Mortgage company investigated for falsifying applications

It’s been a year since Shawntell Law-North, a Lithonia bank teller, lost her job due to allegations that she falsified her home loan application — then was reinstated after her employers learned she’d fallen prey to predatory lending.

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Now, the brokerage firm that allegedly tampered with her application ient of Banking and Finance. And in March, the federal government revoked the company’s ability to initiate FHA mortgages.

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Georgia State Mortgage faces two allegations that could lead to the company’s license being revoked: falsifying loan applications and hiring loan officers ineligible to originate loans in Georgia.

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Falsifying loan applications has become a widespread practice in metro Atlanta, forcing predominantly low-income and elderly home buyers into foreclosure, according to attorneys with Atlanta Legal Aid. And seldom does the state have a chance to reprimand brokerage firms for the predatory practice; the companies often incorporate under a new name before the state can act.

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Carlos Kavanaugh, president of Georgia State Mortgage, testified at a July 27 hearing before the state Banking Department that he accidentally hired people he shouldn’t have: “We didn’t have the knowledge needed to figure out that we had hired felons.”

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But the state contends that if Kavanaugh had notified the Banking Department when he purchased Georgia State Mortgage in 2002, he would’ve been aware of such procedures.

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Russ Willard, spokesman for the state attorney general’s office, says victims of falsified applications, such as Law-North, might be called to testify.

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“I just want this company to pay for what it did,” says Law-North, whose home-buying experience was the subject of CL stories in June and July 2004. “They’ve taken advantage of innocent people just trying to buy homes.”






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