Moses Lake mortgage manager settles violation claim

Freestand Financial surrenders broker license

MOSES LAKE - The case was settled in determining whether an Arizona mortgage broker and its Moses Lake branch manager violated a state broker practices act.

Documentation from the state's Department of Financial Institutions, entered Aug. 1, 2006, showed respondents Phoenix, Ariz.-based Freestand Financial Holding Corp., the company's president and designated broker Jesse A. Gee and branch manager Donald Parker never applied for or received a license from the department to conduct business under the unlicensed name of Basin Brokerage at 413 Sharon Ave. E., where they located March 7, 2006. The company also advertised under that name in local print media and maintained a Web site.

Gee declined to comment. Parker's attorney, John Luke McKean, did not return phone calls seeking comment.

According to consent orders from the department, issued Monday, Freestand Financial and Gee immediately surrendered their mortgage broker licenses.

Gee shall be prohibited from conducting affairs of any licensed or unlicensed mortgage broker for three years, including any financial capacity, active or passive; as an officer, director, principal, designated broker, employee or loan originator or any management, control, oversight or maintenance of any trust account, according to state records.

Gee shall not apply to the department for any license under any name for a period of three years, according to state documents.

He will pay to the department an investigation fee of $1,120.44 and promptly pay the sums of $10,400 directly to A-1 Appraisals in Moses Lake and $1,950 directly to Cutter Company Appraisal to resolve issues raised in complaints of unpaid appraisal fees, according to state records.

"They will be out of the business for three years," said Deb Bortner, director of consumer service for the department. "(Gee) has to resolve his third-party complaints, which means he has to pay for the appraisals he got."

Bortner said this is a very common consent order for this type of scenario.

Gee and Parker waived their rights to a hearing and voluntarily entered into the consent orders and Parker agreed to withdraw an appeal, according to the state.

Under the order, Parker is prohibited from participating in the conduct of the affairs of any licensed or unlicensed mortgage broker for 10 years, including any financial capacity, active or passive; as an officer, director, principal, designated broker, employee or loan originator or any management, control, oversight or maintenance of any trust account.

He shall not apply to the department for any license issued pursuant to state law under any name for a period of 10 years, according to state records.

"Ten years is actually quite a long time," Bortner said.

While she was not in the division when the original documentation was issued, Bortner said the length of the prohibition may come from Parker's making representations to the department which he knew at the time were false.

"Just for unlicensed activity, 10 years is longer than we normally see, but when you add unlicensed activity and then lying to us about the fact he actually wasn't doing business or he wasn't advertising in a certain way, that really adds on," she said. "People do that knowingly. Sometimes people operate without a license unknowingly, because they don't know the law."

Failure to abide by the terms and conditions of the consent order may result in further legal action, she added.

Before doing business with someone, Bortner recommends checking with the department to see if they have a license and shopping for their mortgages.

"There's a lot of people out there holding themselves out as being able to help people get loans and they're not always acting in the best interest of the borrower," she said. "If something bad happens, we can certainly take action against someone who's licensed, but we generally can't do much when there's an unlicensed person."

Bortner said there were no allegations from the people who did receive a mortgage from Freestand Financial received mortgages which were unfair.