The September collapse of a mortgage broker created financial distress in homes across Lancaster County, documents released this week reveal.
The documents, filed in Berks County Court, show almost 300 homeowners in 35 Lancaster County municipalities were stung when OPFM Inc. filed for bankruptcy in mid-September. A letter informed the customers they were responsible for mortgages brokered for them by OPFM and, as a result, their monthly payments might increase as much as 50 percent.
The majority of OPFM's Lancaster County customers are in Lancaster city, with 60; Lititz is second, with 38; in Manheim, the total is 22; in Ephrata, 20; in Denver, 18; in Elizabethtown, 18; and in New Holland, 17.
OPFM Inc., which operated as Personal Financial Management Inc. and Image Masters Inc., was headquartered in Berks County and operated a Lancaster office at 1672 Manheim Pike. The company's low-rate mortgage offers helped lure customers in York, Chester, Montgomery, Schuylkill, Lehigh and Carbon counties.
OPFM's collapse also put financial strain on customers from at least six other states, including Maryland, Delaware, Florida, North Carolina, Michigan and New York.
In all, the collapse affected 800 OPFM customers; homeowners in Lancaster County represent 37 percent of the total.
Because OPFM never filed mortgage documents in a county courthouse, it was unknown until this week exactly who its clients were.
The customers are named in a class-action lawsuit filed in Berks County Court against 25 mortgage lenders. Kutztown attorney Joseph O'Keefe filed the suit, which contends OPFM had secretly arranged mortgages with those lenders in the 800 customers' names.
Though all OPFM customers are listed in the suit, to be named as a plaintiff a customer must contact the Kutztown law firm O'Keefe & Sher by Nov. 14.
O'Keefe & Sher, which is suing to invalidate the higher mortgages OPFM customers found themselves facing, successfully petitioned Berks County Judge Jeffrey Sprecher to order a temporary injunction allowing the customers to continue to pay the amount of their original mortgages.
Sprecher will decide at a Dec. 4 hearing whether to make the injunction permanent. Sprecher also ordered 25 OPFM partners, including such heavyweight lenders as Wells Fargo, GMAC, Countrywide and Citicorp, to cease any foreclosure proceedings.
Sprecher ordered the plaintiffs to keep making their original mortgage payments — for the time being — to an escrow account set up at First National Bank of Leesport.
O'Keefe's suit claims OPFM operated as a mortgage "Ponzi corporation" and that the 25 lenders bankrolled the company's alleged $40 million fleecing of the 800 customers.
Meanwhile, bankruptcy Judge Richard E. Fehling has granted an extension until Nov. 2 for OPFM to disclose what assets it has remaining and to identify its creditors.
Fehling Friday set a date for the meeting of creditors, at which OPFM customers will have a "limited right" to question OPFM owner Wesley A. Snyder. Because of the expected large turnout, Fehling scheduled the meeting for The Inn at Reading, Conrad Weiser Ballroom, Nov. 27 at 9 a.m.
In related news, organizers are planning a third informational meeting for OPFM customers at 7 p.m. Tuesday at Highland Presbyterian Church, 1801 Oregon Pike.
E-mail: pburns@lnpnews.com