Non-QM lender Sprout Mortgage, based in East Meadow, N.Y., closed abruptly last week only months after averaging $380 million in loan volume per month, according to a former executive.
In a companywide conference call, Sprout President Shea Pallante broke the news of the company’s immediate closure to its hundreds of employees. The announcement came a day before the company’s pay day. According to employees’ statements on Linkedin, the company failed to issue final paychecks.
“Sprout closed abruptly hours before payroll,” Sprout Mortgage Chief Information Officer Henry Santos wrote on Linkedin. “Teammates were given no coaching or guidance on benefits, unemployment matriculation, employment assistance.”
Sprout was the second lender to shutter in as many weeks following the announcement of First Guaranty Mortgage Corp. filing for bankruptcy weeks ago.
This is only the latest in a series of blows for workforces in the mortgage industry. Mortgage lenders and services have laid off thousands of workers in recent months as interest rates have increased and mortgage applications have declined.