There’s been a lot of media coverage in the last few months on Trump’s failed business ventures, including Trump Airlines, Trump University and GoTrump.com. But fewer people are aware of the short-lived Trump Mortgage, an endeavor that got off the ground in 2006 and cratered less than two years later, after the housing market crash. So, what exactly was Trump Mortgage?
In 2006, Trump opened a mortgage brokerage that operated out of Trump Tower in Manhattan, during the housing bubble right before it burst. The company had a goal of generating $3 billion worth of mortgages, but ended up hitting only $1 billion before going out of business.
With more attention focused on Trump business ventures recently, publications like The Washington Post, CNN Money and Time have taken a closer look at what happened to the NY mortgage company, especially in light of comments Trump himself has made on the campaign trail.
Trump has said that he predicted the crash, saying in 2015 that he knew the housing market “was a bubble that was waiting to explode.” He’s also said the downfall of Trump Mortgage was the result of poor management, and he had very little to do with it.
However, The Washington Post points out that during the launch of Trump Mortgage at a glitzy press event in 2006, Trump seemed exuberant about entering the mortgage business. He introduced CEO EJ Ridings (a supposed Wall Street expert with years of experience), joking that if the company wasn’t a big success, “you’re fired.” It turned out Ridings had been introduced to Trump by his son, Donald Trump Jr. Ridings had grossly overinflated his qualifications, having only spent 3 months at a Wall Street firm and a few years as a mortgage broker before that.
CNN Money points out that before Trump Mortgage launched in 2006, he gave an interview to CNBC about the new venture. When asked what he thought about the future of housing, given concerns of a bubble, he said it was a great time to start a mortgage business. He also wrote a blog titled “The Housing Bubble: Doom and Gloom Don’t Pay” for Trump University students. He wrote, “You need to take risks in business. Are you the type of person who takes advantage of positive situations when they present themselves, riding them out as long as they last? Or do you heed every message of doom and gloom, avoiding risks that could be some remarkable opportunities?”
In 2007, NY business magazine Crain’s published a piece about the rise and fall of the company. They reported that Trump “downplayed his role in the failure.” Trump said he simply licensed his name to the mortgage company, and had no ownership stake.
Trump Mortgage didn’t end there. Brooklyn-based company Meridian Financial took on the Trump moniker, becoming Trump Financial. Its CEO David Brecher said, “I could not think of another branding name that has as much clout.” Trump Financial quietly exited the market two years later.
Was Trump’s decision to start a mortgage business in 2006 just bad timing, or a terrible business decision all-around? What do you think? Let us know in the comments!
As we get further into the year licensing deadlines are approaching and processing delays will be inevitable. This will vary from state-to-state, but most are suggesting to allow up to 60 days to review each application, after EVERYTHING is completed and submitted to NMLS and the state regulatory agency. Currently, some states are taking over 40 days to complete the process. As time goes by and everyone waits to the last minute, longer delays are expected (this does not include any delay time that could arise for testing center locations).
If licensees are not COMPLETELY approved by their state’s licensing deadline, they will not be able to act as a mortgage loan originator until the approval is completed.
Below are current stats, from the State of Colorado, regarding the license application process. Your state may have very similar statistics.
CO states, as of the week of May 31, 2010:
- 2.500 individuals have registered & received their NMLS ID number
- 2,000 have completed Federal fingerprinting
- 1,950 have taken NMLS testing
- 900 have passed the testing
- Only 140 have been completely approved by the State of Colorado
* Statistics provided by the Colorado Department of Regulatory Agencies and NMLS
MTI is an NMLS-approved education provider and currently offering the required 20 hours of pre-licensing education, many state specific regulatory courses and test preparation packages.
Visit us today for courses and schedules: www.MortgageKnowledge.com
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