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To regulate the financial industry to promote integrity within the industry and to foster economic growth, while providing outstanding consumer support.

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AzDFI urges loan modification companies to obtain mortgage lending licenses.  The Department interprets recent changes in Arizona law to make licensing of loan modification companies advisable.  Without a mortgage lending license, these companies will not be able to employ appropriately licensed loan originators and will have to stop doing business.  To read the detailed analysis in the current regulatory alert, click here.  The regulatory alert also addresses a recent change in Arizona law creating a narrow exception for certain attorneys that offer loan modifications.

Department of Financial Institutions Announces Receivership of First State Bank.  Acting Superintendent Tom Wood announced September 4, 2009 that the Federal Deposit Insurance Corporation (“FDIC”) has been appointed receiver of First State Bank of Flagstaff, Arizona (“FSB”).  FDIC will sell the bank to Sunwest Bank (“Sunwest”), a California state-chartered bank that will honor all the FSB deposits whether or not they are FDIC insured.  Sunwest had no business presence in Arizona before agreeing to buy FSB.  The FSB locations will open Tuesday, September 8, 2009 as branches of Sunwest.  Read the Order appointing the receiver here.  Read the DFI news release here.

DFI announces receivership of Community Bank of Arizona and sale to MidFirst Bank.  Superintendent Rotellini announced August 14, 2009 that the Federal Deposit Insurance Corporation (“FDIC”) has been appointed receiver of Community Bank of Arizona (“Community Bank”).  FDIC will sell the bank to MidFirst Bank (“MidFirst”), a federally chartered thrift that will honor all the Community Bank deposits whether or not they are FDIC insured.  Midfirst has a business presence in Arizona and will grow by acquiring the four Community Bank business locations.  Those locations will open Monday, August 17, 2009 as branches of Midfirst.  Read the Order appointing the receiver here.  Read the DFI news release here.

Landmarc Capital and Investment Company consents to permanent receivership and to cooperate with Superintendent Rotellini in her role as Receiver. On July 9, 2009, Maricopa County Superior Court Judge Robert Oberbillig issued this order appointing Superintendent Felecia Rotellini as Permanent Receiver and prohibiting Landmarc Capital and Investment Company (“Landmarc”) and others from interfering in any way with the Receivership. The Judge’s Order specifically requires Landmarc’s principals and certain employees to cooperate with the Receiver.  Read the order appointing permanent receiver here. Read the Landmarc’s Consent to Entry of the Order Appointing Permanent Receiver and Injunction here. Read the July 14, 2009 news release here.

The Receivership action was commenced on June 24, 2009, when Judge Oberbillig appointed Superintendent Rotellini as receiver for Landmarc because Landmarc was insolvent and had allegedly misrepresented its financial condition to investors and potential borrowers.  The Court’s initial order had set a hearing for Landmarc to contest the receivership action.  Because of Landmarc’s consent, that hearing is unnecessary.  The permanent receivership will allow DFI to protect the interests of Arizona consumers and businesses as efficiently as possible.  This regulatory receivership will permit the Receiver to unwind the affairs of the business with less expense than a bankruptcy. For more details and background information, read Superintendent Rotellini’s original Complaint here; read the Memorandum of Points and Authorities Supporting the Receivership here; read the court’s initial order appointing the receiver here.

DFI revokes Lending House Financial Corp’s. mortgage broker license.  In a Final Decision and Order dated May 14, 2009, Superintendent Felecia Rotellini ordered the Arizona mortgage broker license of Lending House Financial Corp. revoked.  The revocation Decision and Order also ends the legal authority of Lending House’s president Doran Jampolsky to act as a mortgage broker in Arizona.  In the order the Superintendent found numerous statutory violations committed by either the president or the company’s employees.  Among other bad acts, the company facilitated processing of a fraudulent mortgage loan against the home of an Arizona resident using the homeowner’s personal identifying information, accepted more than $7,000 as its mortgage broker’s compensation for the fraudulent loan, and enabled the perpetrator of the fraud to take more than $82,000 in equity from the homeowner in the fraudulent loan transaction.  In addition to the revocation, the company and its president have been ordered to pay a $15,000 civil money penalty as well as $12,420.00 in examination costs plus a late payment penalty calculated from 11/2/08 until paid at $50.00 per day.

Superintendent Felecia Rotellini and Attorney General Terry Goddard sue Arizona car businesses. 
Superintendent Rotellini and Attorney General Goddard have sued two Arizona automotive businesses alleging consumer fraud and violations of the Arizona Motor Vehicle Time Sales Disclosure Act.  According to the suit, filed on June 25, 2009, both LD Automotive Group and 2020 Automotive used deceptive advertising, refusing to sell cars at the advertised price.  That conduct, and other acts, violated the Arizona Consumer Fraud Act.  In addition, the suit alleges that the businesses were not properly licensed under the Arizona Motor Vehicle Time Sales Disclosure Act.  Read the news release here.  Read the complaint here.

Foreclosure Help
how to avoid being a victim of a mortgage loan modification company or a foreclosure rescue scam. The Department of Financial Institutions announces a new addition to this web site called Foreclosure Help. You are invited to check this resource frequently as we add information that will help if you face foreclosure or believe you may. Click here for more information.

DFI issues new Regulatory Alert on Continuing Education requirements to renew Mortgage Broker and Mortgage Banker licenses, as well as RI status.  Read the Regulatory Alert here.  The Alert describes the new continuing education requirements and hyperlinks the user to detailed information elsewhere on the website.  Twelve hours are required with renewal applications submitted by December 31, 2009.

DFI’s proposed Loan Originator Rules detail fees and educational requirements.  Read the Notice of Proposed Emergency Rulemaking here.  This document contains the text of the proposed rules beginning on its page 11, including the pre-licensure course of study, continuing education, and fees for application and licensure.  These rules are posted here for industry guidance, and they are subject to change before final approval.  DFI will post updates on this web page to keep the industry current on this rulemaking.

Department of Financial Institutions Files Law Suit against Unlicensed Fraudulent Foreclosure Rescue Operation.Superintendent of Financial Institutions, Felecia Rotellini, announces that she has filed an action in Maricopa County Superior Court against a foreclosure rescue company for unlicensed activity and deceptive practices.  Richard Winer and his various business operations conducted unlicensed mortgage broker and mortgage banker transactions, damaging hundreds of Arizona homeowners. To read the filed complaint, click here.

Department of Financial Institutions files to revoke license of Mortgages Ltd
On Friday, February 27, 2009 DFI filed a Notice of Hearing to Revoke the license of Mortgages Ltd., an Arizona mortgage banker.   This action is based on numerous statutory violations by Mortgages Ltd.  Click here to read the news release announcing the filing.  Complete details of DFI’s allegations against Mortgages Ltd. are available in the Notice of Hearing.  Click here to read the actual text of the Notice.

Phoenix Mortgage Broker Who Defrauded Seniors Gets Prison Term
Arizona Department of Financial Institutions’ (“DFI”) Superintendent, Felecia Rotellini, announced issuance of a final order prohibiting former mortgage broker and loan originator Rick T. McCullough from working within the financial services industry according to a news release dated August 7, 2008. The Department also worked to secure an indictment of McCulluogh for fraud, theft, and securities law violations. Because of his conviction on those charges, on Friday, November 14, 2008, McCullough was sentenced to three-and-a-half years in prison, seven years of probation, and ordered to pay $343,811 in restitution to his victims.  Read the press release about the sentencing here.

Superintendent Rotellini announces lawsuit against Hurricane Motor Sales
In a news release dated July 30, 2008, Superintendent Felecia Rotellini, Arizona Department of Financial Institutions, announced that DFI has filed a lawsuit against Hurricane Motor Sales, a Tucson used car dealership. The suit alleges that the dealership was operating without a license from DFI while it deceptively induced consumers to buy cars that could not be legally operated in Arizona, deceptively induced consumers to pay Hurricane Motors on loans that had been sold to other lenders, and that the operators knew or should have known their business practices violated Arizona’s consumer fraud act.

Superintendent Rotellini announces recent removal orders
In a news release dated June 25, 2008, Superintendent Felecia Rotellini, Arizona Department of Financial Institutions, announced a list of people the Department removed from the financial services industry since January 2007. These individuals have been found to be unfit to work in any of the financial services industries regulated by the Department.

Freedom Financial license revoked
Superintendent Felecia Rotellini, Arizona Department of Financial Institutions, announced today in a press release that the mortgage banker license of Freedom Financial & Mortgage Services Corporation is revoked.  This important adjudicated order reached the legal conclusion that a borrower’s or a lender’s complicity in misrepresentations does not excuse the license mortgage banker from violations of Arizona law that prohibits misrepresentations in the course of the mortgage banker business. In addition to revocation, the company paid a $25,000 penalty for violation of Arizona statutes.

Superintendent Felecia A. Rotellini announces a Judgment against Virtual Realty Funding Company, L.L.C.
The judgment contains an award of $1.2 Million in restitution and civil money penalties against Virtual Realty Funding Company, L.L.C. and its owner Kenneth D. Perkins for harm caused to Arizona consumers. Virtual Realty and Perkins operated a foreclosure rescue scheme that injured Arizona homeowners who were seeking help to avoid losing their homes in foreclosure. Click here to read the news release. Kenneth D. Perkins has been indicted on 19-counts of defrauding the Department of Housing and Urban Development.  The crimes charged in the indictment carry heavy fines and lengthy prison terms in the event of conviction. Click here to read the indictment.

Superintendent Rotellini – Warns Arizonans not to fall prey to deceptive mortgage advertising
Superintendent Rotellini said in her April 10 warning to Arizonans, “Arizona law prohibits deceptions and misrepresentations, including concealing an essential or material fact in the course of the mortgage business.”

Glendale Man, Woman Indicted in $950,000 Theft Case

Felecia A. Rotellini, Superintendent of the Department of Financial Institutions, announced the conviction and sentencing of Lisa Gorney, 40, and Eduardo Nicholson, 42, both of Glendale, on charges of theft, fraud, and illegally conducting an enterprise. Lisa Gorney was an escrow officer who facilitated mortgage fraud with Nicholson's help. DFI removed her from the financial services industry on June 2, 2008, before the indictment, and then referred the matter to law enforcement.

Contact Information:
	Telephone:	(602) 771-2800	Toll-free: (800) 544-0708
	FAX:	(602) 381-1225
	Postal Address:	2910 N. 44th Street, Suite 310 Phoenix, AZ  85018
		To contact DFI by email, click here

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