Colorado Board of Mortgage Loan Originators summarily suspends license

 
DENVER (Aug. 11, 2015) –  The Colorado Board of Mortgage Loan Originators unanimously voted to summarily suspend the mortgage loan originator license of M. Gerald (Jerry) Montgomery after staff investigators found evidence of misconduct and license law violations. Montgomery is the owner of Forum Mortgage, Inc.

Staff with the Division of Real Estate, part of the Department of Regulatory Agencies (DORA), received two complaints from Colorado consumers who stated that Montgomery collected up-front “lock fees” which were not refunded, or only partially refunded, when the mortgage failed to close.

A subsequent investigation found several transactions in which the same occurred. The investigation revealed that although Montgomery’s customers were told they needed to pay up-front fees in order to lock an interest rate, the lender on the transactions did not require a fee in order to lock the rate.  Fees paid by Montgomery’s customers were not held in a trust account, and were placed into an operating account where the funds appeared to be withdrawn for business and/or personal use.

“There are stringent requirements for collecting up-front fees 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,” stated Division of Real Estate Director Marcia Waters.  “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.”  As of the date of summary suspension, all monies had yet to be returned to the borrowers.

Among the alleged violations uncovered during the investigation are § 12-61-905.5(1)(q), C.R.S. – Unworthiness & incompetence, § 12-61-905.5(1)(i), C.R.S. – Comingle of funds, § 12-61-911(1)(g), C.R.S. – False or deceptive rate & terms, § 12-61-915, C.R.S. – Shall not receive a fee unless loan obtained.

Montgomery is facing license revocation, fines up to $10,000, and restitution up to $15,821 to be paid within a three-month timeframe.  
 
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About DRE
The Division of Real Estate (DRE) is the licensing, regulation and enforcement agency for the real estate broker, appraiser, community association manager and mortgage loan originator industries.
 
About DORA
The Department of Regulatory Agencies (DORA) is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit www.dora.colorado.gov for more information or call 303-894-7855 / toll free 1-800-886-7675
 

Media Contact:
Eric Turner
Division of Real Estate
p: 303-894-2424