Unlicensed Mortgage Loan Officers Keep Going and Going

Michelle Singletary
Thursday, October 18, 2007 2:30 PM

Recently, I've been reporting on a company that two states - Maryland and Georgia -- have said is operating without a license to originate mortgage loans. Given the current state of the mortgage industry, I think it's important to expose such companies.

Maryland's Division of Financial Regulation ordered Frederick C. Lee Jr. founder of Financial Independence Group, to stop all mortgage-related business after discovering that Lee and his company were originating loans in Maryland without a license.

The order was pretty clear. Lee nor anyone working on behalf of the company is supposed to be taking loan applications.

And yet, one reader e-mailed me to say the company is still conducting business in Maryland.

"One of Mr. Lee's lieutenant's came to my home last week," the homeowner said. "She was introduced to me by a girlfriend of mine. [She] went through her presentation promising that I could make a substantial amount of extra money. [She] took a loan application and I wrote a check for $100.00 to join the 'business.' After sleeping on my decision over night, there were a lot of flags raised the next day."

With Lee's company, it's more like ruby red flags. As I reported in my column this past Sunday, The Get-Rich Pitch, Then the Letdown, former associates of Lee have come forward providing information and documents detailing how Lee and his cohorts have fashioned a mortgage brokering scheme by participating in suspect business activities, multiple company names and false relationships with other financial institutions.

When I began writing about Lee, his company was called Financial Independence Group. Since the troubles with Maryland have surfaced, the company's name has been changed - again - to CashFlo Strategies.

I guess the people who are taking loan applications for this enterprise (whatever it's called lately) must not fear making their home a jail cell. Originating loans in Maryland without a license is a felony and can result in a fine of up to $25,000 and a prison sentence of up to five years, or both.

To read more about my investigation check out:

* A 400 Percent Return In 7 Days? Riiiight (Aug. 26).

* A Mortgage Is for Paying Off (Aug. 30)

* Some Mortgage Originators Skip State Licensing (Sept. 9)

* Maryland Tells Unlicensed Mortgage Firm To Shut Down (Sept. 16)

* The Get-Rich Pitch, Then the Letdown (Oct. 14)

I'm still interested in hearing from anyone who has dealt with this company. E-mail me at colorofmoney@washpost.com.

Also, if you've closed loans since January that were arranged by Lee or someone working on behalf of Financial Independence Group, contact Maryland's Financial Regulation division at 888-784-0136 and ask for Stephen Prozeralik, director of enforcement.

To read Maryland's cease and desist order, click here.

Speaking of Mortgages

Mark your calendars next week for my Web chat with this month's Color of Money Book Club author David Reed. Reed is the author of "Mortgage Confidential: What You Need to Know That Your Lender Won't Tell You" (American Management Association, $16.95). If you ever plan on getting another mortgage or refinancing your home, you might want to read my review of Reed's book, "Help for Home Buyers From the Inside" (Sept. 30).

If you've got a mortgage question, join me Oct. 25 at Noon ET where Reed will take your questions.

Books Worth the Buy

Need real estate advice? Be careful who is giving it reports The Post's Dina ElBoghdady in "Cracking the Books Before You Invest in Advice, Look Closely at Who's Giving It" (Oct. 13).

ElBoghdady explores what you should consider when looking for advice about buying real estate and how to judge which books are best.

One expert in the story says to be especially wary of the increasingly popular get-rich-quick books, particularly the ones that claim flipping houses or, more recently, cashing in on foreclosures, are the way to become a millionaire.

Continue reading the article for more tips in understanding these books.

Ready for Open Enrollment?

Whether you're prepared or not, that time of year is upon us when your employer is asking you to renew, sign-up or make a decision on what to do about your health insurance and other benefits. Not sure what to expect this year or what choices you'll have? Then read my column from last month for an introduction.

Also, last Tuesday, The Post's Health Section put together a very informative package about how individuals are handling their health insurance needs, along with detials onf 2008 changes and what to do if you're uninsured.

Just like last year, consumer-directed health care plans are still being pushed. Here are a few of my columns from last year that may be able to help:

* Before You Get Sick, Shop Around (Oct. 22, 2006)

* Putting Health Options in Alphabetical Order (Oct. 19, 2006)

XM Show

If you can't wait until my next online discussion, join me on the radio. I now host my own radio show, "Singletary Says," every Sunday between 8 and 10 p.m. ET on XM Satellite Radio, Channel 169 The Power!

Even if you don't have XM, call into the show anyway. This is your chance to get your questions answered live. The number is (866) 801-TALK or (866) 801-8255. You can also e-mail your question and I may read it on the air. You can either e-mail me at michelle@xm169thepower.com or at singletarym@washpost.com. Be sure to put "XM" in the subject line.

You are welcome to e-mail comments and questions singletarym@washpost.com. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.