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AIG considers closing Greensboro-based mortgage unit

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Comments (21)

Saturday, May 2, 2009

(Updated 6:44 am)

By Amanda Lehmert
Staff Writer

United Guaranty Corp., a Greensboro-based mortgage insurer, may either be sold or shut down by parent company American International Group for failing to turn a profit, Bloomberg News has reported.

Parts of the business, which employs about 500 people in Greensboro and 950 worldwide, could wind down if AIG can’t find a buyer, sources told Bloomberg News Service.

The operation is based downtown in an office tower on the north side of Center City Park.

AIG has promised to sell its various businesses to repay billions in loans from the federal government and has announced billions of dollars in asset sales since September, according to Bloomberg.

But an AIG spokesman would not say what the exact plans are for United Guaranty or its Greensboro workers.

“We’re considering a number of options, but no decision has been made,” said AIG spokesman Peter Tulupman.

United Guaranty reimburses mortgage lenders when buyers can’t pay and foreclosure doesn’t cover losses. It lost $2.5 billion in 2008 and AIG said the recession would continue to affect it into 2009.

Earlier this year AIG, once the world’s largest insurer, reported the biggest quarterly loss in U.S. corporate history — $61.7 billion.

The Greensboro headquarters employs people in the sales, marketing, executive, underwriting, loss mitigation and information technology divisions of the company, Tulupman said.

Earlier this year, former Greensboro Mayor Jim Melvin took out a full-page advertisement in the News & Record in support of United Guaranty. He argued that the company should not be “painted with the same brush” as AIG.

Unlike its parent company, United Guaranty did not accept bailout money.

The housing crisis has hammered mortgage insurers.

Contact Amanda Lehmert at 373-7075 or amanda.lehmert@news-record.com

Accompanying Photos

Joseph Rodriguez (News & Record)

Photo Caption: AIG’s United Guaranty Corp. in Greensboro.

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ravencottage

May 1, 2009 - 5:54 pm EDT

Leaving after Kay Hagan and Brad Miller voted for all those AIG bonuses? I'm shocked.

Jdubya

May 1, 2009 - 8:16 pm EDT

Haha!! Reminds me of the Titanic!!

Paul J

May 2, 2009 - 9:22 am EDT

Its about time all those thieves felt our pain.

luvdowntowngso

May 2, 2009 - 12:25 pm EDT

Wow! Interesting commets on this story so far....extevsive use of "brain power" for sure! Rather than wishing to see move blood and the failure of a company, why can't we use a somewhat more mature approach? We are talking about the possibility of 500 jobs being lost for citizens of our community. This would also have a negative impact on our efforts to revitalize our downtown.

BurVegas

May 2, 2009 - 2:35 pm EDT

luvdowntowngso? Have you ever worked at United Guaranty? If not then hold the comments to yourself. If you knew the lies UG has told it's employees over the years then you would welcome the negative comments and UG's demise. I get GREAT pleasure hearing this news and I thank UG for giving me a head start in my job search. In the long run it worked out perfectly...but some employees weren't that fortunate. They kept drinking the Kool Aid and riding on the Titanic. This company made poor decisions despite the recommendations of many. How do you agree to insure a loan where customers are allowed to get a loan with no documentation of income...or even better allowed to arbitrarily state their income for qualification purpose?? Do nail technicians make 75k/yr? How about barbers who make 100k/yr? These are some examples of loans UG insured. This company got greedy and is getting what it deserves. You don't insure loans with 600 fico scores or even better you dont agree to insure a loan with a 55% debt ratio or neglect to penalize a borrower who has just filed bankruptcy. In this business you will fall on your face if you fail to recognize these red flags. I know the ecomony had some play in this failure but ANYONE who works or worked for UG will tell you that poor decisions were the main factor in this collapse. Poor decisions that alot of us were screaming that these sort of loans WILL NOT WORK. It didnt matter...they still drove their Lexus SUV's, Range Rovers and enjoyed their boats. They were getting their bonuses and going to the Bahamas. Life was good.

Try working for a place that resembled the Titanic sinking? The fearless leaders told everyone things were fine...jobs werent in jeopardy despite the rumors. Afterall, we were backed by AIG...one of America's most respected companies who had endless pockets of money. These are examples of what the UG braintrust kept telling us. United Guaranty did all sorts of underhanded things to save money but taking away a few laptops or firing a few employees for petty things wasn't the solution. It was a place with TONS of chiefs and very few indians. And let me tell you, those chiefs made a good salary and an even better bonus. Even weeks before layoffs began UG was still telling the same ol' story..."things were OK...UG is ok." But the employees knew better. So now as this story leaks UG is still sending it's employees emails stating the story in the news/record isn't true. Wonder why they didnt send an email to the News and Record discrediting the story??? Same ol' lies. You guys deserve this...and you all know who you are. Good luck finding a job making the salary you once made and being allowed to read the newspaper at your desk every morning with your feet propped up on your desk or calling your spouse to place a grocery order for dinner..and dont forget the wine. All good things must come to an end...now it's your turn. PTTP.

PS...Elon Law School take notice....there's some office space available soon....a great place to expand that beautiful school.

luvdowntowngso

May 2, 2009 - 3:20 pm EDT

Bur Vegas, Well written comments from a person that has the inside scoop on UG and AGI. I could not agree with you more! The heads of those who made careless and stupid decisions should roll! However, don't blame your fellow employees that were just doing their job! I drink the kool-aid everyday at my job. I rarely agree with the decisions my boss makes, but I do as I am told. Everyone has the choice to work and pay their bills or leave the company. My comments were in supports of the average emloyee just working for a living! I believe it's possible for UG to come out as a much more responsible company. Maybe if UG is sold this will happen. Let's hope so!

punked

May 2, 2009 - 4:06 pm EDT

adaboy UG . . you were more concerned about the bottom line than about making prudent business decisions. Did listening to your employees EVER cross your mind? I guess the numerous company surveys that were deemed so crucial by you fearless leaders were all in vein. Say it with me "LISTEN" . . Stated programs and subprime lending is not prudent business! Of course, it was good for your bonuses! ! ! Good luck with the job search!

AIGsucks

May 3, 2009 - 11:00 pm EDT

Well written comments about the fall of the house of usher! It is an unfortunate happening for the many employees of UG who have already lost their jobs and the ones to come in the future. But of course in the words of UG management "everything is OK......" UG was a very well ran machine for many years under the leadership of Charles Reid. However, all of that changed in the early 2000's......and GREED set in......and the mentality of UG management became "HOW FAST CAN WE GROW? 15%.....20%....40%...the more the better! So yes lets insure anything we can get our hands on....stated income....FICOs down to 580....duplexes....brokered 2nds.....60% debt ratios.......oh and why not Student Loans as well...after all why not insure a 30K loan for a community college student??...whatever it takes to get the big AIG bonus while working the "Indians" to death. After all UG will be fine b/c they have AIG behind them....you know the company with the strength to be there!! Well 180+Billion later (From you and me and the US taxpayers) and they still most likely fail! But oh well...guess there is still time for one more trip for massages on the backs of the taxpayers!

I hope the UG management team sleeps good at night knowing the train wreck they have caused and the lives that have been turned upside down by the decisions they have made. The only way UG survives besides a capital infusion from the taxpayers is complete change in the management team. Lets hope that occurs and the 400+ employees don't lose their job because of the greedy decisions of a few at the top. And lets all hope they get a risk manager with a college degree where the tax payers will not have to bail them out or pay the claims for their lenders because they don't have the money to pay them!! The UG management team in a show of good faith should donate lots of money to the former and future laid off workers where their families can food on the table and pay their health insurance.....that isn't too much to expect from the UG management team is it??

damask5

May 14, 2009 - 1:11 pm EDT

I have also worked at good ole AIG UG and can vouch for everything BurrVegas states and MORE! Unfortunately I did not have the opportunity to work there while it was ran by Mr Reid, he had just semi-retired when I started ... after 6 1/2 yrs of hard work and many long nights, weekends and early mornings, I was fired for what every HR Person I have talked to since then says was "a reason to get rid of you".... what is typical of UG was rewarding the management butt kissers, the 'yes' men and women.... I was not one of those and on more than one occassion was reprimanded for voicing my opinion (despite how professionally I might have voiced my opinion). All the while there I had an excellent reputation for providing superior customer service to ALL. My problem was that I knew too much, or someone in management thought I 'knew too much' and had been looking for a reason to fire me, which I accidentally gave them one day! I was told I was being fired because in my position they had to have accountability, funny though that in my time there I was involved in MANY 'investigations' of upper management who were doing MANY illegal and highly unethical things but did they EVER get fired? NO, they got their slap on the wrist, and continued on their merry way helping make piss poor decisions while the rest of us actually did the work and did a fine job doing so! One thing that I am surprised has not happened yet is a whistle blower coming forward about first hand knowledge of very 'hush hush' BONUSES, basically a 'club' that you were 'invited' to be a part of! This little club has been going on for years, I never have heard or found out what it took to get invited as I was never invited, however through several other former employee's (and personal friends) I know all about their little scheme in IT Management. But Greed breads Greed and the IT management team fell right into that!

What I do hate is all of the people that I know there, many of whom I still consider very dear friends! I personally say fire every one of the management team that has been there during the last 10yrs, find a viable partner to take ownership of the company and rebuild it with the same great workers who have been working trying to do what they can to make a living! If that were to happen I personally would go back and work there IF they would hire me AND IF management was changed!

gboroborn

May 2, 2009 - 3:40 pm EDT

To all of you who think UG is getting what they deserve, you have no idea what you're talking about. UG may be tainted in the news but, you're only reading from the outside. As you all should know, the everyday nine to five employee doesn't make any of the Big Decisions and to wish the place was shut down is just IDIOTIC!!! We're talking about more than 400 employees losing their jobs and all you can say is about time? Judgement is for GOD and since I'm more than 100% sure that none of you are him, I'll smile at you little rants knowing that your comments are BS!!!!!

BillyzNutz

May 2, 2009 - 4:01 pm EDT

Gboroborn, did you not read BurVegas's comments? His/her comments are from the INSIDE and he/she is not reading from the outside. Read before you comment. It is YOU who have no clue what you are talking about since you've obviously never worked there. It's apparent this company insured people who COULD NOT AFFORD to pay their mortgage, overextending theirselves and losing their freaking home!!! That's not a service to these people. UG contributed to these peoples failures. Get a clue Gsoborn and please leave God out of this. I am sure you've NEVER sinned.

punked

May 2, 2009 - 4:26 pm EDT

gboroborn . . . if AIG would have wised up and fired about 6 of the idiots making all the decisions then maybe all the nine to five employees who DID all the work wouldn't be in jeopardy of losing their jobs. And by the way, a large part of the 400 employees have already been given their pink skips and I can't think of 1 executive that was included.

gboroborn

May 2, 2009 - 7:59 pm EDT

BillyzNutz, I can see you're a very intelligent person by the screen name you chose LMAO!!!!! Punked, like Mr. Nutz, you have no idea what you're talking about. While they provided insurance on homes that people couldn't afford, the people who couldn't afford it accepted the freakin deals! Everbody points fingers at the lenders and stuff, how about the borrowers who know for a fact they can't afford it? Mr. vegas should be a real man/woman and not hide behind his screen name, who is he/she? How do you know I don't work there? I hate that people are losing their homes! I've been poor my WHOLE LIFE and I wouldn't dare buy something that I knew I couldn't afford!!!!!!!!! When will the people who wanted homes realize that they were part of the problem also? Question...If you make 35,000.00 a year and a realator tries to sell you a 225,000.00 dollar house, would you take the house? No, my guess is that you wouldn't, but then again I have no idea what I'm talking about right?. Let's keep it real people!

FMeBill

May 2, 2009 - 9:43 pm EDT

Gboroborn DOES work for United Guaranty...has to...look at his mindset! It makes perfect sense and it's the same irrational thinking that goes on at UG. Anyone who can justify a company who lost $2.5 billion in 2008 by saying it's the borrowers responsibility to make sure they can repay their loans has no clue how to run a successful business. If I own a business I make darn sure anyone I lend money to can repay their loan. I certainly dont leave it up to them to make this decision. UG is in the business of insuring loans and making sound decisions but insuring FICO scores of 600 and debt ratios of 55% isnt what I would call being smart. UG is getting what it deserves by insuring loans they had no business insuring. How stupid is it to leave it up to borrowers to determine if they will be able to pay a loan. Dont you think the person who is insuring the loan or the people who are lending the money should make this decision? Afterall, they have EVERYTHING to lose...and in this case $2.5 billion in 2008.

As far as your comment about hiding behind a screenname why havent you disclosed who you are gbroborn? You comment about Vegas but then I dont see your name anywhere. People dont typically put their names on comments like this. Its not because they are hiding...its because people just dont do it.

Now I will ask you a question Mr. Holyroller....if you're in charge of a bank and you are in charge of making the decisions do you a)decide for yourself via debt ratios, fico scores, income, credit, etc whether to make the loan or do you b) allow the borrower to make the decision because afterall they should know if they can afford the loan or not.

You're a joke, gboroborn.

gboroborn

May 3, 2009 - 10:58 am EDT

I'm a joke lol! Say what you want, you still have no idea what's happening. If I am portraying myself as a holyroller then you have gotten the wrong idea about me. How come none of you are hoping that Lincoln Financial fails? Why does the fall of UGC appeal to you people? Some of the decisions that the "Bosses" made were stupid and that's a fact, but to wish the whole company would close is just ridiculous. I'm a joke, holyroller, and whatever else you want to call me, but at least I am smart enough to know that the blame goes both ways!

LensGirls

May 3, 2009 - 8:51 pm EDT

gboroborn . . you sure you're not one of MD's kids? You seem hell bent on putting ALL the blame on the greedy borrower's who knew they couldn't afford that $500K home, but thought they deserved it. Maybe it was the Realtor who convinced the borrower they had a program that would get them qualified for that dream home. Or, maybe it was the broker's fault. Afterall, everyone knows broker's would lie, cheat, and steal to make a deal work. Or, maybe it was the lender's fault, since they approved the loan for the Admin Asst. making $7,500 a month, or the Cab Driver making $11,000 a month, or the self-employed Nail Tech making $10,000 a month. Although, there is enough blame to go around, it was all made possible by the MI company. Do you think for a minute that the Realtor, Broker, or Lender what have self insured these ridiculous loans? No, if it wasn't for the MI company, none of this would have occurred! And, from the other comments I'm reading, it sounds as if the employees of UG were more capable of running the company than the BIG decision makers! But, then I probably don't know what I'm talking about either.

RHsNapoleonComplex

May 3, 2009 - 11:27 pm EDT

We all know that dog wont hunt. Why dont we just take our ball and go home? RH is a joke.....looks like you have failed twice!!! You have cost people their jobs and ruined their lives...YOU KNEW BETTER YOU LOSER!

gboroborn

May 4, 2009 - 12:49 am EDT

I agree with rhs...let's take our ball and go home. Companies fail all the time right, especially crooked companies lik UG! How bout we all meet at cafe Europa on Wednesday for half priced wine? Any takers?

byebyeUG

May 4, 2009 - 8:52 pm EDT

As a former employee I cannot be more thrilled that this might actually happen. What comes around goes around. When I first started a UG it was a GREAT company. AIG slowly squeezed every penny of profit out of it.

I gave up huge amounts of my personal life for this company - received "above expectations" on my performance reviews. Then due to another of Greensboro's brilliant restructurings - I was given the option of severance or taking a demotion. I wanted to stay with the company so I took the demotion.

I was a field employee - in another state - not in Greensboro, North Carolina. They never listened to how it was in the field - dealing with customers - they lived in a shell in the corporate office - they had no clue what it was like. They closed the field offices and sent everyone home to "telework" - another brilliant idea (dripping with sarcasm). Isolated in your bedroom/office - communicating by e-mail, phone, or instant messaging. Setting quotas / workloads so high people were seriously stressed out. They made stupid changes so they could "grow" and squeeze more money out of the company for AIG. They got rid of any managers or employees who voiced what they thought - either outright - by a "workforce reduction" - or making your life miserable.

When I finally couldn't take it anymore I quit - on the spot - after almost 7 years. I never thought I would leave UG. It WAS a great company. I hope all the people who made the rest of our lives miserable - reflect on what they did. Of course with their arrogance and cluelessness - they won't get it. Like someone else said - I guess the positive thing was - I was able to find a new job well before the rest of the industry. While some questioned my departure - how could I quit my job when I didn't have another new job to go to -by the end of my employment with UG my self esteem was extremely low . I had a mortgage and bills to pay - but I couldn't stand it anymore. I feel better and better about my decision - and look smarter and smarter - that I left when I did. I now work for a company that treats me like a human being and not a number. Bye Bye Good Ol' Boys Club (and a few Good Ol' Girls Club members too)!

AIGsucks

May 4, 2009 - 10:54 pm EDT

LIES, LIES, and MORE LIES! This will make for a very interesting movie one day! It will be an interesting string of characters for sure and will have to be R rated for more than one reason. Basically it comes to the simple premise of treating people wrong and eventually you will pay for it! I just hope our government could tax all bonuses to all of the UG management team since 2001 at 100%! But even better than that the UG managment team has to sleep with it every single night! It must be hard to sleep knowing the pain and lives that have been turned upside down by your mindless decisions.

byebyeUG couldn't be more on! UG was ran as a 'YES" man/woman shop. Just say yes to what the captain wants and you would be liked and advance up the ladder. The browner the nose the higher you go. Speak out about what you think is correct and if it is against UG management then your life will be made to be hell. Before you know it there will be a phone report on you, a bathroom report on you, and who knows what else! UGC put in a diversity initiative....hired some people to become more diverse....some of them only got to work a few months before being laid off. What a favor UGC did for everyone.

Another example of a LIE told by UGC is that they would release the contract workers before the full time workers. Think they did that? Of course not. Sure they laid off 10 people only to create 2 positions, which they filled with WHO they wanted and only probably did this for SHOW!

But I can TELL you this, LIFE on the OUTSIDE contrary to what UGC says is SO MUCH BETTER than on the inside! My blood pressure has dropped from 150/110 to 110/70 and I actually get home to enjoy my life outside of work hours before most UGC workers do.

It really means alot to work for a company that I can say I AM PROUD of!! Its beats working for a company that I was embarassed to say I worked for.....you know the one with the strength to be there.....or the one that says "we know money". Yes, they know money...they know your tax dollars to the tune of 180B! After all I am sure we all would like massages at the expense of someone else (or should I say everyone else!).

RHsNapoleonComplex

May 5, 2009 - 12:07 am EDT

You know what's sad....the UG management is STILL telling people things are going to be ok. They are still drinking the Kool-Aid. Have fun at your Town Meeting...hearing all is well. Are you guys that stupid?? All you are doing is hanging around just to turn out the lights. Why get caught with your pants down? Get out!