Monthly Summary of Mortgage Activities Georgia Department of Banking and Finance 2990 Brandywine Road, Suite 200, Atlanta, GA 30341-5565 SEPTEMBER 2001 SUMMARY OF ACTIVITIES - MORTGAGE DIVISION Please review the enclosed list for details on licensee additions and deletions which occurred during September. The Mortgage Division received 45 applications for a new license or registration and 7 applications for reinstatement of previously revoked, expired or withdrawn license. Six licenses were either revoked or withdrawn during September. There were 2,562 current licensees/registrants as of September 30, 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 September, nine regular mortgage broker/lender examinations were performed by the Mortgage Division examination team. Also, the Mortgage Division received 2,128 mortgage related telephone calls. Of these calls, 392 were verbal consumer inquiries; and 170 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 1 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. ANOTHER: COUNTERFEIT LICENSE WARNING: Examples of counterfeit licenses are continuing to be received by our office. For example, there is a 2001 counterfeit license for #14398, American First Mortgage, LLC dba Alcredit Mortgage, 102 LaFayette Square, Suite 204, LaFayette, GA 30728, being circulated by an unlicensed individual. Remember- The Department never formally issued a license for the calendar year 2001. This license has never been issued with this dba name. For information purposes, please note that Steve Collins is listed as the agent for service for (unlicensed) Alcredit Mortgage, LLC. 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 November of 2001. Occasionally, the Department receives request from licensees wanting confirmation on their address changes, closing of an office, and etc. The Department does not mail written confirmation of this. However, the licensee may submit a letter to acknowledge the Department received the changes along with an enclosed self address envelope. Meeting Education and Experience Requirements EXAMINER RECOMMENDATIONS: Occasionally members of our examination team make recommendations for reminders to be included in our monthly newsletter. The following comments are the result of those recommendations: While performing their prescribed duties, it is becoming more common for our examiners to encounter circumstances which require that they issue fines for violations of the Georgia Residential Mortgage Act (GRMA), and the Regulations issued by this Department. Payment of these fines is usually an unpleasant experience for our licensees. See Rule 80-11-3-.01. On July 1, 2000, GRMA was amended to allow only properly trained or educated individuals to be granted a mortgage broker's license in Georgia. Meeting these qualifications provides our licensees with the opportunity to conduct business as professionals and to demonstrate that they are knowledgeable of the laws which regulate the industry in which they operate. Consequently, our examiners now expect a much higher level of compliance with these laws and regulations from those companies and individuals that currently hold a mortgage license. Please avoid these fines by becoming more familiar with GRMA and the rules issued by this Department. Please be reminded that all MANUFACTURED HOME DEALERS and HOME IMPROVEMENT COMPANIES that are required to be licensed by this Department must provide all residential mortgage loan applicants with a Good Faith Estimate (GFE) as prescribed by Rule 80-11-1-.01 issued by the Department. Failure to maintain on file the 2 required GFE's can result in significant fines levied by the Department. Under normal circumstances it is the practice of our examiners to provide advance notice to licensees prior to the commencement of an examination. Please be aware that there is no legal requirement for our examiners to provide such notice. On occasion, such prior notice will not be granted. Failure to submit to the examination process could result in the revocation of the license. 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 REVOKED, EXPIRED, SUSPENDED, WITHDRAWN OR DENIED IN SEPTEMBER 2001 ID# 7063 15264 16094 16116 16283 NAME PHOENIX MTG SVCS INC REGENCY FINL FUNDING INC COUNTRYSIDE LEND TEXAS APPROVED FIN GRP INC PRODIGY MTG INC CODE BD BD BD BD BD REVOKED 09/17/2001 09/19/2001 09/01/2001 EXPIRED SUSPENDED WITHDRAWN DENIED 09/13/2001 09/25/2001 TOTAL: 5 3 FINES ASSESSED IN SEPTEMBER 2001 ID# ISSUE DATE FINE FINE REASON PAID DATE COMPANY NAME CITY ST 12115 09/26/2001 FILE $2000. National Business Contractors Inc. Woodstock GA 12115 09/26/2001 B&R $500. National Business Contractors Inc. Woodstock GA 12115 09/26/2001 B&R $500. National Business Contractors Inc. Woodstock GA 12778 09/17/2001 NSF $350. Pacific Guarantee Mortgage Point Richmond CA 12778 09/17/2001 OTH $25. Pacific Guarantee Mortgage Point Richmond CA 14501 09/27/2001 UL $1000. Southeast Home Funding, Inc. Marietta GA 14501 09/27/2001 B&R $500. Southeast Home Funding, Inc. Marietta GA 14501 09/27/2001 B&R $500. Southeast Home Funding, Inc. Marietta GA 14501 09/27/2001 BR $250. Southeast Home Funding, Inc. Marietta GA 16059 09/21/2001 AUD $1000. First Start Mortgage Corporation Atlanta 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 APPROVED OR REINSTATED IN SEPTEMBER 2001 ID# COMPANY NAME CITY ST MB ORIGINAL RENEWAL REINSTATED CODE APPROVAL 6836 Loans by Summerville, Inc. * AUGUSTA GA L 03/18/1994 09/07/2001 16515 Infinity Financial Network BELLEVUE WA L 09/07/2001 09/07/2001 16685 Amerix Mortgage Corporation COLUMBIA MD B 09/07/2001 09/07/2001 16711 America's Mortgage Center, Inc. BELLEVUE WA B 09/07/2001 09/07/2001 16733 Partner Financing Solutions, Inc. DULUTH GA B 09/07/2001 09/07/2001 16740 Wilfred Holmes MARIETTA GA B 09/07/2001 09/07/2001 16753 Old Capitol Mortgage, Inc. MILLEDGEVILLE GA B 09/07/2001 09/07/2001 16719 Pharis Daniel Bennett REIDSVILLE GA B 09/14/2001 09/14/2001 16727 Randall Schlanger MARIETTA 16730 Town & Country Mortgage Brokers, Inc. BOGART GA B GA B 09/14/2001 09/14/2001 09/14/2001 09/14/2001 16742 Rainbow Mortgage Corporation LAWRENCEVILLE GA B 09/14/2001 09/14/2001 16744 New Age Financial Services, Inc. ATLANTA GA B 09/14/2001 09/14/2001 16757 Barvia Lee Harris ATLANTA GA B 09/14/2001 09/14/2001 16763 Mountain Home Mortgage, Inc. BLAIRSVILLE GA B 09/14/2001 09/14/2001 16765 Jo Ann D. Motte CHATSWORTH GA B 09/14/2001 09/14/2001 16767 Edwin H. Taylor ATLANTA GA B 09/14/2001 09/14/2001 12746 Ocean West Enterprises, Inc. * TUSTIN CA L 08/08/1997 09/21/2001 16770 Lions Share Financial Corporation NORCROSS GA B 09/21/2001 09/21/2001 16771 Legendary Lending Inc. LITHONIA GA B 09/21/2001 09/21/2001 4 LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN SEPTEMBER 2001 ID# COMPANY NAME 16786 16787 16796 16801 16802 16803 16810 16811 16812 16818 16819 16667 16715 16762 16768 16773 16777 16778 16817 5815 15600 15602 12574 15708 7329 7387 13653 14237 Lance Dustin Newsome Richard Taylor Forbus Kevin Maurice Edwards Gordon Todd Phillips Brian Vincent Lane Evan Albert Welting Danielle Lula Robinson David Rieder Ruth A. W. Carpenter Judy Lynn Bowman James L. Gunby Jane E. Brown Inc. Classic Lending, LLC First Financial Mortgage Group, Inc. Addie Sullivan Marcus Leonard Jobest Mortgage Company, LLC Nomura Credit & Capital, Inc. Greenpoint Investment Funding, LLC Greentree Mortgage Company, L.P. America's Mortgage Broker, LLC American Pioneer Financial Services, Li Z. Wen Senior Homeowners Financial Greeson Homes Corp. CMH Homes, Inc. Vintage Mortgage Corporation 1st Continental Mortgage, Inc. CITY ST MB ORIGINAL RENEWAL REINSTATED CODE APPROVAL MCDONOUGH GA B 09/21/2001 09/21/2001 SNELLVILLE GA B 09/21/2001 09/21/2001 ATLANTA GA B 09/21/2001 09/21/2001 STOCKBRIDGE GA B 09/21/2001 09/21/2001 MCDONOUGH GA B 09/21/2001 09/21/2001 DULUTH GA B 09/21/2001 09/21/2001 LAWRENCEVILLE GA B 09/21/2001 09/21/2001 MCDONOUGH GA B 09/21/2001 09/21/2001 COLUMBUS GA B 09/21/2001 09/21/2001 STOCKBRIDGE GA B 09/21/2001 09/21/2001 AUGUSTA GA B 09/21/2001 09/21/2001 SAN FRANCISCO CA B 09/28/2001 09/28/2001 MARIETTA GA B 09/28/2001 09/28/2001 TAMARAC FL L 09/28/2001 09/28/2001 HAZLEHURST GA B 09/28/2001 09/28/2001 ATLANTA GA B 09/28/2001 09/28/2001 MACON GA B 09/28/2001 09/28/2001 NEW YORK NY L 09/28/2001 09/28/2001 GAINESVILLE GA L 09/28/2001 09/28/2001 MARLTON NJ L 06/22/1993 09/07/2001 09/07/2001 TAMPA FL L 04/21/2000 09/07/2001 09/07/2001 OREM UT L 04/28/2000 09/07/2001 09/07/2001 DULUTH GA B 06/13/1997 09/21/2001 09/21/2001 FT. LAUDERDALE FL L 07/07/2000 09/21/2001 09/21/2001 WINDER GA B 11/03/1995 09/28/2001 09/28/2001 MARYVILLE TN B 12/29/1995 09/28/2001 09/28/2001 VOORHEES NJ L 06/12/1998 09/28/2001 09/28/2001 WOODBRIDGE VA B 01/15/1999 09/28/2001 09/28/2001 TOTAL: 47 B = BROKER L = LENDER R = REGISTRANT + Downgrade Lender to Broker * Upgrade Broker to Lender 5