Monthly summary of mortgage activities, Sept. 2005

Monthly Summary of Mortgage Activities
Georgia Department of Banking & Finance

Inside this Issue

2

Georgia's "Wet Funding" Statute

2

Continuing Education

Requirements

3

Background ChecksNew Time

Requirements

3

Fraud Reminder

3

Outstanding Orders: Cease & Desist vs

Consent Orders

3

FACTA-Record Disposal Rule

OTHER ITEMS

4

Audit Submission E-mail Addresses

New URLA (1003)

5

Administrative Actions & Issues

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

FOR THE PERIOD ENDING
September 2005
SUMMARY OF ACTIVITIES
MORTGAGE DIVISION
WEB SITE: www.state.ga.us/dbf STAFF: www.state.ga.us/dbf/staff.html

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News Items

GEORGIA'S "WET FUNDING" STATUTE

Licensees are reminded to

review the provisions of Title 44

of the Official Code of Georgia

("O.C.G.A."),

specifically

O.C.G.A. Section 44-14-13, the

"wet funding" statute, which

addresses the loan funding

requirements in Georgia. Title

44 sets the funding requirements

for loans involving purchase

money loans or refinance loans

involving residential real estate,

stating that "the lender shall at

or before the loan closing

deliver loan funds to the

settlement agent either in the

form of collected funds or in the

form of a negotiable instrument

...." It is obvious from this that

loans that are "closed" must be

funded. This code section also

calls for substantial actual and

punitive monetary penalties to

be paid to the borrower in the

event that this section is

violated. Modifications to loan

agreements or documents which

in essence extend this time

period by the lender, particularly

to benefit licensees in those

states without wet funding

provisions, would appear to

possibly violate the provisions of

this code section.

In addition, Rule 80-11-3-.01 (19) states that "The GRMA in O.C.G.A. Section 7-1-1013 (3) prohibits failure to `disburse funds in accordance with a written commitment or

agreement to make a mortgage loan'. If the department finds... that a lender or a broker acting as a lender has failed to disburse funds in accordance with closing documents, which include legally binding executed agreements indicating a promise to pay and creation of a security interest, a fine of $5,000 per transaction may be imposed.

CONTINUING EDUCATION REQUIREMENTS

Just in case you

missed the new

requirements for broker

continuing education, here are

the highlights. For more details

see Department Rule 80-11-4-

.01 - Initial Experience and

Education

Requirements;

Continuing Education.

Hours Required: Brokers must obtain 12 hours of continuing education in a 12 month period prior to the annual renewal deadline.

Qualifying Attendee: Is the individual owner of the licensee, or an employee serving as the primary supervisor or manager of the business.

Qualifying Courses: Those

approved by mortgage

related state and federal

regulatory agencies, NAMB,

state and federally regulated

lenders and affiliates, and

other approved providers.

Includes monthly association

meetings,

conventions,

seminars or those courses

provided through electronic

means, provided the subject

meets the requirements of the rule.

Course Content: 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 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). Licensees will have from January 1, 2006 through April 1, 2007 to obtain initial credits. After that period, April 1 through March 31 will be the period each year to obtain CE hours. Licensees who fail to obtain credit during that period, 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

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not obtained in the make-up period, the renewal will not be approved.
BACKGROUND CHECKSNEW TIME REQUIREMENT
Reminder that Regulation 80-111-.05(1) regarding background checks on covered employees was revised. All employers must submit background information to the proper law enforcement authorities promptly upon initial hire in order to meet the 90 day review requirement. Therefore, the new requirement states that employers must submit the information to the proper law enforcement 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.
FRAUD REMINDER
As fraud continues to be a major problem in the mortgage industry, and with more arrests and convictions taking place, it may be beneficial to again provide licensees the information from the Federal Financial Institutions Examination Council (FFIEC) on fraud prevention and detection.
The white paper entitled "The Detection, Investigation, and Deterrence of Mortgage Loan Fraud Involving Third Parties", provides guidance on the establishment of procedures and best practices to detect and prevent mortgage fraud. The report also identifies mortgage fraud red flags and discusses

ways to stop it. The information is available on the following website: http://www.ffiec.gov/exam/whi tepapers.htm

OUTSTANDING ORDERS: CEASE & DESIST VS CONSENT ORDERS

Licensees have the responsibility to check the Department's website to ensure their potential employees do not have an outstanding Cease & Desist or Consent Order issued by the Department. It is important to note the following regarding Orders issued by the Department.

A Cease and Desist Order

issued to an individual or

other person (company) not

licensed by the Department

keeps that person from

working in the industry for a

three

year

period,

commencing from the date

the order became final.

Licensees against whom a Cease and Desist Order has been issued are able to continue operating in the industry. These orders are generally issued to effect changes in business practices in lieu of license revocation. An exception would be a 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.

Often employees of licensees or the companies themselves are issued Consent Orders. The purpose of the order is

similar to that of 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 are 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/cdo rders.html
You need to be aware that if a prospective employee has an outstanding Consent Order, then request a copy of the Order from the Department to determine exactly what restrictions have been placed on that employee or potential employee regarding working in the industry.
FACTA- RECORD DISPOSAL RULE
A reminder regarding disposal of sensitive consumer information:
Effective June 1, 2005, the FACTA Disposal Rule required businesses and individuals to take appropriate measures to dispose of sensitive information derived from consumer reports.
The Rule applies to people and both large and small organizations that use consumer reports, including lenders; employers, landlords, and mortgage brokers.
The standard for the proper disposal of information derived

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from a consumer report is flexible, and allows the organizations and individuals covered by the Rule to determine what measures are reasonable, based on the sensitivity of the information, the costs and benefits of different disposal methods, and changes in technology.
The FTC has issued a new publication, "New Rule Seeks to Protect Privacy by Requiring Proper Disposal of Sensitive Consumer Information," to educate businesses about the new requirements, available at: www.ftc.gov/bcp/conline/pubs/ alerts/disposalalrt.htm
Other Items
AUDIT SUBMISSION
As you know, the financial standards for licensing were changed with this legislative session. All licensees and registrants, brokers and lenders, must now provide a surety bond.
As a result, submission of audited financial statements to the Department is no longer required.
For those lenders and HUD approved brokers who were still able to use their audited financials for the FY 2006 renewal period, and any other company that has historically provided financial statements as a matter of practice, please note that submission is not required, and the Department asks that you do not send in your financial statement.

Financial statement information is still required for applicants for new licenses.
In addition, Department examiners will continue to review the financial information of the licensee for compliance with Regulation 80-11-2-.02 (g).

E-MAIL ADDRESSES

The Department would like to

remind all licensees that much of

our communications with

licensees is now done via e-mail.

In order for licensees to have the

latest information and for the

Department to contact you on a

timely basis, we need your

current

e-mail

address

information. Changes can be

made on-line for the main

contact receiving mail, for the

complaint contact, and for the

registered agent for service.

We urge you to keep this information current. Please make all updates at:
https://bkgfin.dbf.state.ga.us/Mortg ageDocs/MBContactChng.html

REVISED UNIFORM RESIDENTIAL LOAN APPLICATION (1003)
The U.S. Department Of Housing And Urban Development, in its MORTGAGEE LETTER 2005-39, announced the issuance of a revised loan application form (Fannie Mae Form 1003).
The Uniform Residential Loan Application (URLA), is shared by Fannie Mae, Freddie Mac, the Department of Veterans Affairs, Rural Housing Services, and the Federal Housing Administration

(FHA). Mortgagees may begin using the revised form immediately but must use the new URLA for all loan applications taken on or after July 1, 2006. There are no data changes to the form.
Information and a copy of the form are available from the following website:
http://hudclips.org/sub_nonhud /cgi/nph-brs.cgi?d=MLET&s1=0539$%5BNO%5D&SECT5=MLET&SEC T1=TXTHLB&l=50&u=../cgi/news doc_run.cgi&p=1&r=1&f=G

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Administrative Actions and Issues

CEASE AND DESIST ORDERS Issued

Argent Mortgage Company, LLC, Orange, CA (license 17408) Cease and Desist Order issued August 16, 2005 became final on September 6, 2005.
Bottomline Mortgage, Inc., Monrovia, CA (license no. 13906) Cease and Desist Order issued September 1, 2005 became final on September 22, 2005.
Brinkley, Mitchell III, Macon dba Riverside Brokers, Macon, GA (license no. 18014) Cease and Desist Order issued September 1, 2005 became final on September 30, 2005.
Capital One Mortgage Corporation, Duluth, GA (license no. 14157) Cease and Desist Order issued August 3, 2005 became final on September 1, 2005.
City First Mortgage, Inc. Alpharetta, GA (license no. 17101) Cease and Desist Order issued August 9, 2005 became final September 7, 2005.
Destiny Capital Mortgage Bank, Inc, Irving, TX Cease and Desist Order issued August 8, 2005 became final September 8, 2005.
Dickerson, Brenda dba Dickerson Mortgage, Macon, GA Cease and Desist Order issued August 19, 2005 became final September 19, 2005.
Foundation Mortgage Corporation, Villa Rica, GA (license no. 6182) Cease and Desist Order issued August 18, 2005 became final on September 20, 2005.
Help U Find A Mortgage, Hiawassee, GA Cease and Desist Order issued August 18, 2005 became final September 18, 2005.
Jaa, Teal E. dba InStone Mortgage Services, East Point, GA (license 19439) Cease and Desist Order issued August 18, 2005 became final on September 20, 2005.
Lighthouse Funding Corporation, Tustin, CA (license 13834) Cease and Desist Order issued September 1, 2005 became final on September 22, 2005.
Lorimer, Andrew, Atlanta, GA Cease and Desist Order issued September 6, 2005 became final September 27, 2005.
Matisse, Inc., Doraville, GA (license no. 19634) Cease and Desist Order issued August 26, 2005 became final September 27, 2005.
Matrix Investment Corporation, Groton, CT (license no. 16681) - Cease and Desist Order issued September 1, 2005 became final September 22, 2005.
New Horizon Mortgage Group, Inc. Snellville, GA (license no. 18469) Cease and Desist Order issued August 17, 2005 became final September 14, 2005.

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Parker/Wilson, Mary, Powder Springs, GA Cease and Desist Order issued August 29, 2005 became final on September 20, 2005.
Powell, Donna, Atlanta, GA Cease and Desist Order issued August 24, 2005 became final on September 14, 2005.
Southwestern Mortgage Co., Atlanta, GA (license 19640) - Cease and Desist Order issued August 3, 2005 became final on September 1, 2005.
Wall Street Brokers, Inc., Riverdale, GA (license no. 15098) Cease and Desist Order issued August 3, 2005 became final on September 1, 2005.
White, Paulette, Stone Mountain, GA Cease and Desist Order issued August 18, 2005 became final on September 8, 2005.
Williams, Glenda Cease and Desist Order issued September 6, 2005 became final September 27, 2005.
_____________________________________________________________________________________
CEASE AND DESIST ORDERS Lifted None
_____________________________________________________________________________________
FINAL CONSENT ORDERS Issued Boswell, Damon, Atlanta, GA Suwanee, GA - Consent Order issued September 8, 2005 became final on September 8, 2005. Morton, Candis, National City, CA Consent Order issued September 8, 2005 became final on September 8, 2005. Mortgage Partners, Inc., Atlanta, GA Consent Order issued September 8, 2005 became final on September 8, 2005.
SUPERIOR COURT INJUNCTIONS None

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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

7 Licensees fined for Advertising Violations 3 Licensees fined for Unapproved Branch 1 Licensee fined for failure to respond to
Consumer Complaint

FINE REASON
1 Licensee fined for failure to respond to Consumer Complaint
78 Licensees fined for failure to pay $6.50 Fees 3 Licensees fined for Unapproved Branch Manager

________________________________________________________________________________________________________

LICENSEES/REGISTRANTS REVOKED, EXPIRED, SURRENDERED, WITHDRAWN OR DENIED IN SEPTEMBER 2005

ID# NAME
6182 FOUNDATION MTG CORP 13834 LIGHTHOUSE FUNDING 14157 CAP ONE MTG CORP 15098 WALL ST BROKERS INC 16681 MATRIX INV CORP 17101 CITY FIRST MTG INC 18014 BRINKLEY, MITCHELL III 18469 NEW HORIZON MTG GRP 18635 MTG PARTNERS INC 18740 DIRECT FUNDING INC 19221 PRATHER, MARY ELLEN 19439 JAA, TEAL E 19634 MATISSE INC 19640 SOUTHWESTERN MTG CO
TOTAL: 14

CODE
BD LD BD BD LD BD BD BD LD BD BD BD BD BD

REVOKED

EXPIRED 09-20-2005 09-22-2005 09-01-2005 09-01-2005 09-22-2005 09-07-2005 09-30-2005 09-14-2005
09-20-2005 09-27-2005 09-01-2005

SURRENDERED

WITHDRAWN
09-13-2005 09-08-2005 09-13-2005 09-16-2005

DENIED

LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN SEPTEMBER 2005

ID# COMPANY NAME

CITY

14303 Access Financial Group, Inc. * 20320 New Century Mtg Ventures, LLC 20551 A Plus Financial, Inc. 20574 William D. Runion, Jr.

McDonough Irvine Duluth Duluth

MB

ORIGINAL

ST CODE APPROVAL RENEWAL REINSTATED

GA

L

CA

L

GA

B

GA

B

02-05-1999 09-02-2005 09-02-2005 09-02-2005

09-02-2005 09-02-2005 09-02-2005 09-02-2005

7

. . . . . . . . . . . . . . . . . . .

LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN SEPTEMBER 2005

ID# COMPANY NAME

CITY

20702 Monarch Mortgage, Inc. 20722 Lightning Funding, Inc. 20723 Eric Edward Luelf 20724 Lorinda Theresa Montgomery

Asheville Massapequa Atlanta Lithonia

20725 Tanya Leigh Thompson

Marietta

20726 David Dwayne Luelf

Atlanta

20734 Rafael Jose Santiago

Atlanta

6648 Smith Enterprises, Inc.

Hogansville

13499 The Private Capital Group, LLC * Atlanta

15893 DeCarlos Perez Williams

Stone Mountain

20550 Crosspoint Financial, Inc.

Newport Beach

20552 North Point Funding, Inc.

Hampton

20616 ADT Interactive, LLC

San Francisco

20631 Freedom First Mtg & Finance Lawrenceville

20635 United Mortgage Brokerage, Inc. Plainview

20670 Avelo Mortgage, LLC

Irving

20683 Regency Financial Services & 20706 IInternational HI ome Mtg, Inc.

Laurelton Buford

20720 STJ Loan Solutions, Inc.

Doraville

20721 Supreme Mortgage, LLC

Farmington Hills

20758 Delissa Fontaine McAdoo

Stockbridge

20760 DSD Mortgage LLC

Norcross

20761 A Son Never Forgets, LLC

Jonesboro

7502 Beazer Mortgage Corporation * Atlanta

20555 David Etute

Virginia Beach

20570 J. P. Mortgage, LLC

Rincon

20591 Charles Barry Nash

Duluth

20615 US Mortgage Capital, Inc.

Chatsworth

20622 The Prime Finl Group, Inc. (MI) Bingham Farms

20627 Argent Funding Corporation

Orange

20641 Mortgage Funds Direct, LLC

Roswell

20647 Family America Mtg Group, Inc. Coconut Grove

20674 Your Mortgage Source, LLC

Norcross

20728 Barry M. Cobb

Lithonia

20729 Terri Denise Josey

Snellville

20743 SNGC, LLC

Eureka

20744 SNBOA, LLC

Eureka

20745 Del Norte Refi, LLC

Eureka

20746 SN Commercial, LLC

Eureka

20762 Blue Point Funding, LLC

Norcross

20770 Meridias Capital, Inc.

Henderson

20786 Lending Solutions, Inc.

Duluth

20788 Eagle Lending Corporation

Alpharetta

15698 Park West Mortgage, Inc.

Atlanta

19939 Nationwide Realty & Mtg, Inc. Marietta

MB

ORIGINAL

ST CODE APPROVAL RENEWAL REINSTATED

NC

B

NY

B

GA

B

GA

B

09-02-2005 09-02-2005 09-02-2005 09-02-2005

09-02-2005 09-02-2005 09-02-2005 09-02-2005

GA

B

09-02-2005

09-02-2005

GA

B

09-02-2005

09-02-2005

GA

B

09-02-2005

09-02-2005

GA

B

09-24-1993

09-09-2005

09-09-2005

GA

L

05-01-1998

09-09-2005

09-09-2005

GA

B

07-28-2000

09-09-2005

09-09-2005

CA

B

09-09-2005

09-09-2005

GA

B

09-09-2005

09-09-2005

CA

B

09-09-2005

09-09-2005

GA

B

09-09-2005

09-09-2005

NY

B

09-09-2005

09-09-2005

TX

R

09-09-2005

09-09-2005

NY

B

09-09-2005

09-09-2005

GA

B

09-09-2005

09-09-2005

GA

B

09-09-2005

09-09-2005

MI

B

09-09-2005

09-09-2005

GA

B

09-09-2005

09-09-2005

GA

B

09-09-2005

09-09-2005

GA

B

09-09-2005

09-09-2005

GA

L

12-29-1995

09-16-2005

VA

B

09-16-2005

09-16-2005

GA

B

09-16-2005

09-16-2005

GA

B

09-16-2005

09-16-2005

CA

L

09-16-2005

09-16-2005

MI

L

09-16-2005

09-16-2005

CA

L

09-16-2005

09-16-2005

GA

B

09-16-2005

09-16-2005

FL

B

09-16-2005

09-16-2005

GA

B

09-16-2005

09-16-2005

GA

B

09-16-2005

09-16-2005

GA

B

09-16-2005

09-16-2005

CA

L

09-16-2005

09-16-2005

CA

L

09-16-2005

09-16-2005

CA

L

09-16-2005

09-16-2005

CA

L

09-16-2005

09-16-2005

GA

B

09-16-2005

09-16-2005

NV

L

09-16-2005

09-16-2005

GA

L

09-16-2005

09-16-2005

GA

B

09-16-2005

09-16-2005

GA

B

06-23-2000

09-23-2005

09-23-2005

GA

B

01-14-2005

09-23-2005

09-23-2005

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LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN SEPTEMBER 2005

ID# COMPANY NAME

CITY

20445 The Loan Page, Inc. 20544 CBAC Funding LLC

San Francisco Stamford

20593 Christine Lee Dubose

Duluth

20618 Ryan David Hudson

Gainesville

20638 ResMae Mortgage Corporation Brea

20640 Fast Track Funding Corp.

Hicksville

20652 U S Direct Finance

Lilburn

20704 Alliance Commercial Group, LLC Duluth

20708 Ameri Dream Mortgage, LLC

Lilburn

20730 Joseph Vincent Rutowski, Sr. Duluth

20750 Home Mac Mtg Corporation

Atlanta

20752 Millenium Mtg Solutions, LLC Snellville

20755 Integrity First Funding Group, 20765 HI & H Mortgage Services, Inc.

Dunedin Richmond Hill

20766 By Design Financial Svc, Inc. Columbus

20768 Jeremy Daniel Pennington

Rising Fawn

20785 First Capital Funding Group, LLC College Park

20787 Summit Mortgage Corp.

Chicago

15290 ABC Mortgage Services, Inc.

Augusta

19083 Community Resource Mtg, Inc. Columbia

20642 New York Mtg Funding, LLC

New York

20705 Legacy One Mtg Group, Inc.

Marietta

20739 Norvic Mortgage, LLC

College Park

20753 Z Best Mtg & Realty Solutions, Smyrna

20795 LSH, Inc.

Decatur

TOTAL: 74

MB

ORIGINAL

ST CODE APPROVAL RENEWAL REINSTATED

CA

B

CT

L

GA

B

GA

B

CA

L

NY

B

GA

B

GA

B

GA

B

GA

B

GA

B

GA

B

FL

L

GA

B

GA

B

GA

B

MD

L

IL

L

GA

B

SC

R

NY

L

GA

B

GA

B

GA

B

GA

B

09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 01-07-2000 12-05-2003 09-30-2005 09-30-2005 09-30-2005 09-30-2005 09-30-2005

09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-23-2005 09-30-2005 09-30-2005 09-30-2005 09-30-2005 09-30-2005 09-30-2005 09-30-2005

09-30-2005 09-30-2005

MB CODES B = BROKER L = LENDER R = REGISTRANT

*

Upgrade Broker to Lender

+

Downgrade Lender to Broker

#

Upgrade Lender to Registrant



Downgrade Registrant to Lender

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