Exhibit 99.1
Mortgage.com
________________________________________________________________________________
NEWS
Contact: Debbie Franklin
Mortgage.com
954-838-5054
For Immediate Release
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MORTGAGE.COM ANNOUNCES PLANS TO
WIND DOWN LENDING OPERATIONS AND SELL ASSETS
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Mortgage.com (Nasdaq: MDCM), a leading provider of electronic commerce
infrastructure for the online mortgage lending industry, announced today that it
will begin the orderly wind down of its lending operations. In addition, it
announced the layoff of approximately 518 of its 618 employees. The company
plans to negotiate the sale of certain assets, including its pipeline of
mortgage loans in process, its URLs including www.mortgage.com, and its
propriety Internet technology and mortgage back office and CLOser software.
The company is in violation of certain covenants of its mortgage loan
warehousing agreement, including covenants regarding liquidity and tangible net
worth. The company believes that it has reached preliminary agreement with its
warehouse lenders that will allow for the continued closing of certain loans in
its pipeline and the orderly sale of loans in its warehouse lines.
The company announced that 3rd quarter results will be released November 14th,
and cancelled the earnings conference call previously scheduled for November
8th.
"We are extremely disappointed that we have not been able to raise sufficient
capital to reach profitability," said Seth Werner, Chairman. "We are hopeful
that we can conduct an orderly wind-down of our mortgage lending operations in
cooperation with our warehouse lenders and mortgage loan investors. Then, we can
focus on the sale or reallocation of certain of our valuable assets such as the
CLOser software system, the Florida call center and the rights to our URL
www.mortgage.com." Management is studying various alternatives for maximizing
the value of the company's assets.
Werner said, "I would like to thank each of our employees for putting forth
tremendous effort toward our goal of redefining the mortgage lending process.
Unfortunately, however, we were unable to capitalize on the platform we have
built, for a variety of reasons. The current interest rate climate has made our
job more difficult. In addition, the downturn in the environment for dot.com
companies has prevented us from raising the additional capital we
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need. In the final analysis, at this point, the online mortgage industry has not
been able to demonstrate its ability to deliver cost-effective mortgage loans to
consumers at a profit."
This press release includes "forward-looking" statements that reflect the
company's current view with respect to future events. The forward-looking
statements in this release are made pursuant to the Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995. You should be aware that
actual events may differ materially from the Company's expressed expectations
because of risks and uncertainties inherent in future events, including such
uncertainties as (1) the results of negotiations with the company's warehouse
lenders, (2) the adequacy of cash flow to cover expenses while the company seeks
to maximize the value of its assets, and (3) other uncertainties that are
described in registration statements, reports and other documents filed by the
Company from time to time with the Securities and Exchange Commission pursuant
to the Securities Act of 1933 and the Securities Exchange Act of 1934.
About Mortgage.com
Mortgage.com was founded in 1994 and is based in Sunrise, Florida. Mortgage.com
is a pioneer in online mortgage banking. Mortgage.com is dedicated to reducing
the cost of mortgage origination and funding by supplying financial
institutions, Realtors(R) and homebuilders with point-of-sale and Internet
technology, business management, loan processing, call center and mortgage
funding capabilities. The Company's business-to-business customer list includes
GE Capital Mortgage Services, TD Waterhouse, Prudential California Realty and
Arvida Home Builders. Mortgage.com is publicly traded on the NASDAQ system under
the symbol MDCM.
