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States Stop Unlicensed Originations

States Stop Unlicensed Originations

4 states punish mortgage companies

April 27, 2007


photo of Patrick Crowley
Two Oregon mortgage providers have been ordered to pay nearly $60,000 in fines and stop “unlicensed activity”, state regulators demanded in a stern order. Meanwhile, mortgage licensees in three other states faced fierce actions from state regulators.The Oregon Department of Consumer and Business Services issued a $50,000 fine and cease and desist order to Local Point Financial of Portland. The department said in a statement it took the action after determining the company was engaged in “unlicensed activity and fraud in mortgage lending.”

Regulators said they discovered the company was offering mortgage loans through unsolicited fax transmissions while “not licensed to make or offer Oregon residential mortgage loans.”

“Several consumers were given a Portland address for Local Point Financial that did not exist,” the department said.

In an unrelated case, Clayborn Collins was ordered to “cease and desist” and fined $17,500 by the department. Collins is accused of requesting several residential property appraisals using the names of other licensed loan originators.

Collins, the department said, is not a licensed loan originator. He is also alleged to have submitted false information in his loan originator application, the department said.

Collins consented to the order. Half of his fine will be suspended if he complies with the order and does not violate the state’s mortgage laws, the department said.

In Idaho, the state’s Department of Finance has issued a cease and desist order against Strategic Lending, a Utah lender not licensed to operate in Idaho.

Regulators were tipped off after receiving a notice that the company was hosting a seminar in Boise. A state investigator attended the seminar and later visited the company’s local office.

“The investigator reported that representatives of the company both at the seminar and at the company’s local office offered to take mortgage loan applications and provide mortgage loans, while they were not licensed to do so under Idaho law,” regulators said.

The company was ordered to stop offering loans until it is licensed.

New Jersey Banking and Insurance Commissioner Steven Goldman has banned two defunct subprime lenders from doing business in the state.

Goldman said in a statement that LoanCity Inc. of San Jose, Calif., and SouthStar Funding of Atlanta, have lost financial backing and are unable to fulfill existing loan obligations. Regulators are still trying to determine how many loan applicants are affected. The state is pursuing legal action against both companies.

LoanCity closed down on March 20, according to a message on its Web site, while SouthStar announced earlier this month it ceased operations.

“There is evidence that New Jersey consumers have entered into loan agreements with these entities when, in fact, they have no funding to back these agreements,” Goldman said. “To protect the interests of these consumers and to prevent others from falling into similar situations, it is necessary to take quick and immediate action via the legal system.”

Goldman said his department is working with state lawmakers and industry trade groups “to determine if a more extensive licensing procedure” is needed in New Jersey.

In Georgia, cease and desist orders against two mortgage brokers have become final, according to a statement from the state’s Department of Banking and Finance.

An order was issued against Amelda Y. Cross, who was doing business as A&N Investment Group in Marietta, after regulators said she was brokering loans without a license.

State regulators said Sheila Hines of Atlanta was ordered to stop conducting business for misrepresenting material facts “likely to induce” a borrower to take a loan; concealing information about mortgage transactions; and “engaging in a course of business not in good faith.”


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

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