Lenox Financial Mortgage LLC, a technology, marketing, branding and workflow management corporation, was issued a cease and desist order by the Georgia Department of Banking and Finance on Monday.
The department claimed that the Atlanta-based company allegedly was conducting residential mortgage brokering and lending activities without a license or an applicable exemption.
John Shibley, president and CEO of Lenox Financial Mortgage, said he sent a letter to the Department last November voluntarily withdrawing his license because he wanted to change his business model and become a franchisor.
“To be more scalable in this industry, this company needs to deliver our services to franchisees,” Shibley said. “The reality is that we can not run ads in publications and web sites because we get too many phone calls. I am embracing this new business model to circumvent our operational limitations.”
Shibley said the company is dormant right now and is not originating any loans. Phone calls made to the company went straight to an automated voice that said, “due to high call volume, we are unable to assist at this time, please leave a name and telephone number and someone will respond as soon as possible.”
According to Shibley, he tried to set up a meeting with the Department in January to notify them that the company’s web site was still active, but it was not conducting any business relations with clients.
“I was told they were too busy and refused to meet with me to discuss this manner,” Shibley said. “The Department failed to do any investigation before issuing this cease and desist order.”
Pursuant to Georgia law, it is prohibited for any person to directly or indirectly solicit, process, place, or negotiate mortgage loans for others, or offer to solicit, process, place, or negotiate mortgage loans for others without a mortgage license or an exemption from licensure.
According to the state code, it is also prohibited for any person knowingly to purchase, sell, or transfer a mortgage loan or loan application from or to an entity that is not licensed or exempt..
“I have been licensed for 16 years and have always been compliant with the law,” Shibley said. “In my career, I have never had one formal complaint from a customer in Georgia and have had less than 10 consumer complaints from clients nationwide. I don’t understand how I was issued this order when I voluntarily withdrew my license in the state.”
