A “victim of the rapid and utter deterioration in the market.”

From the Wall Street Journal:

Mortgage Woes Take Toll on Lender With Roots in Faith
HomeBanc Built Network With Church Connections; Firings After Chapter 11
By VALERIE BAUERLEIN
August 13, 2007; Page A1

While many mortgage brokers screamed through the real-estate boom with blaring television ads and exotic loan structures, HomeBanc Corp. positioned itself as the good guy.

Inside the company, executives opened companywide gatherings and internal meetings with Christian prayers. Every branch office kept a chaplain on call. The company’s $365,000-a-year human-resources chief, Dwight “Ike” Reighard, was the founder of a mega-church in an Atlanta suburb. He says he encouraged employees to pray, put others first and become better workers — and also performed weddings and funerals for employees. “People who never attended church would tell me, you’re my pastor,” Dr. Reighard said in an interview on Saturday.

But over the past few weeks, as investors fled securities tied to mortgages, HomeBanc’s sources of loan funds dried up. Unable to continue originating loans, the company staggered under the burden of its expensive sales infrastructure.

On Thursday, HomeBanc filed for bankruptcy-court protection. It fired most of its 1,100 employees on Friday and is shuttering its 22 branches and 139 kiosks in real-estate and builders’ offices, exiting the mortgage-loan origination business and processing no new loans, including ones in its pipeline. Countrywide Financial Corp., of Calabasas, Calif. — struggling with troubles of its own — said it was buying at least five HomeBanc branches.

HomeBanc wasn’t unique in its faith-focused business model. As the credit business boomed over the past decade and finance companies scrambled to differentiate themselves, church and religiously oriented lending became a hot niche, particularly in the Southeast. Big banks such as Wachovia Corp. of Charlotte, N.C., and Atlanta-based SunTrust Banks Inc. have operations devoted to serving faith-based organizations. Several Georgia community banks have faith-based philosophies, including Integrity Bank, a five-office community bank in Alpharetta, Ga., with the motto “In God We Trust.”

Most of HomeBanc’s 450 loan officers had no prior experience in the business. Many were local church leaders or family members and friends referred by HomeBanc staff. Former employees say HomeBanc also sought out former college and professional athletes and military veterans, who brought with them extensive networks of personal contacts and enjoyed the company’s high-volume sales strategy. HomeBanc required all potential loan officers to list 150 contacts as proof of an existing network.

New loan officers went through an intense, nine-week “boot camp” to learn sales skills and become indoctrinated in the company culture. Participants said suits were required everyday; classes began at 7 a.m., when the doors were locked; and trainees said they were told that if they arrived late, they would have to pack their bags and go home. HomeBanc human-resources executives said no one was kicked out but the company frowned on tardiness. New hires agreed to reimburse HomeBanc up to $60,000 for the cost of the course if they didn’t stay at the company past a certain period — typically three years.

“I don’t think they saw God as a magic genie that was going to insulate them from the marketplace,” said the Rev. Victor D. Pentz, the senior pastor of Peachtree Presbyterian Church, an 8,500 member congregation whose leadership includes several HomeBanc executives. Instead, he said HomeBanc was “a place where the deeper expressions of their values are welcomed as a part of the mix. People want to relate at a deeper level than ‘I stand next to you at the copy machine.’ ”

Barbara Aiken, a human-relations executive who’d been with HomeBanc for 14 years, says, “Everybody said we were a cult, they said, ‘You drink the Kool-Aid.’ But I really believe the uprightness with which the company held itself really bothered people.”