrenders license
CM Capital Services, a hard-money lender that managed $400 million in loans for several thousand investors, surrendered its license to the Mortgage Lending Division on Wednesday, the division said.
Two weeks ago, Nancy Corbin, the Mortgage Lending Division's acting commissioner, filed a notice of plans to revoke the company's license.
Even without a mortgage brokerage license, it appears that CM Capital can continue managing properties for investors who foreclosed on delinquent borrowers. However, CM Capital Chief Executive Todd Parriott and a company spokeswoman didn't return calls for comment on Wednesday.
Angry investors have conducted a campaign of sending the Las Vegas Review-Journal and state officials a barrage of complaints about CM Capital over recent months.
"What's frustrating is that I've been blowing the whistle for a year, and only now are we getting a resolution from the government," said Dean Altschuler, a certified public accountant in Del Mar, Calif., and informal leader of investors at CM Capital.
The action by CM Capital is the latest sign that the hard-money lending business in Southern Nevada is coming to an end, at least temporarily.
Hard-money lenders solicited money from individual investors, many of them retirees, and used the money to make short-term loans to developers. Investors were attracted by double-digit interest rates and the relative security of having real estate as collateral.
Over the last four years, however, the real estate industry crashed. Land and property values have plunged. Homeowners and commercial borrowers are going into foreclosure, and lenders are dealing with large inventories of foreclosed and vacant homes.
Earlier in March, hard-money lender Integrated Financial Associates filed for Chapter 11 bankruptcy protection, reporting $45 million in liabilities and $8 million in assets. Aspen Financial, another hard-money lender, is mired in litigation with some of its former investors.
CM Capital's fortunes began to unravel over the last year. The company tentatively agreed to $215,000 in fines and fees over unspecified regulatory violations, but the settlement remained pending until news broke that Commissioner Joseph Waltuch had been terminated effective Feb. 18. Before Waltuch left office, CM Capital paid the fine and signed the regulatory agreement.
Corbin posted a notice in mid-March that said she was revoking CM Capital's license because the company was insolvent. A division spokesman declined to comment on the possibility of CM Capital being put into receivership.
Altschuler said he believes the Nevada attorney general's office has responsibility for dealing with CM Capital, because the company is no longer licensed by the Mortgage Lending Division.
Parriott separately is chief executive of Desert Capital Real Estate Investment Trust, which pooled investor money to make hard-money loans. In an annual report filed on March 18, Desert Capital cited "substantial doubt about our ability to continue as a going concern."
Contact reporter John G. Edwards at
jedwards@reviewjournal.com or 702-383-0420.
