Journalism in the Public Interest

Head of Allied Home Mortgage Has Had a Bumpy Journey

Jim Hodge started what became one of the biggest mortgage operators the same year his previous savings and loan was seized and sold by the Resolution Trust Corporation.


Jim Hodge, founder of Allied Home Mortgage Capital

With his jeans, Hawaiian shirts and graying hair wisping over his collar, Jim Hodge looks more like he belongs at a Jimmy Buffett concert than at the helm of a major mortgage company. But brokering loans has made Hodge a wealthy man.

Hodge or his companies own some 20 properties — in Houston, St. Croix, near Aspen and on the main drag of Sturgis, S.D., site of one of the largest motorcycle rallies in the USA.

To get to his far-flung homes and businesses, Hodge, 69, uses one of his companies' two airplanes, including a $3.1 million Cessna jet. His fleet of cars and Harley-Davidsons includes "Big Daddy," a custom bike his employees gave him.

"I've had a great run," he says of his 40 years in the mortgage business. "Every day I get up and say, 'Thank you.' "

But it's been a bumpy journey.

In 1991, the Mississippi savings and loan he owned, Mercantile Savings Bank, was seized. The Resolution Trust Corp. estimated the takeover and sale of the bank would cost it $5.7 million.

Regulators fined Hodge for misusing the bank's money, among other things. A 1992 cease-and-desist order stated that Hodge couldn't hold any leadership post in an insured savings association.

Hodge blamed bookkeeping errors and an overwrought government focus on savings and loans. He got the order terminated in 1998.

"It's just the most bizarre Alice in Wonderland I've ever seen," Hodge said of Mercantile's seizure.

The same year he lost his bank, Hodge launched Allied.

At its peak in 2003, Allied boasted that it originated $15 billion worth of loans a year and had more than 700 branches, according to its website. BrokerMagazine listed Allied as the nation's top loan broker for several years running.

Now, Allied is the hub of several companies run by Hodge, including a credit union, insurance office and real estate arm. Hodge's firms also provide Allied with payroll processing, corporate personnel and company merchandise.

The result is multiple revenue streams coming to Hodge — branch offices pay affiliated companies for various services in addition to a percentage of every mortgage transaction. Hodge, his wife and his grown son own Allied.

In an interview, a relaxed Hodge freely answered questions about allegations of fraud and misconduct at Allied branches.

He said the company complies with regulations and moves quickly to address problems. He said he personally approves branch managers to hire, and he demonstrated familiarity with the minutiae of sanctions against the firm.

In recent legal depositions, however, Hodge came across in a far different way: as a distant leader unfamiliar with even basic facts about Allied. In a deposition last year, he claimed to know little about federal audits and pending lawsuits and drew a blank about a meeting, held only a day earlier, to arrange lines of credit for Allied.

Attorney Susan Hutchison, who represents a former manager at a Hodge company who claims he was fired after he got a brain tumor, said Hodge told her during a break in the deposition: " 'I will fight this until my last, gasping, dying breath.' "

Hodge said his heart is still in the business and that Allied will survive the lawsuits and any broadsides from regulators.

"That's our motto," he said in his Texas drawl. "The last company standing."

I was a branch manager for Allied for 6 years and left at the end of last year and have spent time around Jim Hodge.  Jim is a stand up guy and you can find these type of violations with any large company out there.  Just google any large company name and put “violations” in Google box.  Owners of companies can only do so much and this is no different.  My branch was audited many times by Allied and the State of Ohio and there were NO violations!  Hodge will fire you if you violate any laws and I know that for a fact.  He is a great guy and has much integrity.  AHMCC will survive this article and keep on winning.  Bank on it!

VF went on to have great success as an MC for The Biggest Douche of the Universe Pageant

Change my a**!

July 5, 2010, 11:55 a.m.

Hey VF - why did you leave such a great company and give up the change to work for such a stand up guy?  You know what they say about light being the best antiseptic, don’t you?  Yes, many of the big companies routinely screw people, and reltaively speaking, Allied is a smaller cockroach.  However, it is still a cockroach!  Now, Jim may really be a nice guy but he is also a very smart guy or he would not be where he is today.  Unfortunately for many of his clients/customers, he is using his talents to beat the system overloaded by lazy regulators instead of finding innovative ways to serve his customers honorably.  I am sure his attorney(s) are not complaining but being sued and settling repeatedly in many jurisdictions is not how one identifies a stand up guy.  Of course, the lawyers love to say, “ was more cost effective to settle than to fight these charges…”  Yeah, right!  I guess ranch hands can also pretend to be smelling some exotic dish when mucking, huh!  Gotta love the world you live in.

I currently work for Jim Hodge and I second the fact that he is stand up man and has 0 tolerance for any kind of violations. Considering this is coming from a news source (and I use that term loosely) whose editors, the Sandlers, were listed in Time’s Magazine as one of the top pople people to blame for the Financial Crisis? And The New York Times referred to them as the “Typhoid Mary” of the housing crisis? The best way to avoid the spot light is to point to someone else.

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