The Majestic Home Loan Legacy Issue That Caused It’s Collapse Was Due To Late Owner’s Inexperienced Son
When Majestic Home Loan has abruptly closed last month the company was pretty tight lipped about the cause. All the company said was it was a legacy issue. What was the mysterious and unspoken Majestic Home Loan legacy issue that caused it’s implosion?
Well, we now know what the “legacy issue” was. A former member of senior management at Majestic Home Loan filled us in. Apparently, it goes deeper than rising interest rates and the shrinking real estate market.
Majestic’s legacy issues started when the owner died of a stroke last year. After his death, the reins of the company landed in the hands of his inexperienced 30-year old son. Unfortunately for the company and it’s employees, the son did not have much mortgage experience. To make matters worse, what little he had, he learned working at Majestic.
He also never worked for any other mortgage company. This meant he made a lot of errors in judgment including listening to seasoned professionals.
In addition, he adamantly refused to hire a competent CEO to run the business when it became clear he didn’t know he was in over his head.
As a result, seasoned veterans began seeing the handwriting on the wall. As a result, they began leaving Majestic due to lack of confidence in his leadership.
Former employees say the new CEO didn’t know how to deal with the rise in interest rates. As a result, he made more bad decisions.
In addition, the CFPB had slapped the company with a huge fine. At the same time, Majestic was fighting a lawsuit regarding VA IRRRL loans and charging veterans for fees that are unallowable.