Monthly Summary of Mortgage Activities Georgia Department of Banking and Finance 2990 Brandywine Road, Suite 200, Atlanta, GA 30341-5565 AUGUST 2001 SUMMARY OF ACTIVITIES - MORTGAGE DIVISION Please review the enclosed list for details on licensee additions and deletions which occurred during August. The Mortgage Division received 36 applications for a new license or registration and 14 applications for reinstatement of previously revoked or withdrawn license. Nine licenses were either revoked or withdrawn during August. There were 2,522 current licensees/registrants as of August 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 August, four regular mortgage broker/lender examinations were performed by the Mortgage Division examination team. Also, the Mortgage Division received 2,735 mortgage related telephone calls. Of these calls, 507 were verbal consumer inquiries; and 202 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 were 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 were mailed a "per loan" fee reporting form. 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. 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 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. 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: COUNTERFEIT LICENSE WARNING: Examples of counterfeit 2002 licenses continue have been sent to this office. For example, there is a counterfeit license for #7465, Southeast Factory Direct, Box 735 Old Zebulon Road, Zebulon, GA 30295, being circulated by an unlicensed individual. This license was revoked on 11-20-2000. Licensed brokers and lenders are reminded that fines will be issued for dealing with unlicensed brokers. All lenders are advised to call to confirm the license status of each broker with which they do business. Brokers must be aware that it is not legal to co-broker with unlicensed parties. See Rule 80-11-3 for a listing of the fines which will be imposed. 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. CEASE AND DESIST ORDERS ISSUED - July Southeast Factory Direct, Zebulon, GA- Cease and Desist Order issued 07-31-01, and became final 08-20-01. MEMORANDUM OF UNDERSTANDING On August 23, 2001, the Department entered into a Memorandum of Understanding (MOU) with Allstate Home Improvement (Allstate) , J.V. Cheek, Jr. (Cheek) , and Johnny Hughes (Hughes). The primary provisions of that memorandum included a prohibition for Hughes to be involved in any way in the mortgage business, including but not limited to signing checks, performing any loan function, loan processing, or even discussing the mortgage loan business. Allstate and Cheek agree to perform criminal background checks on all current and future employees. Allstate and Cheek also agree to correct all criticisms contained in the June 25, 2001 Report of Examination issued by the Department, and to establish and implement policies, procedures, and practices which will ensure that the books and records are properly maintained. THE IMPORTANCE OF CONDUCTING EMPLOYEE BACKGROUND CHECKS. Individuals and companies which operate as mortgage licensees in the State of Georgia each sign an oath which, among other things, provides a pledge that they will not hire felons who have not received a pardon from the Board of pardons and paroles. All too often, in the course of conducting mortgage examinations, our examiners discover individuals are working in the industry who have criminal background problems. When our examiners discover this situation fines may be imposed, and the license is subject to revocation. Cease and Desist orders may also be issued against the parties involved. If you or your company is a Georgia Mortgage licensee, it is your responsibility to screen all potential employees, to include having criminal background checks performed. You may do this with the permission of the applicant. The employment of any applicant who does not permit a background check could potentially jeopardize your license (for violation of your oath) and/or result in significant fines. For your own protection, it is also suggested that you perform background checks on all employees who did not receive such a review when employed. The "I did not know" excuse is not acceptable to this Department. As professionals operating in the mortgage industry, it is your responsibility to take whatever steps are necessary to "know your employees". Please keep in mind that we also receive "tips" from your competition regarding illegal practices. Consumer complaints also provide a wealth of information regarding the activities of those who are not content to operate within the law. Note: As of July 1, 2000 the Georgia Law has been changed to allow for the Georgia Crime Information Center to disseminate electronically criminal history records of in-state felony convictions, pleas, sentences to private persons, businesses, public agencies, and political subdivisions upon request without fingerprint comparison or consent of the person whose records are requested. LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN AUGUST 2001 ID# COMPANY NAME 16630 16575 16642 16647 16648 16655 16665 16670 16682 16686 16687 16592 16602 16646 16660 16680 16692 16443 16562 16623 16624 16664 16684 16693 16696 16707 5929 12203 15556 15783 16207 16628 16652 16681 Homesouth Mortgage Services, C & S Mortgage Services, Inc. James I. York William Denman Goodwin Cando Funds, Inc. Sandra Chestnut Carter Brian Sean Coughlin Westfield Mortgage & Financial Shirley A. Williams All Access Mortgage Corporation Freddie M. Edenfield American Summit Lending Liberty Mortgage, Inc Reliance Financial Service, Inc. American Liberty Mortgage, Inc. HomeSense Financial, Inc Thomas S. Hogan II HomeOne Credit Corp. Greater Potomac Mortgage Pioneer Retail Corporation Crossroads Mortgage, Inc. Best Mortgage and Financial Kellner Mortgage Investments, QC Mortgage Services, Inc. Southland Funding Corporation Alegis Group Loan Servicing, LLC Countrywide Home Loans, Inc. # Full Spectrum Lending, Inc. # CWABS, Inc. # CWMBS, Inc. # Countrywide Hm Loans Svcing # Key West Funding Corporation Mortgage Services U.S.A. Inc. Matrix Investment Corporation CITY ST MB ORIGINAL RENEWAL CODE APPROVAL BIRMINGHAM AL L 08/10/2001 08/10/2000 MARIETTA GA B 08/03/2001 08/03/2001 DECATUR GA B 08/03/2001 08/03/2001 LAWRENCEVILLE GA B 08/03/2001 08/03/2001 STONE MOUNTAIN GA B 08/03/2001 08/03/2001 WARNER ROBINS GA B 08/03/2001 08/03/2001 SNELLVILLE GA B 08/03/2001 08/03/2001 MOULTRIE GA B 08/03/2001 08/03/2001 EAST RIDGE TN B 08/03/2001 08/03/2001 ATLANTA GA B 08/03/2001 08/03/2001 MORROW GA B 08/03/2001 08/03/2001 EDEN PRAIRIE MN L 08/10/2001 08/10/2001 JACKSONVILLE FL B 08/10/2001 08/10/2001 DULUTH GA B 08/10/2001 08/10/2001 SUWANEE GA B 08/10/2001 08/10/2001 DOUGLAS GA B 08/10/2001 08/10/2001 ATLANTA GA B 08/10/2001 08/10/2001 HOUSTON TX L 08/17/2001 08/17/2001 VIRGINIA BEACH VA L 08/17/2001 08/17/2001 JACKSONVILLE FL B 08/17/2001 08/17/2001 MEMPHIS TN L 08/17/2001 08/17/2001 OAK BROOK IL L 08/17/2001 08/17/2001 CARROLLTON GA L 08/17/2001 08/17/2001 ELLENWOOD GA B 08/17/2001 08/17/2001 SUWANEE GA B 08/17/2001 08/17/2001 GREENVILLE SC L 08/17/2001 08/17/2001 CALABASAS CA R 06/28/1993 08/24/2001 CALABASAS CA R 02/07/1997 08/24/2001 CALABASAS CA R 06/16/2000 08/24/2001 CALABASAS CA R 06/23/2000 08/24/2001 CALABASAS CA R 12/15/2000 08/24/2001 ATLANTA GA B 08/24/2001 08/24/2001 DANIA BEACH FL L 08/24/2001 08/24/2001 GROTON CT L 08/24/2001 08/24/2001 REINSTATED LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN AUGUST 2001 ID# COMPANY NAME 16683 16704 16705 16720 16721 16723 16703 16712 16714 16724 16726 16728 13427 13120 7430 11764 12447 13817 5754 12341 13150 13870 14020 12181 Southeastern Renovations, Inc. American Home Loan Corp. Jackie Fay Hegwood Melanie Sue Windau Felecia Kornegay Roderick Anthony Stovall, Jr. First Rate Mortgage Group, Inc. Derek Staden Southern Financial Resource Trina Shanine' Alston GK Capital, LLC Thomas Burkett A-One Home Loans, Inc. Carlton C. Jones Roy A. Gisondo Citizens Trust Bank Mortgage Loan Store, Inc. (The) United California Systems Tamara Smith-Hicks Yancena Perry American Siding & Window C&S Mortgage Co., Inc. Bridge Mortgage Bank of America, Evaline Nguyen CITY ST MB CODE WOODSTOCK GA B SUWANEE GA B TRENTON GA B CARTERSVILLE GA B ATLANTA GA B ATLANTA GA B HOLLYWOOD FL L SNELLVILLE GA B CONYERS GA B LITHONIA GA B ATLANTA GA B MARIETTA GA B AUGUSTA GA B ATLANTA GA B ATLANTA GA B DECATUR GA R ST LOUIS MO L LOS ANGELES CA L COLUMBUS GA B STONE MOUNTAIN GA B SAVANNAH GA B LILBURN GA B NORTH MIAMI FL L SUWANEE GA B ORIGINAL APPROVAL 08/24/2001 08/24/2001 08/24/2001 08/24/2001 08/24/2001 08/24/2001 08/31/2001 08/31/2001 08/31/2001 08/31/2001 08/31/2001 08/31/2001 04/17/1998 02/06/1998 10/27/1995 07/19/1996 05/09/1997 08/21/1998 06/04/1993 03/28/1997 01/30/1998 08/28/1998 11/06/1998 01/24/1997 RENEWAL 08/24/2001 08/24/2001 08/24/2001 08/24/2001 08/24/2001 08/24/2001 08/31/2001 08/31/2001 08/31/2001 08/31/2001 08/31/2001 08/31/2001 08/03/2001 08/10/2001 08/17/2001 08/17/2001 08/17/2001 08/17/2001 08/24/2001 08/24/2001 08/24/2001 08/24/2001 08/24/2001 08/31/2001 REINSTATED 08/03/2001 08/10/2001 08/17/2001 08/17/2001 08/17/2001 08/17/2001 08/24/2001 08/24/2001 08/24/2001 08/24/2001 08/24/2001 08/31/2001 TOTAL: 58 B = BROKER L = LENDER R = REGISTRANT + Downgrade Lender to Broker * Upgrade Broker to Lender # Upgrade Lender to Registrant FINES ASSESSED IN AUGUST 2001 ID# ISSUE DATE FINE FINE REASON PAID DATE COMPANY NAME CITY ST 5959 08/14/2001 B&R $500. 09/10/2001 Official Mortgage & Investments, Inc. Riverdale GA 5959 08/14/2001 FILE $2500. 09/10/2001 Official Mortgage & Investments, Inc. Riverdale GA 7101 08/15/2001 OTH $250. 08/30/2001 Aegis Mortgage Corporation Houston TX 11734 08/15/2001 REL $250. 09/06/2001 Origen Financial, Inc. Glen Allen VA 13622 08/02/2001 FILE $3000. New Start Mortgage, Inc. Macon GA 13622 08/02/2001 UL $3000. New Start Mortgage, Inc. Macon GA 13622 08/02/2001 OTH $1,000 New Start Mortgage, Inc. Macon GA 13622 08/02/2001 B&R $500. New Start Mortgage, Inc. Macon GA 13870 08/01/2001 REL $250. C&S Mortgage Co., Inc. Lilburn GA 14413 08/01/2001 REL $250. Eugene Fuller Atlanta GA 15618 08/14/2001 B&R $500. 09/10/2001 North Point Federated Mortgage, Inc. Cummings GA FINES ASSESSED IN AUGUST 2001 ID# ISSUE DATE FINE FINE REASON PAID DATE COMPANY NAME CITY ST 15644 08/16/2001 1099 $2000. 09/12/2001 Boardwalk Mortgage, Inc. Atlanta GA 15644 08/16/2001 B&R $500. 09/12/2001 Boardwalk Mortgage, Inc. Atlanta GA 15644 08/16/2001 FILE $500. 09/12/2001 Boardwalk Mortgage, Inc. Atlanta GA 15647 08/03/2001 B&R $500. 08/31/2001 Lotus Financial Services, Inc. Cumming GA 16283 08/29/2001 UL $1,000 Prodigy Mortgage, Inc. Marietta GA 1099 B&R BR CD CIC EMP FEE FEL FINE REASON 1099 employees Books & records Unapproved branch Violation of Cease & Desist Order Acq. of 25% ownership without approval Employer under C&D or revocation $6.50 fees not paid Employment of a felon FILE LAR NSF REL REN UL OTH 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 LICENSEES/REGISTRANTS REVOKED, EXPIRED, SUSPENDED, WITHDRAWN OR DENIED IN AUGUST 2001 ID# 5922 7355 11419 11960 15157 15375 15437 15781 16016 16116 16305 16430 16598 16614 NAME COMMERCE EQUITY MTG SOUTH ATLANTIC APEX MTG CO APPLE VALLEY HOMES INC PRIME SOURCE MTG INC MTG GRP INC FAMILY MTG CO, INC. AMERICAN FINL COLONNADE FINL LLC APPROVED FIN GRP INC ARTISAN MTG GRP INC FUNDING OF OUR RICHARDS MTG SVCING INC UNIVERSAL MORTGAGE CODE BD BD BD BD BD LD BD LD LD BD BD LD LD LD REVOKED 08/13/2001 08/16/2001 EXPIRED SUSPENDED 08/31/200 WITHDRAWN DENIED 08/01/2001 08/28/2001 08/17/2001 08/28/2001 08/16/2001 11/20/2000 08/06/2001 08/29/2001 08/03/2001 08/31/2001 08/17/2001 TOTAL: 14