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Unlicensed Online Marketing

Unlicensed Online Marketing

Freestand, Basin Mortgage named in filing

October 30, 2006

By PATRICK CROWLEY

photo of Patrick Crowley
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.But state regulators are continuing to investigate if Donald Parker and Jesse A. Gee, president of Freestand Financial Holding Corp., broke the state’s mortgage laws by operating Basin Mortgage in Moses Lake, WA.

“It’s more clerical errors than anything,” Parker said in an interview with MortgageDaily.com. “I’d call it an oversight. We’re trying to clear it up. It has cost me a lot of business and lot of time … but we’re trying to resolve it now.”

In an official filing, the State of Washington Department of Financial Institutions Division of Consumer Services confirmed that it has launched an investigation of Basin Brokerage and Freestand Financial, which is based in Arizona.

Both Gee, who could not be reached to comment, and Parker are named in the filing.

The state has alleged that Basin was unlicensed, broke mortgage laws by advertising under an unlicensed name 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.”

Parker said he did not do such things and is anxious to make his case to the state.

In both his response to the state and in the interview, Parker said Basin Brokerage was only a Web site, not a broker. The actual brokerage was a net branch of Freestand Financial.

“We explained to them … that Basin is just a marketing tool to drive traffic to the Web site. We are in the Columbia (River) Basin. Their concern was if we were closing any loans, and we were not closing any loans,” he said.

The state says Basin was also used in print advertisements and in the local telephone book. Basin was also involved in assisting at least seven buyers in obtaining mortgage loans. The transactions generated $20,204 in mortgage loan fees paid to Freestand Financial, the state said.

The state is attempting to remove Freestand Financial’s license and is contemplating fines of up to $35,400.

Parker said he notified Freestand that it had to comply with state regulations, but it failed to do so.

A story about the complaint was in the local press; Parker said it caused him embarrassment.

“I’ve been getting a lot of phone calls, and I’m trying to maintain my credibility,” he said. “I’m working to get this resolved.”


Patrick Crowley is a feature journalist and blogger for MortgageDaily.com. He is also a reporter, blogger and columnist for The Cincinnati Enquirer.
e-mail Patrick at: PatCrowley@MortgageDaily.com

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