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Dominion Homes has had a rough road in Columbus. With pending litigation against the company for their sales practices in Ohio, not to mention lawsuits by their customers, Dominion looks to be unraveling their company. Now they are partnering with Wells Fargo Home Mortgage to get the loans off their books and put some distance between Dominion’s operating groups.

If you think about it, selling a home and approving a mortgage should be separated. If you were holding the paper on your customers, it may be different as you are taking the risk. But when you broker the mortgage and then sell it, you have very little exposure and it tempts you to make loans and valuations that may not be grounded in reality.

Dominion is forming a mortgage bank with Wells Fargo Home Mortgage, the largest new-construction lender in the United States. The bank will replace Dominion Homes Financial Services, which Dominion created in 1999 to write mortgages for the homes it builds.
In recent months, Dominion has faced inquiries from the U.S. Department of Housing and Urban Development and the Ohio attorney general, and lawsuits from customers who say their houses are worth less than they paid for them.
The mortgage bank will be a subsidiary of Wells Fargo, which will be its majority owner.
“We’re not getting out of the mortgage business; we’re changing our approach to it,” Dominion Chief Financial Officer William G. Cornely said.  via The Columbus Dispatch

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