Inside this Issue 2 Continuing Education Requirements 2 Background ChecksNew Time Requirements 2 Surety Bond Requirement Reminder 3 More On-line Applications 3 Outstanding Orders on Employees 4 Notificants On-line Reporting 5 Administrative Actions & Issues Monthly Summary of Mortgage Activities Georgia Department of Banking & Finance FOR THE PERIOD ENDING August 2005 SUMMARY OF ACTIVITIES MORTGAGE DIVISION WEB SITE: www.state.ga.us/dbf STAFF: www.state.ga.us/dbf/staff.html 2990 Brandywine Road Suite 200 Atlanta, GA 30341 Phone: (770) 986-1269 Fax: (770) 986-1029 . . . . . . . . . . . . . . . . . . . .. News Items CONTINUING EDUCATION REQUIREMENTS A significant change in the regulations involves the implementation of an annual continuing education (CE) requirement for brokers. Significant portions of the requirement are as follows: Hours Required: Brokers must obtain 12 hours of continuing education in a 12 month period prior to the annual renewal deadline. Qualifying Attendees: the qualifying attendee will be the individual owner of the licensee, or a person designated and employed by the licensee as the primary supervisor or manager of the business. Qualifying Courses: Courses approved by mortgage related state and federal regulatory agencies, NAMB, state and federally regulated lenders and affiliates, and other approved providers. Courses consisting of monthly association meetings, conventions, seminars or those provided through electronic means, will qualify as continuing education hours, provided the subject meets the requirements of the rule. Course Content: Generally course material must pertain to state and federal rules and regulations on the mortgage industry, the brokering process, loan application processing, proper loan documentation, and, in general, operating a mortgage brokering business in Georgia. NOTE-At least one hour shall be concentrated on fraud detection and prevention annually. Proof of Training: Licensees must maintain course documentation as noted in the rule, i.e. name of course, provider, date, etc., and must maintain such documentation for a period of 5 years. Approved Georgia in-state education providers must maintain lists of attendees for 2 years. Fine: Licensees who apply for renewal, but who have failed to meet the continuing education requirements will be fined $1,000, and will have from April 1 to June 30 prior to the new fiscal year licensing period starting July 1 of each year to obtain CE credits, or their license can not be renewed. The requirement for CE hours will begin with the FY 2008 licensing period (April 1, 2007 renewal). As such, licensees will have from January 1, 2006 through April 1, 2007 to obtain credits. After that initial period, April 1 through March 31 will be the period each year to obtain CE hours. To qualify for renewal if you failed to obtain credit during that period, you will have from April 1 to June 30 to make up the credits, but will receive a $1,000 fine for failure to obtain credit in the qualifying 12 months for that renewal period. If the CE hours are then not obtained in the make-up period, the renewal will not be approved. BACKGROUND CHECKSNEW TIME REQUIREMENT Regulation 80-11-1-.05(1) regarding background checks on covered employees was revised to require that all employers submit background information to the proper authorities promptly upon initial hire in order to meet the 90 day requirement to complete the checks on new employees. Therefore, the new requirement states that employers must submit the information to the proper authorities within 10 business days of initial hire. A fine of $1,000 is imposed if the 10 business day filing requirement is not met and an employee is found to be disqualified under Code Section 7-1-1004. SURETY BONDS REQUIREMENT REMINDER To those licensees who still have a qualifying audit in place, please be advised that once the audit expires for licensing purposes and no surety bond is provided, the licensee will be issued a cease and desist order and their license will expire 20 days after the issuance of the order if no bond is subsequently provided. As a reminder, please read below: 2 . . . . . . . . . . . . . . . . . . . .. GRMA Requirements Due to changes in the Georgia Residential Mortgage Act made in the 2005 legislative session, all licensees must now have a surety bond in place in order to meet the financial requirements for licensing. This means a bond (or letter of credit) in the amount of $50,000 for brokers and $150,000 for lenders. The bond must be on the Department approved bond form available from the website. The HUD approved broker/lender category no longer exists for any type of licensee. For those lenders and HUD approved brokers who were still able to use their audited financials for the FY 2006 renewal period, please note that, when your existing audit expires, you must provide a qualifying surety bond to replace those audited financials. If you fall into the expiring category noted above, you will receive a letter from the Department indicating that your audit is expiring and the bond is required. You may not submit new audited financials and maintain your license. Failure to provide a bond will result in the revocation of your existing license for failure to maintain the financial qualifications required for the license. INSURER Requirements The new requirement for all licensees to have a bond exposes insurers to potentially more risk in a narrow market, and therefore many of these bonding companies have chosen to tighten their underwriting and credit standards. A review of the procedures utilized by some bonding companies indicates they have chosen to more closely analyze credit scores, outstanding liens and judgments, and the liquidity available in the financial position of the insured. Based on the bonding company's underwriting standards and analysis, licensees are then offered a rate plan, at which point they may then choose to accept or reject the insurance plan offered through that company. These financial requirements are a business decision by the bonding company for protection of their business and/or that of the sureties with whom they work. Should you wish to seek further assistance or feel that you have additional issues or concerns with regard to the plan as offered by a company, please contact the Insurance Commissioner's Office at (404) 656-2070 or email at: inscomm@mail.oci.state.ga.us. MORE ON-LINE APPLICATIONS The following on-line functions are now available as noted: We encourage you to take advantage of these new on-line applications. They save time, paper, prevent transcription errors, and ensure that the correct information is maintained for your license. Other Items OUTSTANDING ORDERS EMPLOYEES As you know, licensees have the responsibility to check the Department's website to ensure their potential employees do not have an outstanding Cease & Desist Order issued by the Department. Licensees should also be aware that if an employee/prospective employee has an outstanding Consent Order, then the licensee should ask the employee for a copy of the Order to determine exactly what restrictions have been placed on that employee or potential employee regarding working in the industry. 3 . . . . . . . . . . . . . . . . . . . .. NOTIFICANTS REPORTING CHANGES ON-LINE Under the GRMA, any wholly owned subsidiary of any lender described in paragraph Code Section 7-1-1000 (1) shall be subject to the filing of a notification statement in order to facilitate the department's handling of consumer inquiries. The notification requirements are contained in Code Section 71-1003.4. Any subsidiary which fails to file the notification statement or keep the information current will immediately be subject to the registration requirements of Code Section 7-1-1003.3 To facilitate this reporting, the Department has provided an online update system, as noted in the "On-Line" section above. So, to use the system, notificants apply on-line for activation of a password. This step is made to ensure that only authorized personnel have access to the data for that notificant. The following day after application for the password has been made, Mortgage Division personnel will verify the information provided by the applicant for password access, and if all data is validated, then the password will be activated. Mortgage Division will then notify the notificant of their password at the e-mail address provided by the applicant when applying for the password. This password is good for subsequent changes. Should the password ever be forgotten or compromised, the user can go on-line for a reminder or to reapply. 4 . . . . . . . . . . . . . . . . . . . .. Administrative Actions and Issues CEASE AND DESIST ORDERS Issued ABC Mortgage Services, Inc. Augusta, GA (license 15290) Cease and Desist Order issued July 22, 2005 became final on August 21, 2005. AMB Brokers, LLC, Alpharetta, GA (license no. 18511) Cease and Desist Order issued July 20, 2005 became final on August 18, 2005. Butler, Shonta Y., Smyrna, GA Cease and Desist Order issued July 29, 2005 became final on August 19, 2005. Eshmon, Taamiah, Stone Mountain, GA Cease and Desist Order issued July 20, 2005 became final on August 10, 2005. Ewing, Terry Lynn, Lilburn, GA Cease and Desist Order issued July 29, 2005 became final on August 19, 2005. Lawson, Ruth C., Flowery Branch, GA (license no. 18636) Cease and Desist Order issued July 20, 2005 became final August 18, 2005. Lee, Veronica, Statesboro, GA Cease and Desist Order July 25, 2005 became final on August 25, 2005. Liberty Mortgage Capital, Inc., Atlanta, GA Cease and Desist Order July 20, 2005 became final on August 20, 2005. Nash, Samantha, Atlanta, GA Cease and Desist Order July 29, 2005 became final on August 19, 2005. Nationwide Realty & Mortgage, Inc., Marietta, GA (license no. 19939) Cease and Desist Order issued July 22, 2005 became final August 20, 2005. Ocean West Enterprise, Inc. dba Ocean West Funding, Tustin, CA (license no. 12746) Cease and Desist Order issued July 7, 2005 became final August 7, 2005. Park West Mortgage, Inc, Atlanta, GA license no. 15698) Cease and Desist Order issued July 19, 2005 became final August 17, 2005. Smith Enterprises, Inc. dba Smithstone Mortgage Service, Hogansville, GA (license 6648) Cease and Desist Order issued July 18, 2005 became final on August 14, 2005. Universal Funding Enterprises (Veronica Lee), Statesboro, GA Cease and Desist Order issued July 22, 2005 became final on August 22, 2005. _____________________________________________________________________________________ 5 . . . . . . . . . . . . . . . . . . . .. CEASE AND DESIST ORDERS Lifted None FINAL CONSENT ORDERS Issued American Home Loan Corp., Suwanee, GA (license no. 16704) - Consent Order issued August 11, 2005, became final on August 11, 2005. Morris, E. David, Atlanta, GA Consent Order issued August 1, 2005, became final on August 1, 2005. Ashton, James D., Gainesville, GA Consent Order issued August 11, 2005, became final on August 11, 2005. SUPERIOR COURT INJUNCTIONS None 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 5 Licensees fined for Advertising Violations 1 Licensee fined for Background Checks Violations 3 Licensees fined for Books & Records 2 Licensees fined for Unapproved Branch 3 Licensee fined for Unapproved Branch Manager 4 Licensees fined for Loans Files not properly maintained 1 Licensee fined for GaFla Violations 2 Licensees fined for Check returned for Insufficient funds 3 Licensees fined for Prohibited Act 1 Licensee fined for Doing business w/ Unlicensed Entity ________________________________________________________________________________________________________ 6 . . . . . . . . . . . . . . . . . . . .. LICENSEES/REGISTRANTS REVOKED, EXPIRED, SURRENDERED, WITHDRAWN OR DENIED IN AUGUST 2005 ID# NAME CODE 5738 MCCAUGHAN MTG CO INC LD 6648 SMITH ENT INC BD 14715 FIRST CAPITAL MORTGAGE BD & ASSOCIATES, INC. 15265 OCWEN INC BD 15290 ABC MTG SVCS INC BD 15698 PARK W MTG INC BD 16704 AMER HM LOAN CORP BD 17939 RHR MTG AMER LLC LD 18511 AMB BROKERS LLC BD 18636 LAWSON, RUTH C PD 19939 NATIONWIDE REALTY & MTG BD I TOTAL: 11 REVOKED EXPIRED SURRENDERED 08-19-2005 08-14-2005 08-21-2005 08-17-2005 08-18-2005 08-18-2005 08-20-2005 08-11-2005 WITHDRAWN 08-08-2005 08-29-2005 08-26-2005 DENIED LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN AUGUST 2005 ID# 20269 20322 20422 20493 20524 20539 20543 20553 20576 20595 20596 20597 20643 19823 20459 20473 20575 20584 20619 20620 20623 COMPANY NAME CITY Pacific Reverse Mortgage, Inc. The Mortgage Zone, Inc. (NY) SunnyMTG.com 866-768-CASH Amherst Funding Group, L.P. AmStar Financial Mortgage, Inc. ACT Lending Corporation Central Fidelity Mtg Corp Melanie W. Walburg San Diego Melville Pompano Beach Austin Atlanta Sunrise Atlanta Dawsonville Mortgage SuperStore, Inc. Sandra B. Brand First Choice Mortgage & Capital AC K Edwai rds Tax & Finl Svcs Atlanta Primary Home Mtg, Inc. Resurgens Capital Mtg, LLC * American Mtg Corp of S AL Allegiance Mortgage, Inc. Broker's Home, LLC Platinum Mortgage, Inc. (AL) Grassroots Mortgage, Inc. Evergreen Home Finance, LLC Shelby Ernest Kervin Boca Raton Alpharetta Lithonia Hampton Alpharetta Atlanta Foley Chattanooga Metairie Madison Stone Mountain Lilburn Atlanta MB ORIGINAL ST CODE APPROVAL RENEWAL REINSTATED CA L NY B FL B TX L GA B FL L GA B GA B 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 FL L GA P GA B GA B GA B GA L AL B TN B LA B AL L GA B GA B GA B 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 12-24-2004 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-05-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 7 . . . . . . . . . . . . . . . . . . . .. LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN AUGUST 2005 ID# COMPANY NAME CITY 20639 20645 20648 20649 20656 20657 20673 20509 20531 20592 20624 20625 20626 20633 20637 20653 20654 20669 20672 20685 20703 20534 20582 20598 20614 20621 20636 20655 20701 18695 19097 Residential Lending of MD Diversion Enterprises, LLC Calverton Suwanee Easy Home Loans, Inc. Rincon Kerling Menard Eldred Lithonia Real Property Mtg Co, LLC Decatur Benjamin Scott Terry Macon Shades Of Green Mtg Co Locust Grove Clayton Peters and Assoc, Inc. Towson Joseph Mann, Jr. Columbus Will Daniel Wren Duluth Yolanda Rivera Atlanta Dreamland Mortgage, LLC Ellenwood First Mutual Home Loans Corp Atlanta AZ Mortgage Service, LLC Chamblee James F. Partlowe Gainesville NorthPoint Capital Roswell Ryan David Luelf Atlanta Hargrow & Associates, Inc. Ann Arbor Assurance Financial Group, LLC Baton Rouge First Integrity Lending, LLC Lawrenceville EBS Mortgage, LLC Winston United Mtg & Loan Inv, LLC Charlotte Hunter Financial Group, LLC Tempe Mtg Professionals, Inc. (DE) Hatboro Tristone Financial, LLC Alpharetta Labrescia Dawson Lawrenceville Amanda Reeves Palmer Donalsonville Platinum Mtg Funding of FL, Inc. Naples Clocktower Mortgage Company, Rome BI ach Consulting, Inc. Destin Structured Mtg Svcs, Inc. MARIETTA TOTAL: 52 MB ORIGINAL ST CODE APPROVAL RENEWAL REINSTATED MD L GA B GA B GA B GA B GA B GA B MD B GA B GA B GA B GA B GA B GA B GA B GA L GA B MI B LA B GA B GA B NC L AZ L PA L GA B GA B GA B FL B GA B FL B GA B 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-26-2005 08-26-2005 08-26-2005 08-26-2005 08-26-2005 08-26-2005 08-26-2005 08-26-2005 10-03-2003 02-27-2004 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-12-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-19-2005 08-26-2005 08-26-2005 08-26-2005 08-26-2005 08-26-2005 08-26-2005 08-26-2005 08-26-2005 08-19-2005 08-26-2005 08-19-2005 08-26-2005 MB CODES B = BROKER L = LENDER R = REGISTRANT * Upgrade Broker to Lender + Downgrade Lender to Broker # Upgrade Lender to Registrant Downgrade Registrant to Lender 8 . . . . . . . . . . . . . . . . . . . ..