A federal judge dismissed Florida mortgage lender TransLand Financial’s bankruptcy case Wednesday after the company agreed to settle debts with several creditors.
In August, Maitland-based TransLand Financial had been forced into involuntary bankruptcy after Federal Trust Bank, Tier One Bank and MidCountry Bank accused the lender of failing to remit loan payoffs worth $22 million.
On November 27, TierOne Bank and MidCounty Bank asked Judge Arthur B. Briskman of the U.S. Bankruptcy Court in Orlando to dismiss the involuntary bankruptcy case against TransLand.
“Since day one, TransLand wanted this involuntary bankruptcy case dismissed. We’re glad it finally came to pass,” said bankruptcy attorney Roy S. Kobert of Orlando law firm Broad and Cassel.
The company had been accused of a “lapping scheme,” in which the lender used payoff money to make new loans and pay expenses instead of turning over the funds to the banks.
TransLand Financial was one of the largest privately owned residential construction-to-perm lenders in the U.S., originating roughly $60 million a month at its peak, though it recently suffered layoffs and its future plans are unknown.
According to the their website, the company is active in 37 states and approaching $1 billion in loan origination volume.
Update: The Implode-O-Meter has reported that TransLand Financial is no longer originating loans, and currently unloading its existing portfolio.