The state wants to know if Capital Commerce Mortgage did anything illegal when it shut down.

Bill Nystrom is one of those borrowers. He was looking to refinance with a little extra to safeguard his home's value. His list of home improvements is short: replacing his 28-year-old roof and redoing his driveway. Nystrom refinanced, got his loan approvals, and was set to sign the documents this week.

Nystrom ordered the driveway work done, but then found out Friday the lender, Capital Commerce Mortgage, was broke and he wouldn't get his loan. "It was tough, it was tough," said Nystrom.

CCM promised and guaranteed low interest rates on thousands of loans. But when the market rates went up, CCM couldn't meet those guarantees. The California-based company closed down.

At Mortgage Specialists in Tukwila, stacks and stacks of files fill every table top and available floor space. They are just some of the hundreds of loans Mortgage Specialists had with CCM.

"After we got ourselves up off the floor, stopped the tears and the hyperventilating," said President Dianne Hawley, "we worked all weekend long 'till midnight."

Mortgage Specialists now has most of its CCM loans rewritten through other lenders, but at higher interest rates.

Hawley is convinced what the company did is illegal. "We had a commitment, We had people who had already signed and were supposed to fund on Thursday and Friday, we had a commitment. They did not meet that commitment, they let us all down."

Hundreds of CCM employees are also out in the cold. The Bellevue office employed 43 workers. "It was just a shock and a lot of us are really numb," said laid-off employee Michelle Bentley.

Washington's Department of Financial Institutions is investigating CCM.