Trump Mortgage

Trump Mortgage was an American mortgage brokerage and financial-services company headquartered at 40 Wall Street in New York City. It operated under the Trump name and was closely associated with Donald Trump and The Trump Organization, although Trump said that he did not hold an ownership stake and that his involvement was primarily a name-licensing arrangement. The company sought to capitalize on the expansion of residential and commercial real-estate finance during the mid-2000s housing boom. Donald Trump first announced Trump Mortgage Services in July 2003. The proposed business was intended to arrange financing for Trump’s own developments as well as for other commercial and residential real-estate projects. Trump Mortgage LLC was formed in April 2005 and conducted a limited opening in November 2005 from space at Trump’s 40 Wall Street headquarters. The business initially acted as a brokerage rather than a fully funded mortgage lender. In February 2006, it reportedly arranged approximately $25 million in loans, primarily in New York, and it planned to obtain warehouse credit lines so that it could fund loans directly. The company officially launched on April 5, 2006, at Trump Tower in New York. E.J. Ridings, who had developed the idea for the business, became president and chief executive officer. Ridings was introduced to Donald Trump through Trump’s son, Donald Trump Jr. The company promoted itself as a rapidly expanding provider of both commercial and residential mortgage financing. By September 2006, it said that it was licensed in 25 states and described itself as the fastest-growing commercial and residential mortgage company in the United States. Ridings initially discussed an ambition to originate $3 billion in financing during 2006, later lowering that expectation to less than $1 billion, while also making much larger long-term projections. The business experienced substantial internal turnover soon after launch. Six senior executives reportedly departed within its first six months of operation. In August 2006, Lee Bienstock, known from the fifth season of Donald Trump’s television program The Apprentice, joined as associate vice president of corporate development. Later in 2006, reports questioned statements in Ridings’s professional biography, including his description of experience at major Wall Street firms. Former employees also criticized his management and leadership. These disclosures damaged confidence in the young company as the United States mortgage market was beginning to deteriorate. Trump Mortgage’s closure was announced on August 5, 2007. The company cited unfavorable economic conditions, while commentators also pointed to rapid expansion and management problems. The timing was particularly difficult because the subprime mortgage crisis and broader credit-market stress were undermining mortgage origination businesses across the United States. Trump said that the mortgage business was not one he particularly wanted to pursue on a large scale and emphasized that he had not owned Trump Mortgage. At the time of the closure announcement, Trump also agreed to license his name to First Meridian Mortgage, a lender licensed in 12 states. First Meridian temporarily operated under the name Trump Financial in many of its markets, but eventually returned to its original name. Trump Financial later closed, with First Meridian’s president attributing its failure in part to poor timing. Trump Mortgage also became involved in a dispute with former employee Jennifer McGovern over unpaid commissions. McGovern had arranged $26.5 million in financing and alleged that the company retained more than $500,000 in commissions without paying her agreed share. She obtained a judgment of $298,274 in 2009, which was reported as still unsatisfied in 2016. A small federal tax lien was also recorded against the company in 2009. Trump Mortgage is now defunct.

Trump Mortgage originated as a proposed extension of Donald Trump’s real-estate business. In July 2003, Trump announced Trump Mortgage Services as a mortgage-brokerage operation that could arrange financing for Trump developments and other commercial projects. Trump Mortgage LLC was formed in April 2005, followed by a limited opening in November of that year at 40 Wall Street in New York City. The company occupied its own floor within the headquarters associated with The Trump Organization. The business initially operated primarily as a broker. In February 2006, it arranged approximately $25 million in loans, most of them in New York. Management planned to secure warehouse lines that would eventually allow the company to fund loans directly. E.J. Ridings, who had conceived the business, served as president and chief executive officer. He had been introduced to Donald Trump by Donald Trump Jr., and Trump subsequently licensed his name to the enterprise. Trump formally launched Trump Mortgage LLC at Trump Tower on April 5, 2006. The company entered the market during a period of strong real-estate activity and presented itself as a provider of both residential and commercial mortgage financing. Ridings discussed aggressive growth targets, including an initial expectation of $3 billion in financing during 2006 and later projections of much larger annual volumes over a five-to-ten-year horizon. By September 2006, the company said it was licensed in 25 states and claimed to be the fastest-growing commercial and residential mortgage company in the United States. Expansion was accompanied by instability. Six senior executives reportedly left within the first six months. Lee Bienstock, a participant in the fifth season of The Apprentice, joined the company as associate vice president of corporate development in August 2006. In December, media reports questioned statements in Ridings’s résumé. Although he had presented himself as a senior professional connected with prominent investment banks, reports stated that his periods at Morgan Stanley and Dean Witter Reynolds had been very brief. Former manager Jan Scheck also questioned Ridings’s leadership. The controversy undermined the credibility of a company whose strategy depended heavily on rapid growth and the Trump brand. Trump Mortgage’s closure was announced on August 5, 2007. The company cited a poor economic environment, while outside observers also believed that it had expanded too rapidly. The announcement came as the United States mortgage market was entering the early stages of the financial crisis, which sharply reduced available credit and damaged mortgage originators. Trump stated that he did not own the company and described his role as limited to licensing his name, adding that mortgage lending was not a business he particularly wanted to pursue in a major way. On the same day, Trump agreed to license his name to First Meridian Mortgage, a lender licensed in 12 states. First Meridian was temporarily renamed Trump Financial in many operating areas, although it later reverted to its original name. Trump Financial eventually closed, and First Meridian’s president attributed the outcome to unfavorable timing. After the closure, Trump Mortgage faced a commission dispute with former employee Jennifer McGovern. McGovern had brokered $26.5 million in financing and claimed that the company collected more than $500,000 in commissions but failed to pay her the amount owed. She obtained a $298,274 judgment in 2009, which remained unsatisfied according to reporting available in 2016. A U.S. Treasury tax lien for $3,555 was also recorded against Trump Mortgage in 2009. The company has no reported continuing operations.

• 2009

  Commission judgment entered

  [1]Trump Mortgageen.wikipedia.org

  Former employee Jennifer McGovern obtained a judgment of $298,274 in a dispute over unpaid commissions.

• 2007

  Closure announced

  [1]Trump Mortgageen.wikipedia.org

  Trump Mortgage announced that it would close because of economic conditions and business difficulties.

• 2006

  Official launch

  [1]Trump Mortgageen.wikipedia.org

  Trump Mortgage officially launched at Trump Tower on April 5.

• 2006

  Expansion to 25 states

  [1]Trump Mortgageen.wikipedia.org

  The company announced licensing in 25 states and promoted itself as a rapidly growing mortgage provider.

• 2005

  Trump Mortgage LLC formed

  [1]Trump Mortgageen.wikipedia.org

  Trump Mortgage LLC was formed in April and held a limited opening at 40 Wall Street in November.

• 2003

  Trump Mortgage Services announced

  [1]Trump Mortgageen.wikipedia.org

  Donald Trump announced a planned mortgage-brokerage business for financing his own developments and other real-estate projects.

A Trump-branded mortgage brokerage positioned around access to residential and commercial real-estate financing, rapid national expansion, and the perceived credibility of the Trump name.

• Mortgage brokerage · 2005

  Residential mortgage brokerage

  Trump Mortgage arranged residential mortgage financing for home buyers and property owners. The company’s residential offering formed part of its broader brokerage model, which relied on arranging loans through external financing sources rather than operating solely as a balance-sheet lender.

• Commercial mortgage brokerage · 2003

  Commercial real-estate financing

  The company pursued financing for commercial properties, development projects, and other real-estate transactions. Commercial lending was part of the original concept announced in 2003 and was promoted alongside residential mortgage services after the formal 2006 launch.

• 2009

  Unpaid commission dispute

  Former employee Jennifer McGovern sued over commissions associated with a $26.5 million financing transaction. She obtained a $298,274 judgment, which was reported as unsatisfied in 2016.

  Source

• 2009

  Unpaid tax lien

  A U.S. Department of the Treasury lien was recorded against Trump Mortgage for $3,555 in unpaid taxes.

  Source

• 2006

  Executive résumé controversy

  Reports alleged that CEO E.J. Ridings had exaggerated or invented parts of his professional background, including claims concerning his experience at major financial firms. Former employees also questioned his leadership.

  Source

Read more

• 2007

  Close Trump Mortgage and license the name to First MeridianStrategy

  Background

  The company faced a deteriorating mortgage market, management controversy, and concerns about its rapid expansion.

  Action taken

  Trump Mortgage announced its closure, while Trump separately licensed his name to First Meridian Mortgage, which temporarily operated as Trump Financial in several markets.

  Aftermath

  Trump Financial later closed and First Meridian eventually returned to its original name.

  Source

• 2006

  Pursue rapid multistate expansionStrategy

  Background

  Management entered the business during a strong real-estate market and promoted ambitious origination targets.

  Action taken

  Trump Mortgage expanded licensing and announced coverage in 25 states while planning warehouse lines for direct loan funding.

  Aftermath

  The company experienced senior-management departures and was later criticized for expanding too quickly before closing in 2007.

  Source

• 2003

  Enter mortgage brokerageStrategy

  Background

  Trump sought to extend his real-estate activities into financing for his own projects and outside commercial developments.

  Action taken

  The Trump-branded mortgage-services concept was announced as a brokerage business.

  Aftermath

  The concept subsequently became Trump Mortgage LLC, which opened in 2005 and launched nationally in 2006.

  Source

1. 1Trump Mortgageen.wikipedia.org