Cameron Fi nancial Group

Mortgage lender files for Chapter 7

San Luis Obispo-based company with $28 million in debts had offered loans to people with ‘bruised credit’

By Antonio A. Prado

Clarification (ran April 8, 2008):A B1 story Friday about Cameron Financial Group’s bankruptcy reported that the now-closed wholesale mortgage lender owes Morgan Stanley, Bear Stearns, Countrywide Financial and Deutsche Bank $400,000, $2.1 million, $2.7 million and $8.2 million, respectively, according to court records. Cameron Financial CEO Cary Fierro noted that those amounts listed in court filings represent only the potential value of disputed, and still undetermined, claims against his firm. He said Cameron Financial does not owe those four financial giants any money.

Saddled with $28 million in debts, San Luis Obispo-based wholesale mortgage lender Cameron Financial Group has filed for Chapter 7 bankruptcy protection.

Doing business under the name 1st Choice Mortgage, the company declared less than $984,000 of assets, according to records filed at U. S. Bankruptcy Court in Santa Barbara.

Unlike a Chapter 11 reorganization—common among businesses seeking some breathing room with their creditors—Chapter 7 bankruptcies almost always end up with the closure of a company and most debts discharged.

It’s not clear whether the national subprime lending and credit crisis and the real estate market downturn contributed to the firm’s collapse.

The firm’s Web site indicated that it made various loans. Those included conforming loans, jumbo loans — borrowing above $240,000 — and construction and debt consolidation loans.

But Cameron Financial also offered riskier lending, such as home loans without down payments and financing for borrowers with “bruised credit” affected by bankruptcy, foreclosure or tax liens, according to its Web site.

The firm also has more than a dozen lawsuits pending, most of which listed Cameron Financial as the defendant, according to court records.

Company President Shannon Faries and Chief Executive Cary Fierro are listed in court records as co-owners of Cameron Financial.

Neither they nor the company’s Santa Maria attorney, Sandra McBeth, could be reached for comment.

Cameron Financial’s largest local creditor listed in court records is San Luis Trust Bank, which is owed $1 million.

Also among Cameron Financial’s dozens of creditors are major global financial firms such as Morgan Stanley, Bear Stearns, retail mortgage lender Countrywide Financial and Deutsche Bank.

They are owed $400,000, $2.1 million, $2.7 million and $8.2 million, respectively, according to court records.