LV mortgage bankers criticize state

Friday, July 7, 2000 | 11:20 a.m.

Many Nevada home buyers haven't been able to close real estate deals this week because state regulators delayed issuing license renewals for the state's 500 mortgage lenders.

A deputy commissioner for the state's Financial Institutions Division says many renewals are backlogged because the office can't handle that much paperwork at one time.

But a broker at Summerlin Mortgage who couldn't close a deal Thursday says this is a chronic problem that seems to be worse this year because he claims no licenses were renewed since June 30, when applications were due.

"Because of the (Independence Day) holiday, today (Thursday) is about the first day the delays would affect us," said Ken Kukuda, vice president of Summerlin Mortgage.

He said when he called the Financial Institutions Division in Carson City, he was told that no licenses had been renewed and that Commissioner L. Scott Walshaw was on vacation.

The Financial Institutions Division, an office of the state Department of Business and Industry, monitors state-chartered banks and lending institutions.

"I was told no one else had the authority to approve the renewals or even write a letter saying they had been delayed," Kukuda said.

Walshaw could not be reached for comment Thursday, but Deputy Commissioner Burns Baker said the delay in the renewals was the result of more than 500 applications coming to the agency's office right before the June 30 deadline.

Baker said about one-third of the applications processed by his office were sent out Monday. Because Tuesday was a federal holiday, that meant the first applications probably wouldn't be delivered until Thursday.

"The renewals will go out in the order in which they were received," Baker said. "It's not unusual for any entity that gets heavy volume at certain times of the year to get backlogged. The Post Office can't get all the mail out in one day during the holidays. It's physically impossible for us to do, especially since new legislation requires that all mortgage brokers be registered with the state."

But Kukuda said it's something that occurs every year and the office simply doesn't gear up to solve the problem.

"They don't even have the system computerized," Kukuda said. "No wonder they can't get everything out."

Burns said the system is computerized and said he would not respond to criticism that the office doesn't prepare for the rush.

"I can't address his accusations," Burns said. "If he wants to put something in writing, we can respond, but I'm not going to reply to a bunch of wild accusations."

Kukuda said Summerlin Mortgage sent its renewal paperwork to the state June 16 and the $500 check the company sent to pay the fee cleared the bank on June 23.

"I made a copy of the application and the check and sent it to our mortgage lender, Countrywide Mortgage, and I asked the state to give us a letter saying approval of our renewal was delayed so that we could at least get things processed, but they said they didn't have the authority to do that," Kukuda said.

Countrywide is caught in the middle because state law prohibits the company from loaning to brokers unless they are licensed. Summerlin Mortgage has been in good standing, but the state's delay effectively stops all lending activity.

"It's a really frustrating situation for everybody," said Brian Robinett, senior vice president of the western division of Countrywide, who is monitoring the situation from his California office.

He said Countrywide officials plan to meet with other brokers and state officials today to try to find a solution. He said Nevada and Pennsylvania are the only states in which license renewal delays occur.

Robinett said he did not know exactly how many deals were slowed by the state delays.