CENTRAL STATES MORTGAGE BUST?

Special to the Readers of Milwaukeeworld.com

By Michael Horne

And The Milwaukee World Hound Dog Team


It appears the operators of Central States Mortgage Corporation are not operating their business as usual today. Bill Scott, the marketing director of the Credit Union Servicing Organization [CUSO] did not respond directly when asked by the Milwaukee World Hound Dog Team whether the firm had shut its doors and declared bankruptcy this morning.
Instead, Mr. Scott directed all calls to CSMC, Inc. CEO and Registered Agent Craig Lester. A message had already been left for Mr. Lester.
It is perhaps not without significance that Mr. Scott was not able to immediately answer our query. In our experience, this is not an auspicious sign.
However, a call to the United States Bankruptcy Court for the Eastern District of Wisconsin shows numerous files of CSMC involvement in bankruptcies, but no filing (yet?) by the firm in its own bankruptcy proceeding.
Central States is owned by a group of credit unions and their members, and was formed in 1984 to help pool assets and to provide financial services to credit union members.
The firm apparently has a debt coming due on March 29th, 2009, with Wells Fargo Financial Leasing, Inc. listed as the Secured Party of Record. It appears Associated Bank has a piece of them too. Also, a debt of some sort was "terminated" on February 17th, 2009, with Ridgestone Bank being the secured party. Corporate Central Credit Union of Muskego is also a secured party. Corporate Central is "a credit union serving credit unions." (Similarly, Central States is a mortgage company serving credit unions). Corporate Central has been placed on a watch by Moody's for a possible ratings downgrade. Certainly the possible failure of Central States would not be a good thing for any lender, secured or not.

Central States also owns Lakeside Title Closing and Premier Title and Closing. It is believed those units remain active.
More later after the Hound Dog Team sniffs around a bit.
[Update! The Milwaukee Journal Sentinel has followed our trail and also announces the suspension of operations at CSMC.--Ed.]