Single Page | 
Multiple Pages
Home > BizTimes Daily > Archives > March 27, 2009
Central States Mortgage files for receivership
Published March 27, 2009 - BizTimes Daily
Previous | 10 of 10
Central States Mortgage Company today made a voluntary assignment for the benefit of creditors, which was immediately filed in Milwaukee County Circuit Court commencing a Chapter 128 receivership.
The company, headquartered in Wauwatosa, serves about 250 credit unions. In early March, Central States Mortgage Company had ceased making mortgage loans.
"Central States is taking this action in an effort to protect its customers, creditors and former employees by providing an orderly transition of our business," said Dean Wilson, chairman of the Central States board of directors. "A voluntary Chapter 128 receivership is a Wisconsin state court proceeding for the orderly liquidation of a company and its assets under the supervision of a receiver. The proceeding helps ensure that everyone involved is protected and treated as fairly as possible in the process."
Wilson indicated Central States Mortgage Company has worked in recent weeks to ensure any pending mortgage applications have been processed and completed. The company is working with AmeriCU Mortgage Company of Detroit. AmeriCU has
helped close and fund a total of 66 mortgage loans for Wisconsin customers with a value exceeding $10.5 million.
"We have been trying hard to take care of the people who came to us for mortgage loans prior to Central States closing down its mortgage origination business," Wilson said. "We are committed to helping as best as we can to resolve any outstanding issues. We have also been helped tremendously by a cooperative attitude from the Wisconsin Department of Financial Institutions and our four largest creditors, all of whom have supported our move into voluntary receivership."
The receivership proceeding is currently pending in Milwaukee County Circuit Court.
CSMC Inc., the Wauwatosa-based parent company of Central States Mortgage, filed a lawsuit in February against its founding shareholders, with allegations of racketeering and wire fraud activities that cost the company more than $15 million in losses.
In a civil case filed in Milwaukee Circuit Court, CSMC alleged that former chief executive officer Richard Jungen, his wife Elaine Jungen, who also served as president and secretary, former chief financial officer Jerome Poehnelt, former senior vice president of sales Kevin Dwyer, and former vice president for production Charles Miller, intentionally created and took part in a fraudulent scheme.
The complaint alleges that the Jungens, Poehnelt, Dwyer and Miller founded Interim Funding LLC in 1997. Interim is an end purchaser of mortgage loans that were originated by CSMC. According to the suit, the defendants, through their controlling interests in both organizations, caused CSMC to purchase delinquent or foreclosed mortgages. Many of the distressed or foreclosed mortgages were then repurchased by CSMC because of a funding scheme created by the defendants, the case states.
Richard Jungen was fired from CSMC last July 31, while Elaine Jungen, Dwyer and Miller were fired on Nov. 7. Poehnelt was fired on Sept. 15.
