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Employees were ‘all in shock’ as Plano mortgage company suddenly collapsed

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When Euless’s Lori Buckley logged on to work for work at First Guaranty Mortgage Corp. on June 24, she didn’t expect it to be the last.

While demand for mortgages surged from record low interest rates, Buckley joined First Guaranty in the spring of 2021 to work for his former boss and pursue the opportunity to become a senior credit policy analyst. She lived in the Dallas / Fort Worth area, but she was hired as a remote employee, and in fact only senior management worked at the company’s Plano headquarters, she said.

She was among more than 400 employees I lost my job unexpectedly With mortgage lenders and companies on that day in June File for bankruptcy one week later..

On that fateful Friday morning, Buckley received an email at around 10:15 am at 10:30 am that there was a Microsoft Teams call asking for “company updates.” The invitation contained a list of attendees for more than 400 employees. Meanwhile, a friend of the company was planning a meeting at 10:45 am with another group of about 100 employees.

“If you have two meetings and different attendees, it causes a warning signal,” Buckley said.

After the employee logs on to the first phone call, CEO Aaron Samples effectively informs them that they have been fired and receives an email from the Human Resources Department explaining the next steps in their personal email address.

“The phone took less than five minutes,” she said. “He never got on the camera with us.”

After a few minutes, her access to the company’s computer system was terminated.

Shortly before the call, Buckley said he was at another meeting to discuss the expansion of the company’s non-qualified mortgages.

Legacy Place West will be unveiled at Plano’s Tenison Parkway on July 8th. The building houses the Plano headquarters of First Guaranty Mortgage Corp., which dismissed more than 400 employees in June and later filed for Chapter 11 bankruptcy.(Liesbeth Powers / Staff Photographer)

Not the first time

A former employee says he had another layoff at the company earlier this year. North Carolina-based senior loan officer Jay Davis has been with the company since July 2021 and said he had been dismissed from the company in two mass dismissals this year instead of once.

Until April, Davis said he was on a team focused on refinancing loans and felt “swimming a little upstream.” He was trying to get more purchase loans into the pipeline and was reaching out to the realtors he worked with in the past.

“Getting refinancing has become more and more difficult [loans]”Davis said. “I didn’t feel like the company was in trouble, it was like having to find different sources of income from my own revenue.”

According to Davis, he and about 300 other employees lost their jobs in April.

“I think we were all shocked,” he said. “We were digging pretty hard to get a loan and find different ways to do things.”

He said the recruiter who first brought Davis to the company was on vacation when his April retirement took place. However, the hiring manager contacted him about a week later and got a new job with another team focused on purchase loans. He returned to work on June 7, but lost his job again in a mass dismissal later in the month.

The first guarantor, Tom Becker of FTI Consulting, refused to answer questions about previous layoffs and how the company notified employees.

Buckley said he knew of two layoffs, including the team’s underwriters, other than the June layoffs, but didn’t know the exact number.

Buckley and Davies, along with some others who say the lender did not give them the proper 60-day notice required under federal law, and that it is obliged to repay their payments and profits. I am suing the company.

“I want us to be required by law, and we want to ensure that these people are cared for and treated with dignity and respect,” Buckley said. I did.

The Worker Coordination and Retraining Notice Act, passed in 1988, requires companies with at least 100 employees to be notified 60 days in advance of factory closures and mass dismissals. Employers who do not do so are obliged to pay the dismissed employee less than 60 days of payment and allowance.

There are a few exceptions, said Angela Morrison, an associate professor at the University of Texas A & M.

If a stagnant company does not need to announce a layoff, doing so makes it difficult to pursue a sale or raise new funding. The company does not need to notify if the layoff is due to an unexpected business environment. It is unclear if either exception applies to the initial warranty.

The company’s problem was “due to unexpected and historically unfavorable market conditions in the mortgage industry, including unexpected market volatility,” CEO Aaron Sample wrote in a bankruptcy filing. The document also mentions that the company was unable to obtain new funding to address the liquidity crisis.

According to Morrison, the exemption is unlikely to apply to industry-wide turmoil or company decisions. “It should be almost completely unexpected and out of the control of the employer,” she said.

Jack Raisner, who represents a former employee in the WARNAct proceedings, said the proceedings would enable First Guaranty’s response to the former employee’s proceedings that the company has not yet filed.

“These will be very fact-specific issues,” Raysner said.

The company said in a July 20 bankruptcy court filing that the proceedings had no merit and were ready to prove to former employees that there was no warning damages.

Regardless of the outcome of the incident, given the situation in the mortgage industry, a difficult search may come first for people like Buckley and Davis.

“I’m very worried about that,” Buckley said. “That is, there are 400 people looking for the same kind of work I’m looking for.”

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