Monthly Summary of Mortgage Activities Georgia Department of Banking & Finance Inside this Issue 2 FY 2006 License Distribution 2 New Financial Requirements 3 Housekeeping Bill Provisions 4 Other Issues Fingerprint Cards Branch Policy Division Training 5 Administrative Actions and Issues 6 Licenses Approved or Reinstated 8 Licenses Revoked, Expired, Suspended, Withdrawn, Denied FOR THE PERIOD ENDING APRIL 2005 SUMMARY OF ACTIVITIES MORTGAGE DIVISION WEB SITE: www.state.ga.us/dbf 2990 Brandywine Road Suite 200 Atlanta, GA 30341 Phone: (770) 986-1629 Fax: (770) 986-1029 . . . . . . . . . . . . . . . . . . . .. News Items FY 2006 License Distribution For those licensees who have successfully completed the renewal of their license for FY2006, please note that new licenses for the year will be mailed out beginning mid-June 2005. If you do not receive your new license by the first week of July, please contact the office. & Thanks Again Without your participation, the on-line renewal process would not have been such a huge success. Thanks!! NEW FINANCIAL REQUIREMENTS The Department's Housekeeping Bill for this legislative session was Senate Bill 82. Some of the significant items related to the Georgia Residential Mortgage Act, Article 13 of Chapter 1 of Title 7 of the Official Code of Georgia, Code Sections 7-1-1000 to 7-1-1021, are noted herein for your reference. A complete marked-up version of the housekeeping bill can be found on the internet at: http://www.legis.state.ga.us/le gis/2005_06/sum/sb82.htm. The bill was signed May 5, 2005, and became effective upon the signature of the Governor. However, the provisions relating to the financial requirements for licensing, Section 7-1-1003.2 noted below, are to be implemented beginning July 1, 2005. By providing a later implementation date, licensees who would have difficulty meeting the financial requirements in a timely manner for the Fiscal Year 2006 renewal period will have until Fiscal Year 2007 renewal period to meet the requirements, which follow. PHASE OUT-AUDITED NET WORTH The use of audited financial statements, demonstrating a required minimum net worth, will no longer be accepted for either a broker or lender license, and this change also applies to HUD approved lenders and correspondents. Beginning July 1, 2005, brokers must have a surety bond or letter of credit from a federally insured financial institution in the amount of $50,000, and lenders must have either a bond or letter of credit as noted in the amount of $150,000. The bond form is available on the Department's website, along with a list of bonding companies at: www.state.ga.us/dbf/mortgage_ forms.html (The list is neither a recommendation nor a required list of providers, but may assist you in locating a bonding company.) CONVERSION REQUIREMENTS Companies whose audited financial statements expire within the period of July 1, 2005 and June 30, 2006 will have to provide a bond or letter of credit in order to maintain their license and avoid revocation for failure to maintain the required financial standards. An example of this is a company whose last audit was for the fiscal year ending 10/31/2004. For the current renewal period, this audit is acceptable, as it is less than 15 months old. However, as of January 31, 2006, this audit will no longer qualify an applicant for licensing. To avoid revocation action, the licensee will have to provide a bond or letter of credit in the required amount for their license type. Bonds can be written for multiyear periods. However, the expiration date of any bond in any given year must be June 30, to coincide with the annual license expiration / renewal period. 2 . . . . . . . . . . . . . . . . . . . . . . .. FY 2005 HOUSEKEEPING BILL PROVISIONS Section 7-1-1000 (10) Definitions Applicable to Mortgage Lenders and Brokers Changed the definition of "misrepresent" to include to intentionally engage in any conduct which leads to a false belief which is material to the transaction. Section 7-1-1003 (b) (1) Licensing Mortgage Lenders or Mortgage Brokers Expanded the types of legal entities seeking a license which would be required to report members, officers and directors for licensing purposes. Section 7-1-1003.2 - Financial Requirements for Licensing Changes include the removal of net worth as a means of financial qualification for a lender's license, and the removal of HUD approval status as a means of alternatively using net worth for qualifying for licensing for either a broker's or lender's license. Neither brokers nor lenders will be able to use HUD approval status and a minimum net worth to qualify for licensing. As a result, all brokers will be required to have and maintain a $50,000 surety bond or letter of credit with a federally insured financial institution and lenders will be required to have and maintain a $150,000 surety bond or letter of credit with a federally insured financial institution. Section 7-1-1004 Investigations Regarding Licensing Changes include addition of the word "applicant" and "licensee" where necessary to clarify that some of the provisions of this section apply to applicants for a license as well as existing licensees. In addition, the requirement to conduct a background check on employees by licensees was changed to clarify that the time period that a licensee has to conduct a background check is 90 days from the initial date of hire, not from any subsequent hire dates, should the person have been temporarily dismissed before the end of the initial 90 day period. Section 7-1-1005 - Renewals Eliminated language related to renewals for licenses issued in the year 2000. Section 7-1-1006 - Contents and Posting of Licenses Clarified to specify that the required notification to the Department for a change in address was for the main office or an approved branch, within 15 days of the change, and clarified the need to obtain prior approval for a new branch office. Additionally, a change was added to remove the requirement for notification to the Department of the commencement of business at the approved additional office. Section 7-1-1013 - Prohibited Acts Paragraphs (1), (6), and (11) of Code Section 7-1-1013, relating to prohibited acts of mortgage licensees, are amended specifically as shown below for clarity. These provisions provide tighter definitions regarding when or how misrepresentation occurs, at what point it can occur in a mortgage transaction, and clarifies that prohibited acts involving regulatory activity by the Department and the licensee are not limited to examination, application, or renewal activity only, but upon any request in relation to regulatory authority over a licensee. "(1) Misrepresent the material facts, or make false statements or promises, or submit false statements or documents likely to influence, persuade, or induce an applicant for a mortgage loan, a mortgagee, or a mortgagor to take a mortgage loan, or, through agents or otherwise, pursue a course of misrepresentation by use of fraudulent or unauthorized documents or other means to the department or anyone through agents or otherwise; (6) Engage in any transaction, practice, or course of business which is not in good faith or fair dealing, or which operates a fraud upon any person, in connection with the attempted or actual making of, purchase of, transfer of, or sale of any mortgage loan; (11) Purposely withhold, delete, destroy, or alter information requested by an examiner of the department or make false statements or material misrepresentations to the department during the course of an examination or on any application or renewal form sent to the department." 3 . . . . . . . . . . . . . . . . . . . . . . .. Section 7-1-1017- Relating to Suspensions or Revocations of Licenses Expanded the grounds on which the Department can suspend or revoke an original or renewal license or registration to include a violation of a final order previously issued by the Department, and expanded to specify that withdrawal or nonrenewal of a license by the licensee will not prevent the Department from pursuing to its conclusion any administrative action initiated against a licensee while the license was current. Section 7-1-1018- Relating to Cease and Desist Orders Clarified that the provisions of this section apply to persons to whom the Department has properly issued an administrative action, not just those required to be licensed under the Article. requiring no further information, along with good fingerprint cards, the approval processing time has decreased from 10-12 weeks to 4-6 weeks, and in some cases, we have been able to approve these applications within two weeks. Often, however, the cards received by the Department are not of sufficient quality to be scanned. Therefore, in order to increase the probability fingerprint cards will be readable and acceptable for the GBI and FBI, examine the cards and make sure the prints are not too light or dark and the prints are not smudged. In addition, make sure each print is inside the appropriate blue box on the form and does not touch or cross over the lines. WRITTEN BRANCH OPERATIONS POLICY GUIDELINES a section titled "Written Branch Operations Policy". MORTGAGE DIVISION TRAINING Please be advised that June 6 through June 10, 2005, members of the Mortgage Division staff will be in training. If you need to easily get in touch with a member of the staff, please leave an e-mail message. We will be periodically checking messages. A listing of e-mail addresses is available on the web at: www.state.ga.us/dbf/staff.html. Should you need to speak to a member of the staff, you may contact our receptionist at 770/986-1136 to leave a message. Please understand that the call may be returned at the beginning of the following week. Other Items FINGERPRINT CARD SCANNING In September of last year, the Department purchased a fingerprint card scanner which allows us to scan "on-line" fingerprint cards to the GBI. In January of this year, the GBI obtained the ability to forward these scanned cards to the FBI. As a result, if the Department receives a fingerprint card that can be scanned, criminal history results may be received within days, and not weeks, which helps decrease the time for approving pending applications. If we receive a complete application The Written Branch Operations Policy should include items such as how you will supervise branch operations (branches located in Georgia must be supervised by you), how the income and expenses of branches will be reported (financial information), how branch employees will be paid (all must be W-2 employees), the mortgage loan transaction journal, etc. The policy must include a definitive statement that branches are under your control and that you accept full responsibility for the actions of branch personnel. The policy should not just be a copy of your employee handbook, operating procedures manual, etc., unless such information is included in these publications in On-Line Renewal Survey Your opinion is valued, and the Department will be asking for your thoughts regarding the on-line renewal process via an internet survey. Look for an e-mail soon regarding how to give us your feedback and ideas on ways to improve the renewal process. 4 . . . . . . . . . . . . . . . . . . . . . . .. Administrative Actions and Issues CEASE AND DESIST ORDERS - Issued A to D Credit Solutions, Snellville, GA - Cease and Desist Order issued March 7, 2005 became final on April 7, 2005. Alvarez, Juan Jose, Woodstock, GA - Cease and Desist Order issued March 14, 2005 became final on April 14, 2005. Exclusive Metro Mortgage (license no. 16141) - Cease and Desist Order issued March 16, 2005 became final on April 6, 2005. Frazier, Tara, Snellville, GA - Cease and Desist Order issued March 7, 2005 became final on April 7, 2005. Houseworth, Jamel J., Stone Mountain, GA (license no. 19718) - Cease and Desist Order issued March 4, 2005 became final on April 3, 2005. Hunter Mortgage Company, Atlanta, GA (license no. 13242) - Cease and Desist Order issued March 23, 2005 became final on April 13, 2005. Jenkins, Jule III, Smyrna, GA - Cease and Desist Order issued March 15, 2005 became final on April 15, 2005. Pfeifer, Jeff, Roswell, GA - Cease and Desist Order issued March 31, 2005 became final on April 4, 2005. Tucker, Marsha P., Woodstock, GA (license no. 17056) -Cease and Desist Order issued March 4, 2005 became final on April 3, 2005. Weldon, Antoinette, Snellville, GA (license no. 19078) - Cease and Desist Order issued March 23, 2005 became final on April 21, 2005. CEASE AND DESIST ORDERS Lifted None FINAL CONSENT ORDERS Issued Johnson, Melissa A., Powder Springs, GA - Consent Order issued April 21, 2005, became final April 21, 2005. 5 . . . . . . . . . . . . . . . . . . . .. SUPERIOR COURT INJUNCTIONS Joseph, Keith, Conyers, GA Consent Order issued April 11, 2005, became final April 11, 2005. Webster, Leslie, Woodstock, GA Consent Order issued April 5, 2005, became final April 5, 2005. 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 2 Licensees fined for Advertising Violations 206 Licensees fined for Audit filed late 3 Licensees fined for Background Checks violations 9 Licensees fined for Books and Records 1 Licensee fined for Unapproved Branch 1 Licensee fined for Unapproved Branch Manager 1 Acq. of 25% ownership without approval 2 Licensees fined for Employment of a Felon 1 Licensee fined for GaFLA violations 4 Licensees fined for Loan Files not properly maintained 3 Licensees fined for Prohibited Acts 1 Licensee fined for Check returned for insufficient fund 339 Licensees fined for Renewal filed late 3 Licensees fined for doing business with unlicensed entity 1 Licensee fined for 1099 employees ______________________________________________________________________________________________________ LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN APRIL 2005 ID# COMPANY NAME CITY ST MB ORIGINAL RENEWAL REINSTATED CODE APPROVAL 18537 Marvin Simmons, Inc. * MARIETTA GA L 19970 AmeriFirst Home Improvement OMAHA NE L 20032 Granger Mortgage Corporation BRADENTON FL L 20087 Loan Tech, Inc. ENCINITAS CA B 20094 AMC Mortgage Services, Inc. IRVINE CA L 20097 HTD Investments, LLC DULUTH GA B 20117 Liberty Financial Mortgage ALPHARETTA GA B 20143 Mac-Clair Mortgage FLINT MI L 20146 HK Financial, Inc. NEWNAN GA B 20150 J. Elliott & Associates, LLC ATLANTA GA B 20163 Southern Horizon Financial WOODSTOCK GA B 20167 States Home Mortgage, Inc. NORCROSS GA B 20170 About You Mortgage Services, LAWRENCEVILLE GA B 20171 Carreker Enterprise, LLC ATLANTA GA B 20172 Home Source Financial, LLC MACON GA B 20174 FMF Capital, LLC SOUTHFIELD MI L 07/11/2003 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 6 . . . . . . . . . . . . . . . . . . . . . . .. LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN APRIL 2005 ID# COMPANY NAME CITY ST MB ORIGINAL RENEWAL REINSTATED CODE APPROVAL 20176 People's Choice Funding, Inc. IRVINE CA L 04/01/2005 04/01/2005 20180 20181 20183 20184 Jerome Breadon Johnson, Sr. Taryn Lynne Melton Gordon Lending Corporation Grant H. Carroll ALPHARETTA DACULA DUBLIN ATLANTA GA B GA B OH L GA B 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 20187 20188 20189 20190 20197 20198 20204 20205 20212 20214 20217 20226 20229 20231 20234 20245 20249 20034 20070 20186 20201 20218 20233 20248 20258 20264 20266 20268 20272 20275 20276 12244 20025 20130 20185 20257 20259 20270 20084 20271 Birchwood Capital, LLC Cumberland Mortgage Dean Wilson Wellstar Financial, Inc. Fidelity Mortgage Center, LLC Leeland Group Mortgage, LLC Premier Mortgage Funding, The People's Mortgage Southchase Mortgage, LLC Schneider, Zoe and Primary Equity Mortgage Aegis REIT Corporation Northland Finance & Lending, Pinnacle Loan Corporation Performance Lending, Inc. Ray Anthony Dennis Prime Time Mortgages, Inc. Pinnacle Direct Funding AW Financial Mortgage, Inc. Legacy Mortgage Associates, Goldman Sachs Mortgage Mortgage Specialists, LLC Morgan Financial, Inc. Global Mortgage Solutions, Jerry Miles Pointer Hiller Dave Real Estate & The G. R. Nassif Group, Inc. Anthony B. Hardin Alternative Mortgage Grp, Inc. Ace Mortgage Services, LLC Bonnie Clark Hale First Mortgage Grp, LLC + Saxon Funding Management, American Mortgage Solutions, Trinity United Mortgage, LLC Oceans of Opportunity, LLC American Lending Group, Inc. Landers Mortgage, Inc. ToJuanna G. Broderick Anchor Mortgage Group, Inc. MABLETON MARIETTA MCDONOUGH ATLANTA STOCKBRIDGE SAVANNAH CLEARWATER RINCON COLUMBUS MACON WOODSTOCK HOUSTON HIAWASSEE ATLANTA ALPHARETTA SUWANEE SNELLVILLE ORLANDO ATLANTA CANTON NEW YORK WEST CHANDLER LITHONIA STONE KENNESAW NORCROSS ATLANTA ATLANTA DECATUR STONE DULUTH GLEN ALLEN SUWANEE BATON ROUGE DECATUR EARTH CITY DULUTH GARISSONVILLE STOCKBRIDGE GA B GA B GA B GA B GA B GA B FL L GA L GA B GA B GA B TX L GA B GA B GA B GA B GA B FL L GA B GA B NY R MA B AZ L GA L GA B GA B GA B GA B GA B GA B GA B GA B VA L GA B LA B GA B MO L GA B VA B GA B 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 02/21/1997 04/15/2005 04/15/2005 04/15/2005 04/15/2005 04/15/2005 04/15/2005 04/22/2005 04/22/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/01/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/08/2005 04/15/2005 04/15/2005 04/15/2005 04/15/2005 04/15/2005 04/15/2005 04/15/2005 04/22/2005 04/22/2005 7 . . . . . . . . . . . . . . . . . . . . . . .. LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN APRIL 2005 ID# COMPANY NAME CITY ST MB ORIGINAL RENEWAL REINSTATED CODE APPROVAL 20278 Afstar Mortgage, LLC SNELLVILLE GA B 20280 20301 20308 Allison Insurance and Quick Close Processing, Inc. S & L Brokers, LLC EAST RIDGE SUWANEE COVINGTON TN B GA P GA B 20318 Associates Lending Group, Inc. HINESVILLE GA B 18343 Stuckey Enterprises Inc. + AUGUSTA GA B 19918 Mila, Inc. MOUNTLAKE WA L 20071 First Meridian Mortgage TAMPA FL B 20168 Superior Funding, LLC ATLANTA GA B 20261 Kenneth Pepper Holcombe, II GAINESVILLE GA B 20277 Equitable Funding Group, Inc. ATLANTA GA B 20334 Manhattan Lending TUCKER GA B 20335 Castle Point Mortgage, Inc. PARSIPPANY NJ L 20336 Bart Anthony Shelnutt SNELLVILLE GA B 20359 Teresa Paulette Scott WARNER ROBINS GA B 15822 LoanLeaders of America IRVINE CA L 16617 Margaret Ruddock STONE GA B 15175 Sea Breeze Financial Services, Inc. TOTAL: 79 IRVINE CA L 04/22/2005 04/22/2005 04/22/2005 04/22/2005 04/22/2005 06/13/2003 04/29/2005 04/29/2005 04/29/2005 04/29/2005 04/29/2005 04/29/2005 04/29/2005 04/29/2005 04/29/2005 07/14/2000 07/06/2001 11/12/1999 04/22/2005 04/22/2005 04/22/2005 04/22/2005 04/22/2005 04/29/2005 04/29/2005 04/29/2005 04/29/2005 04/29/2005 04/29/2005 04/29/2005 04/29/2005 04/29/2005 04/29/2005 04/01/2005 04/06/2005 04/29/2005 04/01/2005 04/01/2005 04/29/2005 MB CODES B = BROKER L = LENDER R = REGISTRANT * Upgrade Broker to Lender + Downgrade Lender to Broker # Upgrade Lender to Registrant Downgrade Registrant to Lender LICENSEES/REGISTRANTS REVOKED, EXPIRED, SUSPENDED, WITHDRAWN OR DENIED IN APRIL 2005 ID# NAME 5959 OFFICIAL MTG & INV INC 6492 GE CAP CORP 17056 TUCKER, MARSHA P 18696 TOP CHOICE MTG LLC 19011 1ST UNION MTG INC 19078 WELDON, ANTOINETTE 19718 HOUSEWORTH, JAMEL 19868 OMNI HM FINANCING INC TOTAL: 8 CODE BD LD BD BD BD BD BD BD REVOKED 04/25/2005 04/13/2005 EXPIRED 04/03/2005 04/21/2005 04/03/2005 SUSPENDED WITHDRAWN 04/29/2005 04/07/2005 04/29/2005 DENIED 8 . . . . . . . . . . . . . . . . . . . . . . ..