Veterans Mortgage Services & Phoenix Funding, Inc. close operations
By PATRICK CROWLEY
4/18/2003

Two mortgage brokerage companies are no longer allowed to do business in the state of Ohio.

The Ohio Department of Commerce Division of Financial Institutions has revoked the registrations of Veterans Mortgage Services of Columbus and Phoenix Funding Inc., which had been operating in Piqua.

"These companies broke the law by failing to comply with the Ohio Mortgage Broker Act," Ohio Lt. Gov. Jennette Bradley said in a statement. "We remain vigilant in protecting consumers from unscrupulous mortgage brokers."

Department of Commerce spokesman Dennis Ginty said in an interview said both companies "are out of business" and "should not be operating in the state of Ohio since the registrations to act as a mortgage broker has been revoked."

Both companies have shut down their Ohio operations and could not be reached to comment.

According to a statement from the Department of Commerce, Veterans Mortgage Services had its registration removed for engaging in "improper, fraudulent and dishonest dealings."

The registration was revoked March 4 after regulators determined that Scott Anderson, an employee of the company and husband of the company's operations manager, deposited $25,893 of a client's money in Veterans Mortgage bank account. Anderson promised the money would be invested, according to the state.

The company did not contest that Anderson was not licensed as an investment adviser and that the funds were used for his and the company's benefit.

In addition to losing its registration on March 28, Phoenix Funding was also fined $10,000.

The Department of Commerce said it had faxed the company on two occasions in January announcing regulators would be conducting a scheduled examination of its operations. But when examiners arrived they discovered the main office was closed, a branch had been moved and neither was in operation.

The state determined that Phoenix Funding failed to notify the Division of Financial Institutions of its move and knowingly failed to cooperate with an examination. Both are violations of the Ohio Mortgage Broker Act.

"The company did not request an administrative hearing, and the deadline to challenge or appeal the state's action in court has expired," Ginty said. "So the registration to do business as a mortgage broker in Ohio has been formally revoked."

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