|Was it dumb luck, or just dumb, that a California mortgage company illegally solicited Nevada's top mortgage regulator for loan?
Whatever the case, actions by the mortgage company brought about a stern legal rebuke and a hefty $10,000 fine.
A few months ago Scott Bice, commissioner of the Nevada Mortgage Lending Division, had warned corporate officers at Dana Capital Group of Laguna Woods, Calif., that it is illegal for companies without a Nevada license to solicit business in the state.
Dana, which operates a mortgage office in Las Vegas, has been soliciting business through direct mail sent from its California office.
"Several months ago, the commissioner spoke with (Dana Capital's) corporate officers in California about their unlicensed activity in Nevada," Amada Getzoff, a program officer with the Nevada Mortgage Lending Division, said in a written response to MortgageDaily.com.
"The company is licensed in about 48 states, so they thought that because (Dana) has a licensed location and agent in Nevada, they could send promotional pieces from California," Getzoff said. "The commissioner explained during that phone conversation that Nevada law doesn't allow out of state solicitation and, additionally, all mortgage advertising -- including direct mail -- to be used in Nevada and must have (state) approval prior to release."
Bice said the state would take no action as long as Dana "immediately stopped such activity," Getzoff said.
So imagine Bice's surprise when, about two months later, he received a direct mail solicitation from Dana Capital at his home.
"Congratulations," the letter stated. "Due to the dramatic rise in property values you can now receive a better loan program than the one you currently have."
Bice was solicited to take out a 30-year fixed payment adjustable rate mortgage.
Instead of taking an application, Bice took quick action.
Bice immediately issued a cease and desist order against Dana that claimed the company "violated (Nevada law) because it has solicited Nevada business from an unlicensed location in California," according to a copy of the order.
Dana was also fined $10,000, Getzoff said.
Calls to Dana's corporate office were referred to the company's Nevada officer. Those calls were not returned.
Getzoff said Dana's Las Vegas location and its broker, James Norris, are in good standing with the state. "This action is no reflection of (Dana's) local operations," she said.
Getzoff said Bice and Deputy Commissioner Sue Eckhardt are "highly proactive" in educating Nevada mortgage brokers about the law and their "regulatory obligations and requirements."
"But sometimes, as in this case, regulators have no option if lenders don't pay attention," she said.