Timeless Funding LLC, loaned beleaguered Hometown Lenders $348,750.00 in October 2023, per a lawsuit filed in New York on Dec. 29. The alleged agreement between both parties dictated that Hometown would have access to the cash, while Timeless Funding would be paid back via Hometown's future loan origination business. 

Hometown purportedly agreed to remit to Timeless Funding "25% of receivables until the full purchased amount was remitted," the suit said. But things didn't go as planned, according to the plaintiff.

Initially the Alabama-based shop "met its obligations under the agreement" and Timeless Funding was able to recoup $167,400 of the amount it loaned, documents show.

However, following that Hometown allegedly ceased to remit "to plaintiff the plaintiff's share of purchased receivables and otherwise breached the agreement by intentionally impeding and preventing plaintiff from receiving the specified percentage of company defendants' receivables, while conducting regular business operations and collecting revenue," Timeless Funding said in its suit.

Hometown Lenders CEO Billy Taylor did not respond to a request for comment. Timeless Funding also did not respond.

In mid-December, Data Mortgage filed a lawsuit against Hometown, too, alleging a breach of contract. The correspondent loan buyer, which does business as Essex Mortgage, is accusing the Alabama-based shop of violating a purchase agreement made Jan. 10, 2023. As a result, it wants $700,000 in damages from Hometown. 

Former employees, government entities and other counterparties are also seeking payments from the lender. 

Additional troubles brewing include allegations from a handful of state housing regulators that the lender has stopped paying mortgage insurance premiums on what amounts to hundreds of government-insured loans.

In total, there are at least 300 Federal Housing Administration loans originated by Hometown with unpaid MIP, according to filings by regulators in the states of Montana, Missouri, Maine and Alabama. The Department of Housing and Urban Development and HUD's Office of Inspector General are aware of Hometown's problems with mortgage insurance on the FHA loans, according to a government official.