A Sandy Springs company that processes foreclosure paperwork has filed for bankruptcy and plans to sell its businesses.
Prommis Holdings, which spun off from the Atlanta real estate law firm McCalla Raymer in 2006, restructured outside of bankruptcy in mid-2012. Citing regulatory scrutiny of mortgage companies’ foreclosure practices and customer disputes, Prommis filed for Chapter 11 bankruptcy protection Monday in Delaware, along with 10 affiliates. Three related businesses did not file and will try to sell on their own.
In court filings, CEO Charlie Piper said Prommis had been hit by a “perfect storm” of problems as foreclosure timelines slowed and a large customer breached agreements, sending it into a liquidity crisis. The company owes creditors nearly $74 million, and listed assets between $10 million and $50 million.
Major creditors include several law firms with which Prommis did business.
The company filed initial forms to go public in April 2010, but withdrew its registration statement in May 2011. Prommis Solutions, as it was called before the restructuring, has undergone scrutiny for the speed of its foreclosures, including allegations by borrowers of so-called robo-signing, which happens when people sign mortgage documents without verifying the accuracy of the information.
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