Inside this Issue 2 NEWS Commissioner's Priority List 2 Department Reorganization 2 Outstanding Orders: How They Work 4 OTHER ITEMS FY 2007 ON-LINE License Renewal 5 $6.50 "Per Loan" Fees Due 5 More on "Net" Branches 6 Administrative Actions & Issues 9 2006 State Holidays Check for Web Outstanding C&D and Consent Orders 2990 Brandywine Road Suite 200 Atlanta, GA 30341 Phone: (770) 986-1269 Fax: (770) 986-1029 Monthly Summary of Mortgage Activities Georgia Department of Banking & Finance FOR THE PERIOD ENDING December 2005 SUMMARY OF ACTIVITIES MORTGAGE DIVISION WEB SITE: www.state.ga.us/dbf STAFF: www.state.ga.us/dbf/staff.html . . . . . . . . . . . . . . . . . . . News Items COMMISSIONER BRASWELL'S THREE INITIAL PRIORITIES Commissioner Braswell has indicated the following priorities for the Department: The initial priority is addressing Department staffing issues caused by retirements, promotions, and reorganization. As a second priority, the Commissioner will be getting acquainted or reacquainted with the leadership of the bank and credit union associations and their members. The third initial, and crucial priority will be to increase lenders' awareness of their roles and responsibilities in preventing mortgage fraud. REORGANIZATION PLANS: PROMOTING EFFECTIVENESS AND EFFICIENCY The Department has made several changes in its organization to ensure maximization of resources while remaining as effective and efficient as possible. With those goals in mind, the following changes took place effective January 1, 2006: Corporate Division Functions: The Corporate Division is no longer a separate division. The Corporate Division's primary responsibilities concerned the processing of applications and registrations for all supervised entities with the exception of mortgage licensees. The division also handled supervisory functions for Money Service Businesses. The financial institutions (bank, CU, etc.) application and regulatory related functions now fall under the Supervision Division. With this structural change, Corporate Manager Murali Ramachandran reports directly to Director for Supervision Bob Rosentreter. Mortgage Division & Money Service Businesses (MSBs): The Money Services Businesses (MSBs) functions of the Corporate Division, which include licensing, registration, and regulation functions, now fall under the Mortgage Division. The Mortgage Division's name, changed to reflect these new functions, is now the Non-Depository Financial Institutions Division. Supervisory Manager for MSBs, Joel Byers, is responsible for the licensing and regulation of MSBs. Administrative Examiner Tervenia Mitchiner, whose primary responsibilities concern money transmitters and sale of check licensees, and Applications Analyst Susan Nelson, whose primary responsibilities concern check cashing licensees, assist Joel with these MSB functions. Joel's direct supervisor is now Director for Mortgage Licensing Melinda Kinard. Melinda's title has been changed to Director of Money Service Businesses and Mortgage Licensing. Rod Carnes' new title is Deputy Commissioner for Non- Depository Institutions. Financial Other Changes: With the above changes, Carol Webb, formerly Director of Corporate Affairs and Strategic Initiatives, is now Director of Communications and Planning, and this area of responsibility includes website responsibility, e-commerce initiatives, external publications, the emergency preparedness program, strategic and business planning coordination, and handling other initiatives of the Department. Senior Deputy Commissioner George Reynolds remains Carol's direct supervisor. Other Divisions or Functions Effected: Administrative Assistant Susan Brown is now Administrative Assistant to the Commissioner and Senior Deputy Commissioner, and she also provides secondary support to the Legal and Consumer Affairs Division (LCA). With these changes, two positions (Supervisory Manager for Mortgage Licensing and Executive Assistant) have been eliminated. The duties of these two positions are being absorbed by existing personnel. OUTSTANDING ORDERS: CEASE & DESIST VS CONSENT ORDERS & REVOCATIONS There continues to be some confusion regarding the impact administrative actions have on licensees, and against those who are not licensed. 2 . . . . . . . . . . . . . . . . . . . .. Licensees must check the Department's website to ensure their potential employees do not have an outstanding Cease & Desist or Consent Order issued by the Department, as well as determine if any broker or lender you conduct business with is not prevented from doing business in the state, be it by failure to obtain a license, or sanctions issued against the license, such as a revocation. A major point of confusion hinges on the fact that the Department cannot issue a revocation against a company or person for doing mortgage business if they have been operating without the required license. Therefore, in order to sanction those individuals or companies, a Cease and Desist Order (C&D) is issued ("Cease this unlicensed activity".) In addition to companies or independent individuals working in the industry who fail to get the required license, persons issued a C&D may also include employees of licensees who may have, for example, been paid on a 1099 basis or who may have been working for two companies at the same time. Cease and Desist Orders issued against any of the aforementioned entities prevent them from working in the industry in Georgia, by either obtaining their own license or working for a licensee, for a period of three years, commencing from the date the order became final. By contrast, licensees against whom a Cease and Desist Order has been issued are usually able to continue operating in the industry, as these orders are generally issued to effect changes in business practices in lieu of license revocation. An exception to this general rule would be C&D issued for failure to meet financial standards for licensing. Failure to meet the standard results in expiration of a license if not corrected. Once final, the license is shown as "Expired", not "Revoked". Often employees of licensees, or the companies themselves, are issued Consent Orders, similar in purpose to a Cease and Desist Order against a licensee. However, these have specific terms and conditions which must be met by the person receiving the Order, and often the terms may be such that a person may not work in the industry for a specified period of time, may work but may not hold specific positions, etc. Licensees should check for outstanding Orders on the web at: http://www.state.ga.us/dbf/cdorde rs.html Note in the screen below: LICENSEE with C&D May or may not show INACTIVE STATUS If no other action prevents them from working in the industry, then there is NO INFORMATION in the INACTIVE STATUS box. A LICENSEE whose license has been revoked will have that information noted under INACTIVE STATUS note the C&D and Revocation on the screen. NOT LICENSED shows up next to those who were never licensed and issued a C&D. No notation under INACTIVE STATUS as they were/are NOT LICENSED. You need to be aware that if a prospective employee has an outstanding Consent Order, you should request a copy from the Department to determine the restrictions that are in place on that employee or potential employee regarding working in the industry in Georgia. 3 . . . . . . . . . . . . . . . . . . . .. Other Items ON-LINE LICENSE RENEWALS: FY2007 As noted last month, the annual license renewal notices should be mailed out the first half of February, 2006. ON-LINE ONLY!! Hardcopy renewal application forms WILL NOT be mailed with the notice. All renewals will be made electronically via the on-line system. Should your computer access be limited, local libraries provide free access to the Internet. In the event you are absolutely unable to access the on-line renewal application, you should contact the Department. HOW TO FILE The on-line website is secure and requires a USER ID and PASSWORD for access. See table information below. System access will be available on the Department's website after the renewal notices have been mailed. A RENEWAL link will also be available from the main mortgage forms page at http://www.ganet.org/dbf/mortgag e_forms.html. ALL licensees will be responsible for the following on-line: Updating detailed license information & correction of any errors in their specific information; Completing the Calendar Year 2005 operating information on the 2005 Reporting Schedules, and making fee and fine payments and attesting to the renewal information on-line. The Department, after review of submitted information, will contact the licensee if any qualifying issues or unmet renewal requirements remain, such as an expired bond, outstanding unpaid judgments, or any pending administrative actions which require the provision of documentation to the Department. Notification of these requirements will be by e-mail or fax only. Remember, such 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. To reiterate: NO hardcopy applications will be accepted. Payment must be made by ACH draft or credit card. Notification by e-mail or fax ONLY if there are outstanding issues FINANCIAL REQUIRMENTSSURETY BONDS or LOCs Only SURETY BONDS or Letters of Credit (LOC) will qualify a licensee for the financial requirements for renewal. The original bond/LOC must be on file with the Department. If you have been using your net worth / audited financial statements and have not submitted your bond or LOC to the Department, OR there has been a change in your existing bond requiring submission of a new bond or rider, those bond/riders must be submitted separately to complete your renewal. ONLY Updated or changed surety bond/LOCs must be submitted, under separate ON-LINE ACCESS: https://bkgfin.dbf.state.ga.us/MortgageDocs/FY2007Renewal.html User ID Password License Number SSN or EIN 4 . . . . . . . . . . . . . . . . . . . .. cover, in order to complete a renewal. Those who have been using a surety bond or LOC that is still in place with no changes DO NOT need to submit a bond or rider with their renewal. AUDITS may no longer be used to qualify for licensing, and a surety bond or qualifying letter of credit WILL BE REQUIRED for renewal! DO NOT submit your audited financials to the department! If your company is one of those still using an audit and the Department doesn't have your surety bond or irrevocable letter of credit in the appropriate amount ($50,000 - Broker, $150,000 Lender) and on the Department's form prior to renewal, the license will not be renewed. Once the license or registration expires, the licensee or registrant may be required to file an application for REINSTATEMENT, a process that could take eight weeks or more to complete. LATE FILINGS Renewals are due by the close of business April 1, 2006. Renewals will continue online after April 1, 2006, but note that these are considered LATE renewals, and the late renewal fine of $300 will be automatically added to your renewal fee. The fine, along with any other outstanding fine, must be paid in order to renew your license. OUTSTANDING ISSUES All outstanding issues which exist or may arise prior to the license issue date (July 1, 2006), such as any new fines, fees, complaint issues, etc. arising after completing your renewal schedules on-line, must be resolved before your renewal license will be granted. Licensees who do not resolve these issues in order to complete the renewal process by June 30, 2006 date will have their licenses expire, and will have to cease operations. Failure to properly RENEW a license will require a REINSTATEMENT of the license in order to conduct mortgage business. CE's-BROKERS Continuing Education requirements begin with the FY 2008 renewal, not FY2007. Credits must be earned 1-1- 2006 to 3-31-2007 for the FY 2008 renewal. QUESTIONS You may contact the office at Renewals if you have any renewal questions. If for some reason you do not receive your renewal notice, the online system will allow you to apply for renewal if you are the appropriate person with the proper user ID and access code. $6.50" PER LOAN" FEE DUE $6.50 "per loan" fees for the second half of 2005 (July 1 through December 31, 2005) are now due. Payments must be received by the due date of March 1, 2006. Failure to pay fees owed by the due date can result in a fine of $1,000. Please make these payments via ACH or credit card on line at the following web-site: https://bkgfin.dbf.state.ga.us/ GRMAFee.html Should you decide to pay by check, please complete the form on-line, print a copy and send it in with your check payment. And...Another Word About NET BRANCHES The Department does not allow entities licensed under the Georgia Residential Mortgage Act to operate net branches in Georgia. However, the Department recognizes that many licensees operate in multiple states and that some other states do allow net branches. Consequently, simply because a licensee's web site promotes a branching scheme that is not legal in Georgia, the Department does not take that to necessarily mean the licensee is operating an illegal net branch or net branches in Georgia. However, those licensees found to be operating net branches in Georgia typically are fined and administrative actions taken against the licensee and any branch manager involved. 5 . . . . . . . . . . . . . . . . . . . .. Administrative Actions and Issues CEASE AND DESIST ORDERS Issued Collier, Milton dba National Association of Investors and Mortgage Co., Atlanta, GA Cease and Desist Order issued October 31, 2005 became final on December 1, 2005. Franklin Mortgage Corporation, Stone Mountain, GA (license no. 19570) Cease and Desist Order issued December 8, 2005 became final on December 29, 2005. Omni Financial Services, Inc., Hoffman Estates, IL (license no. 13196) Cease and Desist Order issued December 9, 2005 became final on December 29, 2005. Prime Capital Group, LLC, Atlanta, GA (license no. 19951) Cease and Desist Order issued November 21, 2005 became final on December 26, 2005. CEASE AND DESIST ORDERS Lifted None FINAL CONSENT ORDERS Issued Nichols, Aisha Hobbs, Lithonia, GA Consent Order issued December 13, 2005 became final on December 13 2005. Robinson, Tanya, College Park, GA Consent Order issued December 1, 2005 became final on December 1, 2005. SUPERIOR COURT INJUNCTIONS Bates, Vickee, Woodstock, GA - Consent Order issued December 5, 2005 became final on December 5, 2005. 6 . . . . . . . . . . . . . . . . . . . .. 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 e-mail address: dbfmort@dbf.state.ga.us FINE REASON 3 Licensees fined for Advertising Violations 5 Licensees fined for Background Check Violations 5 Licensees fined for Books & Records 1 Licensee fined for Unapproved Branch 1 Licensee fined for Unapproved Branch Manager 4 Licensees filed for Loan files not properly maintained 7 Licensees fined for Prohibited Act 1 Licensee fined for Relocation of office w/o notice 2 Licensees fined fordoing business w/ unlicensed entity 2 Licensees fined for Miscellaneous/Other _____________________________________________________________________________________ LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN DECEMBER 2005 ID# COMPANY NAME CITY 20849 Distinctive Mortgage, Inc. 20882 Envision Lending Group, Inc. 20916 Popular Mortgage Servicing, Inc. 20917 Popular Housing Services, Inc. 20927 Vera E. Holliday Pembroke Pines Salt Lake City Cherry Hill Jacksonville Stone Mountain 20928 Green Grass Mortgage, LLC Lilburn 20871 HomeKey Lending, Inc. Suwanee 20937 Derek Justin Pilkington Atlanta 20941 Chesapeake Capital Mtg Corporation Pasadena 20976 Seaboard Lending Group, LLC Pompano Beach 20977 MD Mortgage Corporation Reisterstown 20979 Hometown Mortgage USA, Inc. Woodstock 20980 Allstate Mtg & Loan Corporation Clearwater 7268 Ameron Mortgage Corporation Marietta 17727 Merit Financial, Inc. Kirkland 20229 Northland Finance & Lending, LLC * Hiawassee 20364 United Pacific Realty and Invt, Inc. * Lake Forest 20681 Franklin Credit Mgmt Corp + New York 20902 Blue Marble Lending, Inc. Tampa 20929 America's Lending Leader, LLC Smyrna 20932 John J. Jorgensen Atlanta 20945 Hughs Mortgage Resources, Inc. Gainesville 20960 MTS Financial, LLC Villa Rica 20986 Harmony Mortgage Finance Corp. Jonesboro 20995 Home Mortgage Financial Corp. + Marietta 21012 Harold Avan Lawson Lithonia 21023 Ridgeland Mortgage Services, LLC Marietta 20883 Century Pacific Mtg Corporation Norcross 20964 Intergroup, Inc. Canton MB ORIGINAL ST CODE APPROVAL RENEWAL REINSTATED FL B UT B NJ R FL R GA B 12-02-2005 12-02-2005 12-02-2005 12-02-2005 12-02-2005 12-02-2005 12-02-2005 12-02-2005 12-02-2005 12-02-2005 GA B GA B GA B MD B FL L MD B GA B FL L GA B WA B GA L CA L NY L FL B GA B GA B GA B GA B GA B GA L GA B GA B GA L GA L 12-02-2005 12-09-2005 12-09-2005 12-09-2005 12-09-2005 12-09-2005 12-09-2005 12-09-2005 08-04-1995 01-03-2003 04-01-2005 07-15-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-23-2005 12-23-2005 12-02-2005 12-09-2005 12-09-2005 12-09-2005 12-09-2005 12-09-2005 12-09-2005 12-09-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-16-2005 12-23-2005 12-23-2005 7 . . . . . . . . . . . . . . . . . . . .. LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN DECEMBER 2005 ID# COMPANY NAME CITY ST 20969 Nextlevel Financial, LLC Acworth GA 20970 BPSC, LLC Decatur GA 20985 AlliedState Mortgage, LLC Snellville GA 20990 Mandalay Mortgage, LLC Woodland Hills CA 20996 Pacific Residential, Inc. Corona CA 20997 CBO Financial Mortgages, LLC Canton GA 21001 Guaranteed Finl Svcs Corp Duluth GA 21009 Island Time Properties, LLC Gainesville GA 20971 Century Finl Svcs, LLC (SC) Lexington SC 20991 United Mortgage Corp. (NY) Hauppauge NY 21011 Interstate Mortgage Network, Inc. Laguna Hills CA 14389 Homeowners Mtg of America, Inc. Marietta GA 16602 Liberty Mortgage, Inc Jacksonville FL 19789 Acceptance Capital MtgCorporation Spokane Valley WA 20131 Direct Mortgage Of SC., Inc. Charleston SC 11808 AMERA Mortgage Corporation FARMINGTON HILLS MI 12794 Riviera Mortgage, LLC ATLANTA GA 12681 Homes 4 U, Inc. Jonesboro GA 19152 Specialized Loan Servicing, LLC Highlands Ranch CO MB CODE B B B L L B B B B L L L B B L L B B L ORIGINAL APPROVAL 12-23-2005 12-23-2005 12-23-2005 12-23-2005 12-23-2005 12-23-2005 12-23-2005 12-23-2005 12-30-2005 12-30-2005 12-30-2005 02-26-1999 08-10-2001 11-19-2004 02-11-2005 10-01-1996 08-29-1997 08-08-1997 06-25-2004 RENEWAL 12-23-2005 12-23-2005 12-23-2005 12-23-2005 12-23-2005 12-23-2005 12-23-2005 12-23-2005 12-30-2005 12-30-2005 12-30-2005 12-09-2005 12-09-2005 12-09-2005 12-09-2005 12-23-2005 12-23-2005 12-30-2005 12-30-2005 REINSTATED 12-09-2005 12-09-2005 12-09-2005 12-09-2005 12-23-2005 12-23-2005 12-30-2005 12-30-2005 TOTAL: 48 LICENSEES/REGISTRANTS REVOKED, EXPIRED, SURRENDERED, WITHDRAWN OR DENIED IN DECEMBER 2005 ID# NAME 6054 CUNA MUTUAL MTG CORP 6901 MIDLAND MTG CO 12005 AMER MONEYLINE INC 12109 GA STATE MTG INC 12266 GEORGETOWN MTG INC 13196 OMNI FUNDING GRP 15175 SEA BREEZE FINL SVCS INC 16144 RODNEY SMITH INC 16153 CREATIVE MTG CONCEPTS LLC 16597 UNIMTG LLC 17063 AMER MTG NETWORK INC 17275 WATERMARK FINL PARTNERS 18508 KB HM MTG CO 18538 FIVE STAR FUNDING INC CODE LD LD LD BD LD BD LD BD BD LD LD LD LD BD REVOKED EXPIRED SURRENDERED 12-12-2005 12-29-2005 WITHDRAWN 12-30-2005 12-07-2005 12-30-2005 12-15-2005 12-05-2005 12-30-2005 12-30-2005 12-07-2005 12-21-2005 12-05-2005 12-05-2005 12-20-2005 DENIED 8 . . . . . . . . . . . . . . . . . . . .. LICENSEES/REGISTRANTS REVOKED, EXPIRED, SURRENDERED, WITHDRAWN OR DENIED IN DECEMBER 2005 ID# NAME 18548 BELL, MICHAEL 18607 IBEX NETWORKS INC 19555 WOODMEN MTG SVCS INC 19751 ACS MTG INC 19951 PRIME CAP GRP LLC TOTAL: 19 CODE BD LD LD BD LD REVOKED EXPIRED SURRENDERED 12-15-2005 12-26-2005 WITHDRAWN 12-30-2005 12-30-2005 12-07-2005 DENIED 2006 State Holidays: The following is a list of State Holidays when the Capitol and all State agencies will be closed in 2006. HOLIDAY New Year's Day Martin Luther King Jr. Day Confederate Memorial Day Memorial Day Independence Day Labor Day Columbus Day Veterans' Day Thanksgiving Day Robert E. Lee's Birthday Christmas Day Washington's Birthday DATE OBSERVANCE Sunday, January 1 will be observed Monday, January 2 Sunday January 15 will be observed Monday, January 16 Wednesday, April 26 will be observed on Monday, April 24 Monday, May 29 Tuesday, July 4 Monday, September 4 Monday, October 9 Saturday, November 11 will be observed on Friday, November 10 Thursday, November 23 Thursday, January 19 will be observed on Friday, November 24 Monday, December 25 Wednesday, February 22 will be observed on Tuesday, December 26 9 . . . . . . . . . . . . . . . . . . . ..