Fraud and Prevention

Georgia Continues Cracking Down on Unlicensed Mortgage Companies

By James Comtois
September 23, 2009

In its continuing crackdown on questionable and unlicensed mortgage companies, the Georgia Department of Banking and Finance has already issued four cease-and-desist orders against mortgage companies and mortgage company operators and two consent orders with individuals so far this month.

"We went to a risk-based focus examination in 2003 and the majority of our resources are now spent on mortgage fraud and unlicensed activities," said Rod Carnes, deputy commissioner for nondepository financial institutions. "We only did a handful of administrative actions prior to 2003. Now we do hundreds a year."

Most recently, the department's order issued to Atlanta Home Modification Services LLC, doing business as Atlanta Home Mods in Georgia, became final. The department issued the order after obtaining evidence that Atlanta Home Mods engaged in residential mortgage brokering activities without a license.

Additionally, an order to cease and desist issued by the Georgia Department of Banking and Finance to San Diego-based Peoples First Financial, which was issued after the state of Georgia determined that Peoples First Financial engaged in residential mortgage brokering/lending activities without a license in the state, became final.

The department also issued cease-and-desist orders against Boca Raton, Fla.-based US Mortgage Funding Inc. (doing business as www.usmortgagefunding.org) and Marietta, Ga.-based Michael Surgent (doing business as Trinity Corp.) for engaging in residential mortgage brokering and lending activities without a license in the state of Georgia.

Mr. Carnes could not comment on whether or not further legal action would be taken against these entities. "Those orders are against those who are not properly licensed to do business in the state of Georgia. They may be licensed to conduct business in other states. Our jurisdiction is only in Georgia," he said.

Neither Mr. Surgent nor representatives from these companies responded to requests for comment.

After the department issued a cease-and-desist order against Katrice Wiggins in July 2007 alleging that she made misrepresentations to lenders, earlier in September this year, the department entered into a consent order with Katrice Wiggins to resolve allegations pertaining to violations of the Georgia Residential Mortgage Act.

Included among the terms of the order is a provision that calls for Ms. Wiggins to notify the department of the names and addresses of any Georgia residential mortgage licensees for whom she works over a five-year period. The order also requires her to attend a four-hour department-approved education course in mortgage fraud within a 60-day period.

In addition, the department entered into a similar consent order with Ayana Evans, also to resolve allegations pertaining to violations of the Georgia Residential Mortgage Act. Ms. Evans must also notify the department of the names and addresses of any Georgia residential mortgage licensees for whom she works over a five-year period and attend a four-hour department-approved education course in mortgage fraud within a 60-day period.

"We try to put any public information out there so people can see what these individuals have done," said Mr. Carnes.