Sprout mortgage12/12/2023 Simkin declined to say when Sprout asked to terminate the contract or provide any additional details. Health insurance provider Empire Blue Cross Blue Shield spokesperson Alessandra Simkin confirmed that the contract terminated on May 1, 2022. HousingWire reviewed multiple former employees’ paychecks – for May 6, May 23, June 7 and June 22 – to confirm they paid health insurance premiums. He added: “When you have a family of four and the insurance company tells you might have to pay back everything because you didn’t have coverage at the time of services, it’s a huge deal.” “Sprout collected money from our paychecks to pay the health insurance premiums in May and June, but we were told we don’t have the coverage for this period,” said a former employee who requested anonymity. Sprout, like many lenders, had been hemorrhaging money after a sharp rise in mortgage rates saddled it with tens of millions of dollars in loans it couldn’t sell to investors in the secondary market at par. The Long Island-based lender, headed by industry veteran Michael Strauss, shut down suddenly after a deal for funding fell through, sources told HousingWire. Some former employees, without a job and at risk of having to pay tens of thousands of dollars in medical bills, filed complaints with the New York State Attorney General’s office. There’s more grim news, too.Ī week after shutting down, Sprout cut off health insurance retroactive to May 1, despite collecting insurance premiums from employees’ paychecks, according to multiple former employees and documents reviewed by HousingWire. Instead, paychecks weren’t delivered to employees, and severance wasn’t offered, former employees said. They also expected Sprout to offer severance packages to cushion the blow. When non-QM lender Sprout Mortgage abruptly shut down on July 6, more than 300 workers expected their last paychecks to be delivered the following day as scheduled.
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