Monthly Summary of Mortgage Activities Georgia Department of Banking and Finance 2990 Brandywine Road, Suite 200, Atlanta, GA 30341-5565 MAY 2001 Please review the enclosed list for details on licensee additions and deletions which occurred during May. The Mortgage Division received 57 applications for a new license or registration and 1 application for reinstatement of previously revoked or withdrawn license. Twenty-six licenses were either revoked or withdrawn during May. There were 2,843 current licensees/registrants as of May 31, 2001. LICENSES ISSUED IN GEORGIA ARE SUBJECT TO REVOCATION, WITHDRAWAL OR SUSPENSION. TO VERIFY THE CURRENT STATUS OF A LICENSE CALL 770-986-1633 OR CHECK OUR WEB SITE AT http://www.state.ga.us/dbf/ In May, two regular mortgage broker/lender examinations were performed by the Mortgage Division examination team. Also, the Mortgage Division received 3,305 mortgage related telephone calls. Of these calls, 363 were verbal consumer inquiries; and 107 were verbal consumer complaints. The Division of Legal and Consumer Affairs, (770) 986-1633, is charged with the responsibility of handling legal inquiries and consumer complaints. If you are a current licensee and would like to be notified when the Monthly Mortgage Summary is available on the Internet, please E-mail a message to dbfmort@dbf.state.ga.us. Be sure to include your license number and the name of your company in your message. If you do not have E-mail but do have a local Atlanta FAX number (area codes 770, 404, 678, or 800, or 888), have a 9600 or 14400 baud modem, are not currently receiving the Monthly Mortgage Summary by fax, and would like to have the Summary faxed to you, please send a fax to DBFMORT at the Department's Mortgage Division at 770-986-1029. PER LOAN FEES - "Per loan" fees for the first half of 2001 are due by September 1, 2001. If you have reported the "per loan" fees to the Department during the past 12 months or if you hold a Georgia Residential Mortgage Lender license, you will be mailed a "per loan" fee reporting form in the near future. Please use this form to remit your fees. If you are a licensed mortgage broker or if you are exempt from licensing or registration a copy of the "per loan" fee reporting form can be found on our website or in Rule 80-5-1-.04 (2) issued by this Department. The fine for late filing of your Per Loan Fees is $1,000. These fines will be posted to the delinquent licensees on or after November 1, 2001. If you do not close the loan in your name, and your name is not on the security deed - you do not owe any "per 1 loan" fees. Regardless of the volume of loans (even "0" loans closed), you should send in the fee report. Proper payment of these fees will be monitored by our examination team. The ANNUAL LICENSE RENEWAL process is now underway. Renewal application forms for the fiscal year 2002 mortgage licenses were distributed beginning February 5, 2001. A $300 late fine was assessed against licensees who failed to return the renewal application form prior to April 1, 2001. As in prior years, all outstanding issues such as fines, fees, stale audits, complaint settlements, etc. must be resolved before your renewal license will be granted. Licensees who do not complete the renewal process by June 30, 2001, will have their licenses expire, and will have to cease operations. Lenders whose license expires will have to divest of Georgia residential loan portfolios. If you have not received your renewal application forms, please contact the Department immediately. AUDITED FINANCIAL STATEMENTS - Lenders and some Brokers have licenses which are dependent upon the filing of current audited financial statements with this office. Those whose audits which are more than 15 months old may be subjected to fines and/or revocation of their license. It is the RESPONSIBILITY of the licensee, as professionals licensed to operate in the mortgage industry to insure that these audits are current AT ALL TIMES. Care must be taken to employ a CPA who has time to service your account in a manner so as to protect your license. Requests for an extension will not be granted. License renewals will not be granted for those licensees whose audits are not current. Please keep in mind that the net worth requirements in Georgia are predicated on tangible assets. Assets including but not limited to items such as "goodwill" and accounts "due from" shareholders, affiliated companies, directors or officers will not count as tangible assets. REPEAT COMMENT: LICENSING STANDARDS The renewal process this year has revealed continuing problems with some of the CPA's who are performing audits for certain licensees who must demonstrate that they continue to meet licensing standards. Unfortunately, we have discovered several circumstances where CPA's are preparing "as instructed" audits. Apparently, no proper verification of assets is being performed in accordance with generally accepted auditing standards as prescribed by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants. We have discovered CPA's certifying property values which are far in excess of a reasonable fair market value, and which are not supported by valid appraisals. We have discovered instances of CPA's certifying assets which are not even held in the name of the licensee. We have discovered CPA's certifying balances in financial accounts which do not remotely begin to resemble the actual balances which are (or have ever been) in an account. We have even seen instances where a CPA certified an audit of a "corporation" which was not even incorporated! Our examiners have been instructed to continue to perform independent verification of assets as a routine part of their examinations. Filing an audit (which is a condition of continued licensure for some licensees) with this Department which contains false statements or material misrepresentations of this nature is deemed to be a violation of Section 7-1-1013 (11) of the Georgia Residential Mortgage Act. It is possible and likely that such an action could result in termination of the license, either through revocation or expiration. 2 On another issue, it appears that some individuals and companies who are licensed as mortgage brokers are acting in the capacity of a lender by funding loans in their name and not assigning the loan within 24 hours to a licensed lender. When this situation is discovered, the broker will be required to upgrade to a lender's license. This will result in the imposition of additional licensing fees for the period of time that the broker acted in the capacity of a lender, and fines for the loans which were funded in the name of the broker. The proper reporting schedules must also be completed. Should the broker not be able to meet licensing standards as a lender, the broker will be required to divest of any remaining loans being carried on their books, and the license will be subject to Revocation. PLEASE NOTE: Commissioner Bridges has appointed Drexel Beck as Acting Deputy Commissioner for Mortgage Affairs. This interim appointment is due to Robley Rigdon's long term military assignment to Bosnia, where he is serving as Assistant Division Commander in NATO's Multi National Division. Robley is expected to return to his DBF duties during the last quarter of 2001. ID# 5727 5903 5903 5987 5987 7072 7072 7255 7255 7374 7374 12314 12314 12469 12469 13001 13001 13408 13408 13408 13556 13556 14887 14974 14974 FINES ASSESSED IN MAY 2001 ISSUE DATE FINE REASON FINE PAID DATE COMPANY NAME 05/02/2001 BR $250. 05/08/2001 Citizens Fidelity Mortgage Corp 05/03/2001 REN $300. 06/14/2001 Mortgage Associated Lending 05/03/2001 NSF $25. 06/14/2001 Mortgage Associated Lending 05/03/2001 REN $300. Lincolnshire Financial Group, Inc. 05/03/2001 NSF $25. Lincolnshire Financial Group, Inc. 05/24/2001 REN $300. National Credit Financial Consultants 05/24/2001 NSF $25. National Credit Financial Consultants 05/03/2001 REN $300. Security Home Construction, Inc. 05/03/2001 NSF $25. Security Home Construction, Inc. 05/14/2001 REN $300. Michael Anthony Grier 05/14/2001 NSF $25. Michael Anthony Grier 05/22/2001 REN $300. Hamilton Insurance Services 05/22/2001 NSF $40. Hamilton Insurance Services 05/14/2001 REN $300. Robert Olden Carter 05/14/2001 NSF $25. Robert Olden Carter 05/14/2001 REN $300. Valerie L. Harper 05/14/2001 NSF $25. Valerie L. Harper 05/30/2001 OTH $13000. First Stop Financial, Inc. 05/30/2001 FILE $5500. First Stop Financial, Inc. 05/30/2001 B&R $3000. First Stop Financial, Inc. 05/14/2001 REN $300. Fernando Barney 05/14/2001 NSF $25. Fernando Barney 05/16/2001 BR $500. 05/24/2001 Primary Capital Advisors, LC 05/16/2001 UL $4000. Pyramid Home Loans 05/16/2001 B&R $500. Pyramid Home Loans 3 CITY ST Marietta GA Decatur GA Decatur GA Decatur GA Decatur GA Norcross GA Norcross GA Stone Mountain GA Stone Mountain GA Lithonia GA Lithonia GA Duluth GA Duluth GA Jonesboro GA Jonesboro GA Atlanta GA Atlanta GA Decatur GA Decatur GA Decatur GA Lithonia GA Lithonia GA Atlanta GA Norcross GA Norcross GA 14974 14974 14974 14974 14974 14974 15120 15278 15278 15290 15290 15290 15290 15725 15725 15921 15921 15974 15974 16281 16281 05/16/2001 B&R 05/16/2001 FILE 05/16/2001 FILE 05/16/2001 FILE 05/16/2001 FILE 05/16/2001 B&R 05/17/2001 B&R 05/03/2001 REN 05/03/2001 NSF 05/17/2001 FILE 05/17/2001 B&R 05/17/2001 B&R 05/17/2001 B&R 05/14/2001 REN 05/14/2001 NSF 05/14/2001 REN 05/14/2001 NSF 05/14/2001 REN 05/01/2001 NSF 05/14/2001 REN 05/14/2001 NSF $500. $1000. $1500. $500. $500. $500. $500. $300. $25. $1500. $500. $500. $500. $300. $25. $300. $25. $300. $25. $300. $25. Pyramid Home Loans Pyramid Home Loans Pyramid Home Loans Pyramid Home Loans Pyramid Home Loans Pyramid Home Loans Bottom Line Lending, Inc. Erica Peterson Erica Peterson ABC Mortgage Services, Inc. ABC Mortgage Services, Inc. ABC Mortgage Services, Inc. ABC Mortgage Services, Inc. Donald L. Young Donald L. Young Ernest Stuart VanHoozer Ernest Stuart VanHoozer Barbara Jean Shamlin Barbara Jean Shamlin T.L.H. Mortgage Corporation T.L.H. Mortgage Corporation 1099 B&R BR CD CIC EMP FEE FEL *FINE REASON 1099 employees Books & records FILE Unapproved branch LAR Violation of Cease & Desist Order NSF Acq. of 25% ownership without REL approval REN Employer under C&D or revocation UL $6.50 fees not paid OTH Employment of a felon Loan files not properly maintained Late filing Written Annual Report Check returned for insufficient funds Relocation of office without notice Renewal filed late Doing business with unlicensed entity Miscellaneous other Norcross GA Norcross GA Norcross GA Norcross GA Norcross GA Norcross GA Augusta GA Snellville GA Snellville GA Augusta GA Augusta GA Augusta GA Augusta GA Carrollton GA Carrollton GA Carrollton GA Carrollton GA Stone Mountain GA Stone Mountain GA Norcross GA Norcross GA 4 LICENSEES/REGISTRANTS REVOKED, EXPIRED, SUSPENDED, WITHDRAWN OR DENIED IN MAY 2001 ID# NAME CODE REVOKED EXPIRED SUSPENDED WITHDRAWN 5620 METROPOLITAN MTG CORP B 05/15/2001 5624 MCNATT & MALONE MTG CO B 05/04/2001 6490 MALONE MTG CO L 05/11/2001 6595 EXTRACO MTG CORP L 05/22/2001 6664 AMCASH MTG INC B 05/04/2001 7014 RESIDENTIAL MONEY L CENTERS 05/25/2001 12198 MUTUAL HOME MTG INC B 05/22/2001 13077 OLD WORLD FINL SVCS INC B 05/15/2001 13267 DS & CE MTG CONSULTANTS B 05/21/2001 13352 CENTURY FINL GROUP L 05/10/2001 14750 SMC MTG GROUP L 05/02/2001 14855 NEW DAWN FINANCING B 05/21/2001 14908 MIKE PRINCE & ASSOC B 05/15/2001 14920 ULTIMATE MTG GRP, LLC B 05/10/2001 15103 DIAMOND LENDERS GRP B CORP 05/15/2001 15143 MTG ONE FINL SVCS B 05/15/2001 15181 EMMESS MTG CO LLC B 05/10/2001 15418 AMERICAN SKYCORP, INC. L 05/21/2001 15453 ODOM, ROBIN L B 05/15/2001 15462 EVERDRY WATERPROOFING B 05/15/2001 15501 PROVIDENT MTG CO B 05/10/2001 15627 PREMIUM FINL SVCS, INC B 05/23/2001 15663 COUNTRYWIDE MTG INC B 05/30/2001 15758 UNIVERSAL FUNDING GRP B 05/08/2001 DENIED TOTAL: 24 5 LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN MAY 2001 ID# COMPANY NAME CITY ST MB CODE ORIGINAL APPROVAL RENEWAL REINSTATED 11579 Fidelity Funding Mtg Corp. + RICHARDSON TX B 05/10/1996 05/04/2001 16384 Select Financial Group, Inc. KENNESAW GA B 05/04/2001 05/04/2001 16409 World Resource Mortgage, LLC NEWNAN GA B 05/04/2001 05/04/2001 16410 Compass Financial Services, Inc. FAYETTEVILLE GA B 05/04/2001 05/04/2001 16411 Triple J Homes CARROLLTON GA B 05/04/2001 05/04/2001 16438 Lighthouse Lending AUGUSTA GA B 05/04/2001 05/04/2001 16391 Trimark Funding Inc. ANAHEIM CA B 05/11/2001 05/11/2001 16400 Sunrise Financial, Inc. CHICAGO IL B 05/11/2001 05/11/2001 16431 United Mortgage Funding DORAVILLE GA B 05/11/2001 05/11/2001 16441 Barry L. Weatherly MACON GA B 05/11/2001 05/11/2001 6405 Wall Street Capital Funding + CONYERS GA B 06/23/1993 05/18/2001 15349 NovaStar Home Mtg, Inc.+ WESTWOOD KS L 01/21/2000 05/18/2001 16051 American Money Company CHARLOTTE NC L 05/18/2001 05/18/2001 16303 RLI Mortgage Services, LLC PEORIA IL L 05/18/2001 05/18/2001 16395 South Street Mortgage, Inc. LILBURN GA B 05/18/2001 05/18/2001 16412 Sharp Mortgages, Inc. JACKSONVILLE FL B 05/18/2001 05/18/2001 16413 J And R Financial Group, Inc. CLAYTON GA L 05/18/2001 05/18/2001 16429 First Capital Financial SUWANEE GA B 05/18/2001 05/18/2001 16434 25 Hours A Day, Inc OMAHA NE B 05/18/2001 05/18/2001 16437 Carpet Showcase, Inc. DALTON GA B 05/18/2001 05/18/2001 16449 Equity Atlanta NEWNAN GA B 05/18/2001 05/18/2001 11588 HomeComing Finl Network, Inc.# MINNEAPOLIS MN R 05/10/1996 05/25/2001 16069 Skye Mortgage Group, LLC + FRANKLIN TN B 09/08/2000 05/25/2001 15657 NCS Mortgage Lending Company NORCROSS GA R 05/05/2000 05/11/2001 05/11/2001 6018 Realty Mortgage Corporation JACKSON MS L 06/21/1993 05/18/2001 05/18/2001 13376 Ernest H. Abernethy, Jr. ATLANTA GA B 03/27/1998 05/18/2001 05/18/2001 12897 Buckhead Mortgage DECATUR GA B 10/03/1997 05/25/2001 05/25/2001 TOTAL: 27 B = BROKER L = LENDER R = REGISTRANT * Upgrade Broker to Lender + Downgrade Lender to Broker Return to Bulletins/Summaries Page Return to DBF Home Page 6