First Magnus Financial Corp - A Tucson Company, Files For BankruptcyAnother nail in the Arizona mortgage coffin. The Arizona Daily Star in Tucson reports:

“First Magnus Financial Corp. still is not sending out paychecks to its former employees. But the Tucson-based mortgage lender announced it is creating an assistance fund of more than $1 million to ease the burden.”

“In a news release, the company said paychecks have been delayed because its accounts were frozen by investors that provided capital to First Magnus to make loans. The company was forced to shut down operations last week because it could no longer sell the loans it originates on the secondary market.”

“Earlier, the company told employees to expect their checks by mail rather than direct deposit. Under both state and federal law, checks were due to employees on Monday.”

“First Magnus, which identified itself as one of the nation’s largest privately-owned mortgage lenders, made loans in all 50 states and employed nearly 6,000 nationwide. Almost all of those workers lost their jobs on Thursday.”

“In a document filed with the bankruptcy court, the company asked for immediate permission to pay its remaining 159 workers, including $8,333 to each of five company officers. First Magnus requested to pay its former employees “when funds become available” through a loan or the sale of assets.”

“The company has not offered immediate assistance to former employees elsewhere in the country. Baraff said the company decided to help only former Southern Arizona employees because their jobs are more specialized, and they are expected to have more difficulty finding jobs.”

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2007-08-22 11:06:04

[...] we posted that First Magnus had announced it would be going into Chapter 11 bankruptcy. While that may seem common nowadays, if you dig a little deeper to find out why they’re [...]

2007-08-24 10:46:47

[...] and real-estate related companies start to go belly up or start to liquidate their workforce. First Magnus/Great Southwest went bankrupt and lost their banking license, lenders are now being sued for the housing bubble blowup, and even [...]

Comment by Noreel
2007-08-24 11:16:33

How could First Magnus go out of business?
I thought they were just a “mortgage franchise firm” kinda like the McDonalds of mortgages.

If anyone worked for them id like to know what exactly went wrong.

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