Georgia Department of Banking & Finance NON-DEPOSITORY FINANCIAL INSTITUTIONS Monthly Summary of Mortgage Activities For the Period Ending January 2007 INSIDE THIS ISSUE 2007 Housekeeping Bill 1 Advertising & Marketing 1 EXAMINATION ISSUES Fraud Programs 2 LICENSING & ADMINISTRATION Continuing Education Programs 2 FY 2008 Renewals/HMDA 3 Administrative Actions & Fine Data 4/5 Licenses Revoked, Expired...Denied 6 Licenses Approved & Reinstated 7 2990 Brandywine Rd. Suite 200 Atlanta, GA 30341 Phone: 770.986.1269 NEWS ITEMS 2007 Housekeeping Bill The Department's Housekeeping Bill for this legislative session is Senate Bill 70. In addition to some basic housekeeping changes, 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 below for your reference. A complete markedup version of the housekeeping bill can be found on the internet at: http://www.legis.ga.gov/ legis/2007_08/fulltext/sb70.htm Proposed Amendments Article 13 Licensing of Mortgage Lenders and Mortgage Brokers 7-1-1001 The proposed change removes the availability of a licensing exemption for a person, other than a natural person, to make five or fewer loans per year. 7-1-1004 This amendment requires licensees and applicants to commence performing background checks within ten days of the initial hire of an employee. In addition the timeframe in which the Department may not issue a license or may revoke a license from an applicant or licensee that employs any person against whom a final cease and desist order has been issued has been extended from three to five years. education approval on any ground on which it might refuse to issue an approval. The amendment includes a provision that any notice or final order sent by certified mail that is returned to the Department as "refused" or "unclaimed" will be deemed to have been received by the addressee. 7-1-1006 This amendment eliminates branch application approval by operation of law if an application is not acted upon by the Department within 30 days. 7-1-1008 7-1-1018 This amendment includes a provision that any notice or final order sent by certified mail which is returned to the Department as "refused" or "unclaimed" is deemed to have been received by the addressee. This amendment requires that a person who directly or indirectly acquires 10% or more of the ownership of a licensed entity must follow certain approval steps. The prior provision set the ownership threshold at 25%. Advertising & Marketing 7-1-1009 This amendment clarifies that a licensee should maintain separate personal and business records. 7-1-1016 This amendment provides language prohibiting the use of loan information pertaining to a designated individual in advertisements without required disclosures being made. 7-1-1017 Language has been added to allow the Department to suspend or revoke a mortgage broker The Department continues to receive complaints regarding solicitations from licensees to consumers that use a consumer's existing loan information to entice the consumer to refinance with it, "the un-named company" that has sent the solicitation, and get out of their existing loan with the licensee named in the solicitation, the current mortgagee. These solicitations generally result in fine assessments against licensees for various violations of GRMA. Much of the problem seems to stem with the marketing company itself, which touts this "covert" advertising style as a good way to get a concerned consumer to call, (Continued on page 2) Continued on Page 2 Monthly Summary of Mortgage Activities For the Period Ending January 2007 Page 2 Advertising (Continued from page 1) after thinking there is a problem with his or her existing mortgage. However, the remainder of the problem stems from licensees themselves, who apparently forget the provisions of 7-1-1016 which, in addition to prohibiting false and misleading advertising, also prohibits advertising that does not include, among other items, a valid address of the licensee, the license number, and the indication that the company is a Georgia Residential Mortgage Licensee. Should the proposed provisions of the 2007 Housekeeping Bill be approved, the detailed requirements regarding advertisements will require more due diligence on the part of the offending licensees to disclose their part in these solicitations, perhaps alleviating the consumer concerns that come from them. EXAMINATION ISSUES Does Your Fraud Prevention Program Measure Up? In recent months, the State of Georgia has relinquished its #1 position for the #3 position on the list of states in which mortgage fraud is the most prevalent. While the Department is happy to give up the #1 position, mortgage fraud detection and prevention continues to be our priority. For the Department, what constitutes mortgage fraud can be found under O.C.G.A 7-1-1013 (1)(2) and (6). These sections state, in part, that it is prohibited to misrepresent the material facts; conceal or cause another party to conceal material facts; or to engage in any transaction, practice or course of business which is not in good faith, or which operates a fraud upon any person. Such misrepresentations are those used in the loan process which may influence a mortgage lender to approve an application which would have otherwise been declined. The examiners often find misrepresentations of occupancy, misrepresentations of employment or income, or failure to disclose previous loans. The Department's recourse is imposition of fines and possible administrative action, and might also include referrals to local or state law enforcement authorities. As a mortgage licensee in the State of Georgia, it is your responsibility to develop and implement a mortgage fraud detection program that reduces the incidence of mortgage fraud. Fraud prevention begins with the implementation of a sound quality control program that is able to detect fraud at several different stages of the loan process. This process should include, but is not limited to: frequent auditing of in-process loan files; conducting review appraisals; using only approved closing attorneys; verifying income and asset information; and preventing any one employee from controlling the mortgage transaction from beginning to end, thereby establishing the separation of duties between loan officers, processors and other staff. The Department's Mortgage Examiners will want to review your fraud prevention policies and procedures during an examination. Should you have any questions about your internal quality control procedures or if you would like to report any fraudulent activities, please contact the Department at 770-986-1136 and ask to speak to a mortgage examiner. LICENSING ISSUES Continuing Education Programs Please see the December, 2006 Mortgage Monthly Summary for all of the specific requirements regarding the Continuing Education requirements for license renewals. That publication can be found on the web at http://www.ganet.org/ dbf/bulletins.html. The purpose of this article is to answer some of the questions regarding continuing education that many licensees been asking, particularly regarding the approved providers and the acceptable methods by which the credit hours can be delivered and earned. The regulation concerning continuing education addresses these issues. 80-11-4-.01 Initial Experience and Education Requirements; Continuing Education. Paragraph (7)(c) states: Seminars, courses or classes sponsored and approved by mortgage-related state and federal regulatory agencies, the National Association of Mortgage Brokers (NAMB), state and federal regulated lenders and their affiliates or professional associations, all of which must be recognized by the Department as proper providers of education requirements ("approved providers"). Requirements may be satisfied at monthly association meetings, conventions, seminars or through electronic means provided the subject meets the requirements of this Rule. For purposes of continuing education, instructors and speakers at seminars, conventions or classes sponsored by approved providers will not be required to seek Department approval as approved providers of mortgage education classes. Education providers shall assign a certificate number to each attendee of a seminar, course or class. In state providers must keep lists of attendees for at least two (2) years . Note the providers listed above which you can use, and the delivery method, which includes classroom, internet, and computer based delivery. The following should be noted by both providers and attendees regarding the Department's policy on electronic UPCOMING SPEAKING ENGAGEMENTS NDFI Deputy Commissioner Rod Carnes. Supervisory Examiner Diane Hester, and Mortgage Examiner Betty Thomas will be giving a presentation to the Georgia Association of Mortgage Brokers at noon on February 15, 2007 at the Cobb Galleria. Useful Links MORTGAGE FORMS: CODE, REGULATIONS & APPLICATIONS HTTP://WWW.STATE.GA.US/ MORTGAGE_FORMS.HTML UPDATING LICENSE INFORMATION HTTP://WWW.STATE.GA.US/ DBF/MORTGAGE_FORMS.HTM L#ONLINE PRESS RELEASES HTTP://WWW.GANET.ORG/D BF/BULLETINS.HTML (Continued on page 3) Continued on Page 3 Monthly Summary of Mortgage Activities For the Period Ending January 2007 Page 3 Continuing Education--(Continued from page 2) training delivery: Approved in-state education providers must maintain specific records for at least two years. Licensees must maintain these records for five years, in a form that the Department authorizes. For all computer-based courses, in addition to the materials required by the Regulation, a school should also maintain the following information for each computer-based course: 1. The student's name, the course title, the number of hours taken to complete the course, the particular software version of the course, and the course serial number (if available); 2. A system to verify the completion of each module of instruction within the computer-based course and the date of completion of the course; PASSWORDS: Are provided in your renewal notice. Contact the Department if you misplace this information. INCOMPLETE or "INFORMATION REQUIRED" APPLICATIONS: Should any additional information be required for any renewal, the licensee will be contacted by e-mail or fax ONLY. Renewals requiring additional information cannot be approved until such information is received and approved. All fines and fees must be paid. http://www.ffiec.gov/hmda/guide.htm Reports of calendar year 2006 HMDA data are due March 1, 2007. Any questions or requests for information should be directed to: Assistance Line: (202) 452-2016 Internet E-Mail Address: hmdahelp@frb.gov LATE FILINGS: If you have attempted access but been unable to utilize the on-line system, please contact the Department for instructions to complete your application. HARD COPY FORMS ARE NOT AVAILABLE ON THE INTERNET. Failure to request assistance in a timely manner will NOT prevent the assessment of the late fee if the deadline has passed. 3. The scores for each student for all final examinations for those courses requiring such examinations; and 4. Verification of the above data by the school director/coordinator provided to the licensee for the licensee's recordkeeping purposes. BROKERS ONLY - CONTINUING EDUCATION REQUIREMENT The continuing education reporting requirement is effective with this renewal. HMDA Reporting FY 2008 Renewals The FY2008 on-line license renewal application system will be available beginning mid-February, 2007. ALL licensees MUST complete their application ON-LINE. Licensees should use their USER ID and PASSWORD which will be mailed with the renewal notice in February. Please note the following: PAYMENT: May be made by ACH or credit card ONLY. Banks, savings and loan associations, credit unions, and mortgage and consumer finance companies are required to report HMDA data if they meet the law's criteria for coverage. Generally, whether a lender is covered by HMDA depends on: The lender's asset size (for example, an institution with assets of $34 million or less on December 31, 2004, did not have to collect HMDA data in 2005); Whether the lender has an office in a metropolitan statistical area; and The extent of the lender's housing-related lending activity. In 2005, 8,853 lenders reported 2004 HMDA data. "A Guide to HMDA Reporting: Getting It Right!" which provides guidance on collection and reporting of HMDA data is available at: Continued on Page 4 Administrative Actions For the Period Ending January 2007 CEASE AND DESIST ORDERS--ISSUED Page 4 Classic Home Lending, Inc, Houston, TX (license no. 20780) Cease and Desist Order issued December 19, 2006 became final on January 18, 2007. Crutchfield, Deitra, Riverdale, GA Cease and Desist Order issued December 21, 2006 became final on January 11, 2007. Harrison, E. A. Tony dba Harrison & Associates Cease and Desist Order issued December 1, 2006 became final on January 1, 2007. Losch, Debra, Tierra Verde, FL Cease and Desist Order issued December 21, 2006 became final on January 11, 2007. Losch, Scott, Tierra Verde, FL Cease and Desist Order issued December 21, 2006 became final on January 11, 2007. MBM Capital, Kennesaw, GA (license no. 12480) Cease and Desist Order issued December 7, 2006 became final on January 8, 2007. Murray, Mary E., Richmond Hill, GA Cease and Desist Order issued December 21, 2006 became final January 21, 2007. Roberson, Victor, Smyrna, GA -- Cease and Desist Order issued January 3, 2007, became final January 24, 2007. Sebring Capital Partners, Limited Partnership, Carrollton, TX (license no. 12838) Cease and Desist Order issued December 19, 2006 became final on January 18, 2007. Turner, Shannon, Stone Mountain, GA Cease and Desist Order issued December 21, 2006 became final January 22, 2007. Tuttle, Charles, Covington, GA Cease and Desist Order issued December 21, 2006 became final on January 21, 2007. Walter Mortgage Servicing, Inc., Tampa, FL Cease and Desist Order issued December 21, 2006 became final on January 21, 2007. Washington, Charles L., Cumming, GA Cease and Desist Order issued November 21, 2006 became final on January 16, 2007. Watson, Kelvin (aka "Kevin" and "Calvin" Watson), Jonesboro, GA Cease and Desist Order issued December 21, 2006 became final on January 11, 2007. Continued on Page 5 Administrative Actions For the Period Ending January 2007 Page 5 CEASE AND DESIST ORDERS--LIFTED OR RESCINDED Argent Mortgage Company, LLC, Irvine, CA (license no. 17408) Cease and Desist Order by Consent issued August 16, 2006 was rescinded on January 10, 2007. Nll Capital, LLC, Wauwatosa, WI (license no. 19197) Cease and Desist Order issued November 11, 2006 was rescinded on January 5, 2007. FINAL CONSENT ORDERS --ISSUED None 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 9 Licensees fined for Advertising Violations 4 Licensees fined for Background Checks Violation 4 Licensees fined for Books & Records 1 Licensee fined for Employment of a Felon 2 Licensees fined for Violation of Cease & Desist Order 1 Licensee fined for Failure to Submit to Exam 1 Licensee fined for $6.50 fees not paid 1 Licensee fined for Relocation of office w/o notice 1 Licensee fined for Unapproved Branch 3 Licensees fined for Unapproved Branch Manager 1 Licensee fined forGaFLA Violation 6 Licensees fined Loan Files not properly maintained 6 Licensees fined for Prohibited Acts 2 Licensees fined for Miscellaneous/Other 2 Licensees fined for doing business w/ unlicensed Entity Continued on Page 6 Monthly Summary of Mortgage Activities For the Period Ending January 2007 Page 6 LICENSEES/REGISTRANTS REVOKED, EXPIRED, SURRENDERED, WITHDRAWN OR DENIED ID# NAME IN JANUARY 2007 CODE REVOKED EXPIRED SURRENDERED WITHDRAWN DENIED 6366 ECONOMY MTG INC BD 01-12-2007 6714 AAA MTG & FIN INC BD 01-25-2007 6837 DELTA MTG CO BD 01-04-2007 12480 MBM CAP BD 01-08-2007 12638 TOWN & COUNTRY CREDIT LD 01-02-2007 12838 SEBRING CAP PARTNERS LP LD 01-18-2007 17798 HALLEN MTG CORP BD 18685 AARDVARK FINL INC PD 19249 TOTAL MTG SOLUTIONS LLC BD 19459 LENDING ATL INC BD 20356 HARBOURTON MTG INV CORP LD 20570 JP MTG LLC BD 20780 CLASSIC HM LENDING INC LD 21059 MATRIX FINL LLC BD 21080 EXECUTIVE CAP MTG LLC BD 01-18-2007 01-25-2007 01-12-2007 01-12-2007 01-25-2007 01-12-2007 01-12-2007 01-12-2007 01-02-2007 TOTAL: 15 Continued on Page 7 Monthly Summary of Mortgage Activities For the Period Ending January 2007 Page 7 ID# 22101 22102 22104 20392 22018 22108 22110 22112 22118 22132 21986 22017 22070 22099 22119 22136 22144 22154 22157 22183 22185 22190 22046 22068 22071 22107 22135 22138 22140 22170 LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN JANUARY 2007 COMPANY NAME Financial Help Services, Inc. CITY Lake Wylie MB ST CODE SC L ORIGINAL APPROVAL 01-05-2007 RENEWAL 01-05-2007 Barron Lending, Inc. Gainesvile GA B 01-05-2007 01-05-2007 Millennium Capital Mortgage Corporation Longwood FL L 01-05-2007 01-05-2007 Family Home Loans, LLC * Stone Mountain GA L 07-15-2005 01-12-2007 Kara Eve Garcia Stone Mountain GA B 01-12-2007 01-12-2007 Global Mortgage Financial Group, Inc. 5 Stars Home Loan, LLC Lake Worth Monroe FL B GA B 01-12-2007 01-12-2007 01-12-2007 01-12-2007 Innovative Mortgage Consultants, Inc. Admiral Lending, LLC Baltimore Grand Rapids MD B MI L 01-12-2007 01-12-2007 01-12-2007 01-12-2007 Fulton & Kozak Mortgage Services, LLC Pioneer Mortgage Company Morrow Cleveland GA B TN B 01-12-2007 01-19-2007 01-12-2007 01-19-2007 Lan Van Nguyen Duluth GA B 01-19-2007 01-19-2007 Premier Mortgage Solutions, Inc. Hyattsville MD B 01-19-2007 01-19-2007 Formula Mortgage Corporation Hollywood FL B 01-19-2007 01-19-2007 C K Mortgage Processing, Inc. Duluth GA P 01-19-2007 01-19-2007 Jori Lee Kasher Duluth GA B 01-19-2007 01-19-2007 Multi-State Home Lending, Inc. Laguna Hills CA L 01-19-2007 01-19-2007 Live Well Financial, Inc. Richmond VA L 01-19-2007 01-19-2007 Charter Mortgage Investors, Inc. Decatur GA B 01-19-2007 01-19-2007 American Home Mortgage Ventures, LLC Dollar Investment Corp. of Memphis Metro Mortgage, Inc. Melville Memphis Newnan NY R TN B GA B 01-19-2007 01-19-2007 01-19-2007 01-19-2007 01-19-2007 01-19-2007 Tristar Lending Corp. Davie FL L 01-26-2007 01-26-2007 The Mortgage Firm, Inc. Altamonte Springs FL L 01-26-2007 01-26-2007 North Country Mortgage Corp. Islandia NY L 01-26-2007 01-26-2007 Mortgage Security Network, Inc. Winter Springs FL L 01-26-2007 01-26-2007 Mortgage Affiliates of America, Inc. Danbury CT B 01-26-2007 01-26-2007 Borrower's Advantage Mortgage Corporation First Choice Lending & Investment Company The Funding Network, Inc. Tampa Oakland Park Lawrenceville GA B FL L GA B 01-26-2007 01-26-2007 01-26-2007 01-26-2007 01-26-2007 01-26-2007 REINSTA TED Continued on Page 8 Monthly Summary of Mortgage Activities For the Period Ending January 2007 Page 8 ID# 22196 22211 19197 11919 15256 16444 12465 17138 LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN JANUARY 2007 MB ORIGINAL RENEWAL COMPANY NAME CITY ST CODE APPROVAL Erasamus Land Acquisition Systems, Axis Home Lending Corporation NII Capital, LLC Harborside Financial Network, Inc. Tampa Wauwatosa Wauwatosa San Marcos FL B WI B WI B CA L 01-26-2007 01-26-2007 06-25-2004 10-18-1996 01-26-2007 01-26-2007 01-05-2007 01-19-2007 Western Home Mortgage Corpora- Irvine CA B 12-17-1999 01-19-2007 Sierra Pacific Mortgage Company, Folsom CA L 06-15-2001 01-19-2007 Mortgage Master, Inc. of MassachuAmanda C. Painter Walpole Lake Park MA L GA B 05-09-1997 04-05-2002 01-26-2007 01-26-2007 REINSTA TED 01-05-2007 01-19-2007 01-19-2007 01-19-2007 01-26-2007 01-26-2007 TOTAL: 38 * Upgrade Broker to Lender + Downgrade Lender to Broker # Upgrade Lender to Registrant Downgrade Registrant to Lender MB CODES B = BROKER L = LENDER R = REGISTRANT To receive this publication: This publication is e-mailed monthly to interested parties and is also available from the Department's website at: http://www.state.ga.us/dbf/bulletins.html If you would like to be added to our distribution list, please send an email to: dbfmort@dbf.state.ga.us. Please include your name, company, and phone number. To unsubscribe, please notify the Department at the same e-mail address noted.