An Arizona-based mortgage banker will soon cease operations.
Freestand Financial Holding Corp. will stop operations on Aug. 1, MortgageDaily.com learned from Jack Hudock, spokesman for the Arizona Department of Financial Institutions. The lender informed the department through a one-page letter earlier this week.
"They're licensed as a mortgage banker and they're going to stop conducting business as that," Hudock said. He did not have further information.
Several numbers listed for Freestand did not accept calls, including its headquarters in Phoenix, Ariz., several branches, and one for its president and chairman, Jesse Gee. The company did not return MortgageDaily.com's e-mailed requests for comment. Some branches were not immediately available for comment.
The residential lending Web site is not in service. While the site for its commercial arm, Freestand Commercial & Investor Loan Division, still functions, calls did not go through on the listed contact number.
Freestand started as a small mortgage broker in 1994 and eventually expanded to a mortgage banker with over 500 employees and many branch offices throughout the Southwest, according to its Web pages. The company indicated it also acted as a broker on a correspondent basis by brokering loans to preferred lenders.
The department of financial institutions' licensee information stated the mortgage banking license for Freestand's home office began January 6, 2004. Freestand had a total of 24 offices or branches registered with the department as of Friday.
Among its product offerings were interest-only loans, 5/1 adjustable-rate mortgages, option ARMs, and debt consolidation. The company touted it specialized in home equity loans, including lines of credit, no equity loans, as well as investment and multi-unit property loans and less-than-perfect credit purchases/refinances, bankruptcy and foreclosures, and private money loans, according to Web pages.
Last year, the State of Washington Department of Financial Institutions Division of Consumer Services launched an investigation of Freestand.
The state alleged that a Freestand branch was unlicensed, broke mortgage laws by advertising under the unlicensed name of Basin Mortgage and engaged in other "prohibited" acts, including "making a knowingly false statement to the (state), by obtaining property by fraud or misrepresentation, by employing a scheme or artifice to defraud or mislead borrowers or lenders and by engaging in an unfair and deceptive practice."
"It's more clerical errors than anything," a company executive named in that filing told MortgageDaily.com at the time. "I'd call it an oversight. We're trying to clear it up."
Unlicensed Online Marketing
An Arizona-based mortgage broker calls it mainly a clerical error and misunderstanding that the state of Washington believes he was operating an unlicensed mortgage operation.