Monthly summary of mortgage activities, Dec. 2004

Monthly Summary of Mortgage Activities
Georgia Department of Banking and Finance
2990 Brandywine Road, Suite 200, Atlanta, GA 30341-5565
FOR THE PERIOD ENDING DECEMBER 2004
SUMMARY OF ACTIVITIES - MORTGAGE DIVISION
WEB SITE: www.state.ga.us/dbf
NEWS ITEMS
LEAD GENERATION COMPANIES - LICENSING REQUIREMENTS
There appears to be some misunderstanding in certain segments of the mortgage industry regarding lead generation and Georgia licensing requirements. The need for a Georgia mortgage license is predicated by the amount of information being obtained by any company or individual from a potential customer/consumer, not on the basis of whether there is a fee being paid or charged.
Even if a company is under a fee contract to generate leads for a licensee, that company cannot collect what would be considered sufficient data for verification of enough consumer information for the application process to begin without being licensed themselves, and any work performed on behalf of a licensee cannot be done on a "hit" or commission payment basis. Telemarketing/lead generation work must be paid for as a part of an overall contract on a set fee basis, not a commission basis. And the amount of information being gathered IS significant, as is whether a company is acting with or without a contract, contrary to what appears to be the current assumption by the industry. Payment for a lead is not the determining factor as to the license requirement - the information being requested is. Payment is significant when, as noted, it is not a fee for the telemarketing or lead service itself, but more of a service fee for what would appear to be brokering activity.
CO-BROKERING - LICENSING REQUIREMENTS
In addition to the trend noted above, it would appear that some non-licensed entities are offering licensees cobrokering arrangements. These companies, who may hold legitimate licenses in other states, offer Georgia licensees an opportunity to obtain Georgia property leads from their company. For providing such leads, the nonlicensee has obtained application information from the potential customer and then, for a fee based on aging of the potential account lead, will sell the lead to a Georgia licensee. It is important for all Georgia licensees to understand that if the selling company is not licensed in Georgia, that they are then working with an unlicensed company, and are therefore subjecting their license to administrative action, most likely revocation, for doing business with unlicensed entities.
Always check to make certain that the company you are doing business with is licensed to do residential mortgages in Georgia. Listings of licensees may be found at http://www.ganet.org/dbf/mortgage.html. It is also important to note that HUD has restrictions on co-brokering.
In addition to the situation above, it has also come to the attention of the Department that a Georgia licensee is advertising to brokers in other states, who are not licensed in Georgia, that the Georgia licensee will be happy to

close deals for them here in Georgia. They indicate that for a specific fee they will close the loan in their name, disclose the fees the out-of-state company would like to charge, and after the loan closes the out-of-state company will receive a check from the Georgia licensee, paying directly for all of the out-of-state company's charges. Again, this activity subjects the Georgia licensee to license revocation for doing business with unlicensed companies, and a Cease and Desist Order to those unlicensed entities in other states for them to cease doing business in Georgia without a license. Such activity could prevent them from obtaining a license in Georgia, should they desire to do so.
The reverse of this situation is also being noted. Georgia licensees are being encouraged to close loans in other states where they are not licensed by a licensee in that particular state. However, that out-of-state company is not licensed in Georgia. This particular guise is that the company indicates to potential co-brokers that they have a "national" charter, and as such this will allow "members" of their group to close loans in that state where they are not licensed to do originations. Loans will close in the name of the licensed out-of-state company, and redisclosure will have to be made.
None of the above situations are legal in Georgia. Doing business with unlicensed entities will subject your license to revocation, possible fines, and/or other administrative actions.
ONLINE LICENSE RENEWALS - FY 2006 - REMINDER The annual license renewal notices should be mailed out the first week in February. Remember that ALL licensees will be able to submit the application, the renewal fees, and any associated fines on line by means of ACH payments, and possibly by the alternative method of credit card payment. The actual renewal application WILL NOT be mailed with the notice. If you are unable to access the on-line renewal application, a paper copy of the appropriate application type will be available for download from the Department's website at http://www.ganet.org/dbf/mortgage_forms.html .
Your User ID and Password will be provided in your individual renewal notice. ALL licensees will access, update, and correct any errors in their specific license information, complete the Calendar Year 2004 operating information on the Renewal Schedules, and make fee and fine payments to complete the process and submit the renewal application, on-line. After review of submitted information, if there are any other qualifying issues or renewal requirements, such as an expired audit/bond, or any pending administrative actions which require the provision of documentation to the Department, the licensee will be notified of these requirements by e-mail or fax only.
It is important to remember that the additional information required must be provided before the renewal can be approved, therefore it is important to provide correct e-mail or fax numbers. Applicants who have no qualifying conditions to their renewal should receive no further notice from the Department after completion of the application until they receive their license.
Applicants who are unable to utilize the ACH payment method may still complete their application review and correction on-line, and then print the required identification pages of the application for hard copy submission to the Department, along with the check payment of required fees and any outstanding fines. You will be prompted regarding the payment method you wish to use. If there are any other outstanding issues, you will then be notified by e-mail or fax.
Updated or changed surety bonds and new audits must be submitted under separate cover to ensure that proper delivery of these items has been made.
IMPORTANT NOTE - Renewals are due by the close of business April 1, 2005. Renewals postmarked, stamped, received electronically or hand delivered after April 1, 2005 are considered late renewals and the licensee will be fined $300. For all licensees, whether submitting renewals on-line or by mail, all outstanding issues which exist or may arise prior to the license issue date, such as any new fines, fees, stale audits, complaint issues, etc. must be resolved before your renewal license will be granted. Licensees who do not complete the renewal process by

June 30, 2005, will have their licenses expire, and will have to cease operations. The on-line system will not be available after April 1, 2005.
Please contact the office at renewal@dbf.state.ga.us if you do not receive your renewal notification by February 18, 2005. If you have any problems accessing the on-line renewal system for your specific institution, please contact the Department at 770/986-1269 or at the e-mail address noted above.
The Department hopes that all licensees find the new on-line renewal processes beneficial, and licensees are encouraged to take advantage of this process, and we would like to thank you in advance for supporting the on-line automation efforts of the Department.
BROKER RENEWAL INFORMATION: NET WORTH RESTRICTIONS
The qualifying financial requirements for brokers changed with the July 2004 legislative changes. In order to meet the financial requirements, brokers must have in place a $50,000 surety bond or a letter of credit in the amount of $50,000 or the broker must meet the HUD requirements for an approved correspondent broker/lender status. This requires that the broker/processor meet the net worth requirements established by HUD. HUD renewal applicants must provide evidence of their HUD approval status, and provide a certified financial audit which meets the qualifying guidelines in GRMA. Non-HUD approved brokers/processors may not qualify for renewal using their net worth.
OTHER REGULATORY ISSUES & INFORMATION
APPARENT FRAUDULENT USE OF LICENSE
It has been brought to the attention of the Department that a company which is not licensed by the Department using the name Cambridge Financials, appears to be using the license number of a Georgia Residential Mortgage Licensee on its website. The licensee was made aware of this by another state regulatory agency where a similar fraudulent use of the company's license in that state was being committed. There is no direct contact information for Cambridge Financials on their website. This information is being provided to make you aware of what may be a new scheme to circumvent state licensing laws to the detriment of legitimately licensed companies.
$6.50 FEES
Annual loan closing fees ($6.50 "per loan" fees) for the reporting period July 1, 2004 to December 31, 2004 are due by March 1. Failure to report these fees and pay by the March 1st due date will result in the assessment of a $1,000 fine against those licensees who are subject to the fee as collecting agent (Please refer to O.C.G.A Section 7-11011 for additional information.). Please note that if you receive the form to report the fees you should return the form to the Department EVEN IF NO FEES ARE OWED. Failure to return the form will result in the assessment of fines for failure to pay.
Payments may be made on-line at https://bkgfin.dbf.state.ga.us/650Fees.html, or use the ON-LINE $6.50 FEE PAYMENT LINK off of the Mortgage Division's forms page at http://www.ganet.org/dbf/mortgage_forms.html.

VERIFYING LICENSED ENTITIES
Rule 80-11-4-.05 of the Mortgage Division Rules states, in part, that it is the licensee's responsibility to "know" that it is conducting business with a licensed entity.
You run the risk of conducting business with an unlicensed entity if you do not verify the license. The fine for "dealing with unlicensed persons" under Rule 80-11-3-.01 (4) is $1,000 per transaction and your license shall be subject to suspension or revocation. Anyone who purchases, sells, places for processing or transfers a mortgage loan or loan application to or from a person who is required to be licensed but is not properly licensed will be fined. You can check the license status of any licensee by going to the Department's web site at http://www.ganet.org/dbf/mortgage.html. From there you can check by entering the licensee's name, license number, or city, or leave the selection box blank and you will get a complete listing of licensees. There is also an option to download the entire list into an Excel spreadsheet.
CEASE AND DESIST ORDERS - Issued
Advent Mortgage, Inc., Atlanta, GA, (license no. 15251) - Cease and Desist Order issued December 2, 2004 became final on December 23, 2004.
Billups, Tawana, College Park, GA - Cease and Desist Order issued November 9, 2004 became final on December 10, 2004.
Brown, Corey, Atlanta, GA - Cease and Desist Order issued November 4, 2004 became final on December 5, 2004.
Burden, Lavonne, Atlanta, GA - Cease and Desist Order issued November 8, 2004 became final on December 9, 2004.
Clifton, Jan, Waycross, GA - Cease and Desist Order issued November 29, 2004 became final on December 30, 2004.
Cooper, Mary Jane, Lilburn, GA - Cease and Desist Order issued November 29, 2004 became final on December 30, 2004.
Jones, Bruno D., Calhoun, GA (license no. 16418) - Cease and Desist Order issued November 4, 2004 became final on December 4, 2004.
Joseph, Keith, Conyers, GA - Cease and Desist Order issued June 28, 2004 became final on October 22, 2004.
Strickland, John Jr., Riverdale, GA - Cease and Desist Order issued November 21, 2003 became final on December 30, 2004.
Tindley, Franchot A. (Tony), Winder, GA - Cease and Desist Order issued November 29, 2004 became final on December 30, 2004.
Total Mortgage Lending, Inc., Monroe, GA (license no. 11599) - Cease and Desist Order issued November 24, 2004 became final on December 29, 2004.
Williams, Elsie, Lilburn, GA - Cease and Desist Order issued November 29, 2004 became final on December 30, 2004.

CEASE AND DESIST ORDERS - Lifted
None
FINAL CONSENT ORDERS - Issued Stone Mountain Mortgage, Inc., Tucker, GA (license no. 5741) - Consent Order issued November 4, 2004 and became final November 4, 2004. Quigg, Charles E. "Chuck", Tucker, GA - Consent Order issued November 4, 2004 became final on November 4, 2004.

FINE PUBLICATION
Information regarding fines assessed against a specific licensee and against whom there are no pending administrative actions, is available on an individual licensee basis by submitting a written request to the following email address: dbfmort@dbf.state.ga.us

FINE REASON

1 Licensee fined for 1099 Employees

3 Licensees fined for GaFLA violations

5 Licensees fined for Prohibited Acts

13 Licensees fined for Loan Files not properly

6 Licensees fined for Advertising Violations

maintained

7 Licensees fined for Audit filed late

2 Licensees fined Check returned for Insufficient

4 Licensees fined for Background Check Violations

funds

14 Licensees fined for Books and Records

1 Licensee fined for doing business w/ unlicensed

1 Licensee fined for failure to submit to an Exam Entity

3

Licensees fined for Miscellaneous/Other

LICENSEES/REGISTRANTS REVOKED, EXPIRED, SUSPENDED, WITHDRAWN OR DENIED IN DECEMBER 2004

ID#
5959 11599 12203 13222 13590 13950 14985 15894 16418 17270

NAME
OFFICIAL MTG & INV, INC TOTAL MTG LENDING FULL SPECTRUM LENDING INC RESERVE MTG SVCS PROGRESSIVE HOME MTG UPSHAW FINL ASSOC LLC AMER MTG & FINL ASMURA CORP JONES, BRUNO D OLAFUYI, SABURI

CODE
BD BD RD LD BD BD BD BD BD BD

REVOKED
12/30/2004

EXPIRED
12/29/2004

SUSPENDED

12/16/2004

07/01/2004

12/04/2004

WITHDRAWN
12/15/2004 12/17/2004 12/28/2004 12/14/2004 12/29/2004 12/17/2004

DENIED

LICENSEES/REGISTRANTS REVOKED, EXPIRED, SUSPENDED, WITHDRAWN OR DENIED IN DECEMBER 2004

ID#
17319

NAME
SAVINGS MTG INC

CODE
LD

REVOKED

EXPIRED

SUSPENDED

WITHDRAWN
12/17/2004

DENIED

TOTAL: 11

LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN DECEMBER 2004

ID# COMPANY NAME

14427 15223 16520 19627 19671 19825 19826 19844 19877 19912 19938 19954 17894 19751 19804 19868 19892 19895 19914 19915 19917 19932 19937 19940 19963 19977 19017 19006 19815 19873 19965 19978 19979 17014 19779

Southlake Mortgage Corp * Mortgageworx Home Equity & Superior Lending, LLC * American Castle Development United Equity, LLC GRP Financial Services Corp. GRP Loan, LLC (DE) Residential Mortgage Corporation New Georgians Mortgage Joslyn Chae Jackson Upshaw Lending Professionals, 1st Pacific Mortgage, Inc. Clarence Johnson ACS Mortgage, Inc. Terry Renee Whitehead Omni Home Financing, Inc. Aspen Home Loans, LC United Security Financial, Inc. Affordable Mortgage, LLC Echelon Home Loans, Inc. Alpine Financial, Inc. Rachel Mae Davis Principle Resource Mortgage Juan Carlos Fraire Mae B. Bennett Net Funding, Inc. First Option Mortgage, LLC * LoanCare Servicing Ctr, Inc. # Kelvin Lewis Jewel Lloyd-Maldonado DTR Investments, Inc. Johnny Dean Croft Archstone Financial Mortgage, Total Mortgage Svcs, LLC * Academy Residential Mortgage,

CITY
MORROW MARIETTA ROSWELL DOUGLAS TOWSON WHITE PLAINS WHITE PLAINS LARGO ACWORTH SMYRNA ROSWELL TAMPA CORDELE FLOWERY BRANCH CALHOUN SAN CLEMENTE AMERICAN FORK MURRAY SAVANNAH ACWORTH ATLANTA TATE MARIETTA CALHOUN LITHONIA LILBURN ATLANTA NORFOLK WINDER STONE MOUNTAIN SNELLVILLE CARTERSVILLE DOUGLASVILLE MILFORD ALPHARETTA

ST MB CODE

GA L

GA B

GA L

GA B

MD L

NY L

NY L

MD B

GA B

GA B

GA B

FL

B

GA B

GA B

GA B

CA B

UT L

UT L

GA B

GA B

GA B

GA B

GA B

GA B

GA B

GA B

GA L

VA R

GA B

GA B

GA B

GA B

GA B

CT L

GA B

ORIGINAL APPROVAL
03/19/1999 12/10/1999 06/08/2001 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/05/2003 02/27/2004 12/17/2004 12/17/2004 12/17/2004 12/17/2004 12/17/2004 02/08/2002 12/24/2004

RENEWAL
12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/03/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/10/2004 12/17/2004 12/17/2004 12/17/2004 12/17/2004 12/17/2004 12/17/2004 12/17/2004 12/24/2004 12/24/2004

REINSTATED
12/03/2004

LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN DECEMBER 2004

ID# COMPANY NAME

CITY

19811 19823 19871 19941 19955 19957 19967 19968 19860 19861 19863 19949 19995 20029 15012
5849 14750

Resource Mortgage, Ltd. Resurgens Capital Mortgage, LLC Wells Fargo Financial Leasing, Centennial Mortgage Lenders, Cityside Mortgage Group, LLC MortgageEase.com, LLC Kathy Lee Bradley America's 1st Mortgage Services, Ronald G. Sprouse Eric Vinh Lu Stuart C. Pate Asheford Funding Group, LLC Primehomes Finance Corp. CTC Processing, LLC RBC Mortgage Company Goff/Coley Enterprises, Inc. Standard Mortgage Corporation (

TARRYTOWN ATLANTA DES MOINES ALPHARETTA MABLETON GERMANTOWN ADAIRSVILLE AUGUSTA MARIETTA DULUTH SYLVESTER ATLANTA LAWRENCEVILLE TYRONE HOUSTON ATLANTA NEW ORLEANS

ST MB CODE

NY L

GA B

IA

R

GA B

GA B MD B GA B GA L

GA B GA B GA B GA B GA B

GA B TX R GA B LA L

ORIGINAL APPROVAL
12/24/2004 12/24/2004 12/24/2004 12/24/2004 12/24/2004 12/24/2004 12/24/2004 12/24/2004 12/31/2004 12/31/2004 12/31/2004 12/31/2004 12/31/2004 12/31/2004 10/01/1999 06/22/1993 07/02/1999

RENEWAL
12/24/2004 12/24/2004 12/24/2004 12/24/2004 12/24/2004 12/24/2004 12/24/2004 12/24/2004 12/31/2004 12/31/2004 12/31/2004 12/31/2004 12/31/2004 12/31/2004 12/03/2004 12/17/2004 12/17/2004

REINSTATED
12/03/2004 12/17/2004 12/17/2004

TOTAL: 52

B = BROKER L = LENDER R = REGISTRANT

* Upgrade Broker to Lender + Downgrade Lender to Broker # Upgrade Lender to Registrant Downgrade Registrant to