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State revokes mortgage broker's license

The Georgia Department of Banking and Finance has revoked the mortgage license of Carlos Kavanaugh, president of Georgia State Mortgage. CL wrote in 2004 about Kavanaugh and his company, which allegedly falsified Lithonia resident Shawntell Law-North's home loan application.

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As a result, Law-North almost lost her job at Georgia Federal Credit Union, where she worked as a bank teller. The reason: She applied for a home loan through a broker, Georgia State Mortgage, and the lender later discovered Law-North's income had been exaggerated in the application.

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Law-North didn't fake her income, though. She was duped by a fast-growing component of mortgage fraud: Brokers, unbeknownst to home buyers, jack up applicants' earnings to ensure they'll get approved for a loan.

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In July 2004, the state department began investigating Georgia State Mortgage's actions in Law-North's case, as well as additional allegations that the company employed ex-felons, a violation of the Georgia Residential Mortgage Act. In November, state administrative Judge John Gatto affirmed the department's request to revoke the company's license, noting that Georgia State Mortgage failed to do sufficient background checks on its employees.

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Sandra Sheley, the department's director of mortgage supervision, says revocations of nine brokers' licenses became final in 2005.

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Law-North, who now works at United Community Bank in Covington, says she's glad Georgia State Mortgage is no longer in operation. "It took awhile," she says, "but it all worked out."




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