The chairman of the now-closed Central States Mortgage Co. acknowledged the economic distress and negative fallout from the collapse of the Milwaukee CUSO, but said also the firm, which filed for bankruptcy last week, produced "years of very good earnings for many small Wisconsin credit unions, a fact that should not be overlooked."
"And during those years we were able to provide our members very affordable mortgages," maintained Dean Wilson, chairman of CSMC and president/CEO of the $37 million Focus CU of Menomonee Falls, Wis.
The problems arose, he said, when the mortgage meltdown hit in 2007 worsening last year but on that score CSMC., owned by 25 Wisconsin/ Illinois CUs and the Wisconsin Credit Union League, was not alone in suffering economic pain "when you consider the likes of Bank of American and AIG," said Wilson, who took over CSMC in December.
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Last Friday, Wilson signed papers setting up a receivership and the firm's liquidation before a Milwaukee County Circuit Court judge who is expected to name a receiver this week. Among CSMC's major creditors are: Members United FCU, of Warrenville, Ill. owed $32.5 million on a defaulted note along with several banks including Amcore Financial of Rockford, Ill. and Associated Banc Corp. of Green Bay.
Under a March 18 agreement with the Wisconsin Department of Financial Institutions and CSMC, the CUSO named AmeriCU Mortgage, a Troy, Mich. CU provider to take over the remaining CSMC operations until a receiver is selected. AmeriCU, said it has already closed 15 loans, set up a temporary shop in CSMC's Wauwatosa, Wis. headquarters and hired 45 former staffers.
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