Originator’s license pulled for nefarious dealings

by Justin da Rosa18 Aug 2015
Denver state regulators have unanimously voted to suspend the license of a mortgage originator who charged clients excessive fees.

“There are stringent requirements for collecting up-front fees,” writes Marcia Waters, director of the state’s Division of Real Estate, “and it would never be acceptable for a mortgage loan originator to charge more for the goods and services than the actual cost charged by the third-party provider.”

The allegations get worse.

“Furthermore, license law prohibits a mortgage loan originator from collecting a fee, commission, or any compensation in connection with a residential loan unless a borrower actually obtains a loan from a lender on the terms and conditions agreed to by the borrower and mortgage loan originator,” Waters continues.

The Division of Real Estate, which is a part of the Department of Regulatory Agencies, received complaints from Colorado homebuyers alleging Gerald (Jerry) Montgomery, owner of Forum Mortgage, charged clients up-front fees to lock into mortgages that were not refunded – or only partially refunded – when the deal fell through.

These fees were not required by the lenders and, once collected, were used by Montgomery for business and personal matters.

The alleged violations charged against the originator are unworthiness and incompetence, co-mingling of funds, false or deceptive rate terms, and receiving a fee when a loan was not obtained.

Along with potentially losing his license, Montgomery is facing a fine of up to $10,000 and $15,821 in restitution.

 

COMMENTS

  • by D ONE | 8/18/2015 4:51:37 PM

    What he did is WRONG... no questions asked. Since government has jumped in and taken over our businesses, our rate of pay, and who we can work for; our income has fell to less than one makes at a fast food restauraunt. LO's are expected to do all work upfront for no pay and hope that the borrower has been honest and they can earn a commission when the mortgage closes. Do they tell attorneys to do the work and get paid IF it goes as expected? Or accountants to do the tax returns and get paid if they get a refund and/or can't find someone else who may get them $20 more?
    We do not get paid hourly. We do not get paid a salary. We work when it is slow or busy; and work ungodly hours when it is busy. If we are somewhat lucky, we get a "draw" which is little more than minimum wage and even get to pay the draw back out of our commission. No matter how far you get behind, the draw has to be paid... so over the slow months, the draw may build to $5000 and then when busy season kicks in, they take the first $5000 you make in commissions. In some cases, it comes out to LESS than minimum wage.

    If we are doing all the work and companies are making so much money, why are we making SO little now? If the government wanted to control it, then shouldn't they have made it mandatory for us to make a wage and not a draw to be paid back? This industry has turned into a joke. Many small businesses forced out - tax paying businesses with tax paying employees! All left to start over and have their income cut 70% or more so that the "big banks" and "big lenders" could control it and not have to pay a fair wage now that there are no options for those people. Such a sad sad state. When there are no experienced LO's left or they are in great shortage and the people cannot get their mortgages funded because inexperienced people who do not know anything are trying to do the job... maybe then things will change. I'm done writing mortgages. Good luck.

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