NDFI MONTHLY MORTGAGE SUMMARY April 2009 Georgia Department of Banking & Finance-- Non Depository Financial Institutions Division MonthlyMoSnutmhmlyaSryumomf MaroyrtogfaMgoerAtgcatgiveitAicetsivfiotrietshefoPr etrhieodPeErnidoidngEnAdpirnigl A20p0ri9l 2007 Inside this issue: Page 1 NEWS STATE & NATIONAL NEWS ITEMS STATE/NATIONAL Letters of Credit 1 Georgia's S.A.F.E Bill 1 New GFE & HUD-1 2 Other News 3 Customer Service Stars 4 ADMINISTRATIVE ITEMS Administrative 5Actions 6 Fines 7 Licenses Approved & Reinstated 7 Licenses Revoked, Expired...Denied 8 Contact Information 9 Useful Links MORTGAGE FORMS: DBF.GEORGIA.GOV/ DBFMTGFORMS UPDATING LICENSE INFORMATION DBF.GEORGIA.GOV/ DBFMTGFORMS MORTGAGE SUMMARY DBF.GEORGIA.GOV/ DBFMTGSUMMARY LETTERS OF CREDIT GEORGIA S.A.F.E BILL SIGNED LICENSING USE DISCONTINUED Effective July 1, 2009, the Georgia Residential Mortgage Act ("Act") will require all residential mortgage lenders and mortgage brokers to operate under a valid surety bond. [O.C.G.A. 7-11003.2]. Licensees, registrants, and applicants must have and maintain a valid surety bond in a form and terms acceptable and payable to the Department in the amounts of $50,000 for mortgage brokers/processors and $150,000 for mortgage lenders. In the past, the Department accepted irrevocable letters of credit in lieu of surety bonds pursuant to O.C.G.A. 7-1-1003.2(d). Licensees and registrants using a Letter of Credit to meet the financial standards under the Act have been sent a notice to allow them time to replace their existing letters of credit with a surety bond. As indicated above, effective July 1, 2009, Georgia law will change and the Georgia Department of Banking and Finance ("Department") will no longer be permitted to accept irrevocable letters of credit as an alternative to the surety bond requirement for licensees. Due to this law change, any letter of credit being used will no longer satisfy the licensing/registration requirement after June 30, 2009, and to maintain a license/registration which currently utilizes a letter of credit the company must acquire and provide the Department with a valid surety bond A list of companies which offer mortgage surety bonds in Georgia is available at: http://dbf.georgia.gov/00/ channel_title/0,2094,43414745_46387761,00. html. Governor Sonny Perdue has signed H.B. 312, which incorporates the amendments to the Georgia Residential Mortgage Act ("Act") which were made to update the Act to comply with the provisions of the federal S.A.F.E. Mortgage Licensing Act of 2008, a part of the Housing and Economic Recovery Act of 2008. S.A.F.E provides for the licensing of mortgage loan originators through the Nationwide Mortgage Licensing System. This legislation recognizes the need for residential mortgage loan originators to be licensed by the state under S.A.F.E., and for that licensing information to be maintained in a central registry. This bill requires a license apart from the mortgage broker/processor and lender licenses and/or registrations currently required. To view information regarding the bill see: http://www.legis.state.ga.us/legis/2009_10/ sum/hb312.htm For more information and analysis of the SAFE Act, a component of the Housing and Economic Recovery Act (HERA) of 2008, please see information provided by CSBS and AARMR at: http:// www.csbs.org/AM/Template.cfm? Section=SAFE_Act HOME VALUATION CODE OF CONDUCT The Home Valuation Code of Conduct (Code) went into effect, May 1, 2009, and Freddie Mac will no longer purchase mortgages from Sellers who have not adopted the Code. Additionally, for all mortgages with application dates on or after (HVCC--Continued on page 3) Page 2 April 2009 National News Items NEW GFE & HUD-1 The Department of Housing and Urban Development (HUD) has adopted a Final Rule (Rule) November 17, 2008 pertaining to Real Estate Settlement Procedures Act (RESPA) to "Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs." (24 CFR Part 3500, 73 FR 68204). The Rule became effective January 16, 2009, subject to transition periods and subsequent provision delays. OVERVIEW This Rule modifies the HUD-1, HUD-1A, and Good Faith Estimate (GFE). Terminology of the HUD-1 and HUD-1A conforms to the terminology of the GFE. The lines in Section L (Settlement Charges, page 2 of HUD-1, page 1 of HUD-1A) refer to the applicable lines from the GFE. This Rule modifies the definition of "required use" for Affiliated Business Arrangements and for purchase of an Owner's Policy. The new HUD-1 and HUD-1A parallel the GFE. Negotiated discounts, including volume based discounts, but HUD's position is that discounts negotiated by loan originators or other settlement service providers and fully passed on to the borrower are not illegal rebates. EFFECTIVE DATES OF NEW RULE "Average charge" (Average Cost Pricing) is effective January 16, 2009. The revised definition of "required use" of settlement services is delayed until July 16, 2009. Mandatory use of the revised HUD-1 and HUD-1A is effective the earlier of (1) January 1, 2010, or (2) whenever the revised GFE is first used for the loan transaction. It appears that "Any settlement service provider who delivers the new GFE prior to January 1, 2010, will be subject to all of the requirements related to the new GFE, including compliance with the tolerance provisions and use of the required HUD-1/1A." The goal is for a Good Faith Estimate (GFE) that will clearly answer the key questions borrowers have when applying for a mortgage including: This Rule authorizes Average Charge (Average Cost Pricing) for a settlement charge by a settlement service provider. This Rule does not adopt any of the following that had been proposed: Guaranteed Mortgage Package (GMP) Transactions (a guaranteed package price for a comprehensive package of settlement services), but does require aggregation of "adjusted origination charges" (Line 803) and "Title services and lender's title insurance" (Line 1101). Closing Script to be read aloud and explained by the settlement agent, but does require an additional page to the HUD-1 and HUD-1A to compare the GFE and HUD charges and to describe the loan. What's the term of the loan? Is the interest rate fixed or can it change? Is there a pre-payment penalty should the bor- rower choose to refinance at a later date? Is there a balloon payment? What are total closing costs? The Rule defines, and page 3 of the HUD-1 or Page 2 of the HUD-1A reflect, which loan charges may not increase at closing from those provided on the GFE, those that may only increase by up to 10%, and those charge that can change. Forms may be found at: HUD's Standard Good Faith Estimate HUD-1 Settlement Statement HUD-1A Settlement Statement April 2009 Page 3 State News Items RENEWAL ISSUES 2009 CONTINUING EDUCATION I n conjunction with the interim licensing period in place to convert to a calendar year licensing period, the Department will not be requiring that brokers obtain any additional continu- ing education credits in order to file for their 2010 calendar year license. That calendar year licensing period will be November 1, 2009 through December 31, 2009. That filing must be made through the NMLS, and if filed after December 1st a late filing fee of $300 will be assessed. Continuing Education credits will NOT be required for that renewal filing. Renewal applications will be permitted through December 31st, but if not completed by that date, the license will expire. Beginning with the renewal period for the 2011 Calendar Year license, licensees will be required to obtain continuing education. For that period ONLY, credits obtained from April 1, 2009 to Octo- ber 31, 2010 can be used to qualify for renewal. After the 2011 renewal period (filings made November 1 to December 31, 2010), all continuing education credits must be obtained between No- vember 1st thru the following October 31st in order to qualify for the 2012 and future licenses. owned subsidiaries of financial institution holding companies. Most of these the Department was able to correct with NMLS. However, should there be extenuating circumstances regarding an inappropriate type for your company you will be contacted. (HVCC--Continued from page 1) May 1 a seller must represent and warrant that all appraisal reports are obtained in a manner consistent with the Code. The basics of the Code may be found on the Freddie Mac website at: http://www.freddiemac.com/singlefamily/ docs/030308_valuationcodeofconduct.pdf Q&A is available on the Freddie Mac website at: http:// www.freddiemac.com/singlefamily/hvcc_faq.html Freddie Mac is also providing a n on-line webinar covering "Seller Responsibilities: Home Valuation Code of Conduct". Along with the webinar there are materials which can be downloaded to explain the requirements of the Code. Use this session to help you better understand the key elements of the Code as you prepare for changes you may need to make within your organization. LICENSE ISSUES License Name Many licensees who are affiliated with State Farm insurance and who hold mortgage broker licenses often forget that the license is issued to them as an individual, not in their agency name. Gener- ally it is prohibited for the person to do business with State Farm in their agency name--it must be as the individual in order to be properly compensated. For those agents who have mistakenly used their Agency information in their NMLS filing, as your re- newal is being worked, you will be requested to amend your filing to reflect the correct information. License Type HOLIDAY CLOSING The Department will be closed on Monday, May 25, for Memorial Day. Many licensees inadvertently selected the wrong type of Georgia status when applying for their license. Instead of indicating LI- CENSE - broker/processor or lender--many chose REGISTRA- TION. This category is reserved for companies which are wholly Page 4 April 2009 April 2009 State & National News Items DBF's Customer Service Stars It is the Department's goal to provide excellent customer service, meeting and exceeding the expectations of our customers. Along those lines, we would like to recognize the following individuals or groups for going above and beyond in serving our customers: Applications Analyst Susan Nelson and MSB Licensing Staff (NDFI--MSBs): The Department received comments from three customers regarding Susan and the MSB licensing staff stating: "They always called me back whenever I needed anything. Susan Nelson was great. I would call her 5 times a day sometimes and she was never short with me, she always had an answer or would find one for me." and "I received very friendly and quick service. The staff there is great, very helpful. My hat's off to Susan Nelson and Joel Byers. Great job." and "Susan Nelson has been a great help." The Department is the state agency that regulates and examines banks, credit unions, and trust companies chartered by the State. The Department also has regulatory and/or licensing authority over mortgage brokers, lenders, and processors, money service businesses, international banking organizations, and bank holding companies conducting business in Georgia. Our MISSION is to promote safe, sound, competitive financial services in Georgia through innovative, responsive regulation and supervision. Our VISION is to be the best financial services industry regulator in the country Progressive. Proactive. Service-Oriented. CONGRATULATIONS AND GREAT JOB TO THIS MONTH'S CUSTOMER SERVICE STAR!! SPEAKING ENGAGEMENTS--NDFI Deputy Commissioner for Non-Depository Financial Institutions Rod Carnes will be speaking at the following: The Mortgage Bankers Association of Georgia at the Holiday Inn Forsyth in Forsyth, GA on May 12th. The Georgia Financial Services Association at Barnsley Gardens, Adairs- ville, GA on May 18th. Administrative Actions April 2009 Page 5 CEASE AND DESIST ORDERS WHICH BECAME FINAL 1st Virtual Mortgage, LLC, Palm Beach Gardens, FL (license no. 20427) Cease and Desist Order issued March 17, 2009 became final on April 16, 2009. American Finance Partners, LLC, Acworth, GA (license no. 21776) Cease and Desist Order issued March 16, 2009 became final on April 15, 2009. Atlanta Loan Modifications, Inc., Alpharetta, GA Cease and Desist Order issued March 23, 2009 became final on April 23, 2009. Austin, Shawn, Stockbridge, GA Cease and Desist Order issued March 9, 2009 issued April 9, 2009. Enterprise Lending Group, Inc., Lawrenceville, GA (license no. 22532) Cease and Desist Order issued March 25, 2009 became final on April 24, 2009. First Rate Capital Corp.dba Axis Mortgage, Melville, NY (license no. 22426) Cease and De- sist Order issued March 9, 2009 became final on April 8, 2009. Gulfshore Capital, LLC, Fort Myers, FL(license no. 21187) Cease and Desist Order issued March 9, 2009 became final on April 8, 2009. H. E. Service Co., Inc., c/o Pomery & Associates, Anaheim, CA Cease and Desist Order is- sued March 5, 2009 became on April 5, 2009. Indigo Financial Group, Inc., Lansing, MI (license no. 23400) Cease and Desist Order issued March 4, 2009 became final on April 4, 2009. Kivinen, Kalle dba Loan Restructuring Solutions, Chandler, AZ Cease and Desist Order issued March 23, 2009 became final on April 23, 2009. Sam Mahana, Atlanta, GA (license no. 19055) Cease and Desist Order issued March 10, 2009 became final on April 9, 2009. Register, Angela, Marietta, GA Cease and Desist Order issued March 9, 2009 became final on April 9, 2009. Reliant Mortgage Company, LLC, Beverly, MA (license no. 17244) Cease and Desist Order issued March 4, 2009 became final on April 3, 2009. R. J. Welch & Son, Inc., Waycross, GA Cease and Desist Order issued March 10, 2009 be- came final on April 10, 2009. RTL Financial, Inc., Bellevue, WA (license no. 21280) Cease and Desist Order March 25, 2009 became final on April 24, 2009. Page 6 Administrative Actions April 2009 CEASE AND DESIST ORDERS WHICH BECAME FINAL Continued U. S. Foreclosure Relief Corporation, Orange, CA Cease and Desist Order March 5, 2009 became final on April 5, 2009. Your-Best-Rate Financial, LLC (license no. 15697) Cease and Desist Order issued March 26, 2009 became final on April 28, 2009. CEASE AND DESIST ORDERS--LIFTED, RESCINED, WITHDRAWN Armbrust, Margie, Duluth, GA Cease and Desist Order issued March 9, 2009 was withdrawn on April 9, 2009. Roberts, Da Vida M., Lithonia, GA Cease and Desist Order issued February 12, 2009 was with- drawn on April 28, 2009. FINAL CONSENT ORDERS Armbrust, Margie, Duluth, GA Consent Order issued on April 9, 2009 became final on April 9, 2009. Complete Choice Financial Solutions, LLC, Lithonia, GA (license no. 18535) Consent Order issued on April 28, 2009 became final on April 28, 2009. Ojeikere, Oluwole "Joseph" - Lawrenceville, GA Consent Order issued on April 14, 2009 became final on April 14, 2009 Roberts, Da Vida M., Lithonia, GA Consent Order issued on April 28, 2009 became final on April 28, 2009. T&M Business & Financial Services, Inc, Duluth, GA (license no. 6520) Consent Order is- sued on April 9, 2009 became final on April 9, 2009. SUPERIOR COURT INJUCTIONS--ISSUED None Administrative Actions April 2009 Page 7 FINE INFORMATION Information regarding fines assessed against a specific licensee, 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 1 Licensee fined for Employment of a Felon 2 Licensees fined for Background Checks Violation 1 Licensee fined Failure to Fund 3 Licensees fined for Books & Records 1 Licensee fined GaFLA Violation 3 Licensees fined for Acq. Of 10% ownership w/o approval 1 Licensee fined for Relocation of office w/o notice 1 Licensee fined for Failure to submit to an Exam 384 Licensees fined for Renewal File late 1 Licensee fined for Unapproved Change in Management 1 Licensee fined for Miscellaneous/Other LICENSEES/REGISTRANTS APPROVED OR REINSTATED IN APRIL 2009 ID# COMPANY NAME CITY ST MB CD ORIGINAL RENEWAL REINSTATED 23867 23915 Allied Home Mortgage Credit Corporation Leverage Financial, LLC Houston Tampa TX L FL L 23918 Capital Funding Mortgage Com- Chicago IL L pany, LLC 23908 Jonathon R. McCann Waycross GA B 23916 Neighborhood Assistance Cor- Jamaica MA B poration of America Plain 5845 GMAC Mortgage, LLC # Fort Wash- PA R ington 19468 Top Flite Financial, Inc. * Williamston MI L 23907 Fuller Mortgage LLC Acworth GA B 23802 Equity Source Home Loans, LLC Morganville NJ L 23909 Rice Financial Services, LLC Decatur GA B 23929 Sears Mortgage Company, LLC Augusta GA B 23939 BayBurg Financial, Inc. 23940 Watts Limited, LLC Ft. Lauder- FL B dale Monroe GA B TOTAL: 13 04-03-2009 04-03-2009 04-03-2009 04-10-2009 04-10-2009 06-18-1993 07-02-2004 04-17-2009 04-24-2009 04-24-2009 04-24-2009 04-24-2009 04-24-2009 04-03-2009 04-03-2009 04-03-2009 04-10-2009 04-10-2009 04-17-2009 04-17-2009 04-17-2009 04-24-2009 04-24-2009 04-24-2009 04-24-2009 04-24-2009 Page 8 Administrative Actions April 2009 LICENSEES/REGISTRANTS REVOKED, EXPIRED, SURRENDERED, WITHDRAWN OR DENIED IN APRIL 2009 ID# COMPANY NAME 5983 NATIONWIDE FINL CORP CODE BD REVOKED EXPIRED SURRENDERED WITHDRAWN 04-15-2009 DENIED 6289 1ST METRO MTG CO RD 04-22-2009 6520 T&M BUS& FINL SVCS INC BD 04-09-2009 11486 HOME AMER MTG INC LD 04-10-2009 11650 NORTHERN SOLUTIONS INC BD 11712 MTG FINL SVCS BD 04-16-2009 04-08-2009 11886 WINDSOR CAP MTG CORP LD 12184 CHARTER MTG FINL SERV BD 12643 RICH INS & MTG CO INC BD 04-04-2009 04-02-2009 04-08-2009 13802 INNOVATIVE MTG SOLUTIONS BD 15081 MORTGAGEIT INC RD 04-06-2009 04-22-2009 15697 YOUR BEST RATE FIN LLC LD 16509 BEST HM MTGS INC BD 04-20-2009 04-02-2009 17244 RELIANT MTG CO LLC LD 04-032009 18535 COMPLETE CHOICE FINL SOLU BD 04-28-2009 19055 MAHANA, SAM BD 04-092009 20427 1ST VIRTUAL MTG LLC LD 04-162009 21015 MAIN STREET FINL MTG INC BD 21187 GULFSHORE CAP LLC BD 04-082009 21280 RTL FINL INC BD 04-242009 21776 AMER FIN PARTNERS LLC BD 04-152009 22426 1ST RATE CAP CORP LD 04-082009 22527 F&K MTG & FINL SVCS LLC BD 22692 TRINITY MTG GRP LLC BD 04-08-2009 04-02-2009 04-02-2009 23033 ELITE INTL MTG CORP BD 04-17-2009 23400 INDIGO FINL GRP INC LD 23443 SEARS, JENNIFER MARGARET BD 23456 BESTRATE MTG LLC BD 04-042009 04-24-2009 04-23-2009 23819 ALLON HILL LLC LD 04-08-2009 TOTAL: 29 April 2009 Page 9 Georgia Department of Banking and Finance 2990 Brandywine Road Suite 200 Atlanta, Georgia 30341-5565 Phone: (770) 986-1136 Fax: (770) 986-1654 or 1655 Email: dbfmort@dbf.state.ga.us We're on the Web! dbf.georgia.gov LICENSE STATUS CHANJGuEdINgDmICeAnTtO/CRSla&imMONRoTtGifAiGcEatLiIoCnENSE CODES--(In Tables) As a reminder to licensees during the renewal period, O.C.G.A. 7-1-1007 requires reporting to the Department on certain actions brought against licensees, and states the following: "(a) A licLeincseeenssheaSlltgaivteusnoInticdeictoattohresdepartment by r(eMgBistCerDed) -orMcoerrttifgieadgemaLiilcoernstsaetuCtoordyeosver- night delivery of any action which may be brought against it by any creditor or borrower where such action is brought under this article, involves a claim against the bond filed with the department for the purp*oses of cUopmgprliaadneceBwroitkheCrotdoe LSeecntdioenr 7-1-1003 or 7-B1-1004, or involves a clBarimokfoerrdamages in excess of $25,000.00 for a broker and $250,000.00 for a lender and of any judgment which may be entered against it by any creditor or any borrower or prospective borrower, with details sufficient to identify the action or judgment, within 30 days after the commencement of any such action or the entry+of any sDucohwjundggrmadeentL. "ender to Broker L Lender The Department often obtains information regarding judgments and claims from public sources or other regulators, not from the licensee. It is important to remember that such notification to the Depa#rtment bUyptghreadliceeLnseenediesrretoquRireegdisbtyralanwt, and any lPicensee subject to suPchrocclaeimssoorrjudgment must report details to the Department according to the law as noted above. Downgrade Registrant to Lender R Registrant Sign-up to Receive this Publication This publication is delivered to interested parties via e-mail and is also available from the Department's website at: http://dbf.georgia.gov. If you would like to be added to our distribution list, please send an e-mail to dbfpress@dbf.state.ga.us and indicate your name, the company you are with, and your phone number. Also, please indicate which publication(s) you would like to receive. See the list under PUBLICATIONS on our home page.