LV mortgage lender pressing state over licensing delays, agency says matter is closed

Monday, July 24, 2000 | 11:26 a.m.

A Las Vegas mortgage lender whose license renewal was among more than 500 delayed by state regulators is pressing to make sure the problem doesn't occur again.

Ken Kukuda, vice president of Summerlin Mortgage, said his company finally received its renewal July 13, nearly two weeks after it was needed to officially conduct business. He has written letters to Gov. Kenny Guinn and Sydney Wickliffe, director of the Department of Business and Industry, criticizing the efforts of the state's Financial Institutions Division.

"Good government and responsible government do not offer excuses when they fail to serve their constituents," Kukuda wrote. "The FID's attitude is worse than the failure to issue licenses. However, it comes as no surprise. The FID has adopted this pattern of management and behavior."

The Financial Institutions Division, headed by Commissioner L. Scott Walshaw, monitors state-chartered banks and lending institutions.

Kukuda was upset because even though his renewal paperwork and $500 fee were submitted to the state in mid-June, the agency did not turn around the renewal for nearly a month. As a result, lenders who follow the letter of the law about conducting business only with certified mortgage brokers delayed processing loans for prospective home-buyers.

One such lender was Countrywide Mortgage, which said it carefully adheres to state policy. Kukuda said the Financial Institutions Division eventually issued a letter saying the license was forthcoming to Summerlin Mortgage, satisfying Countrywide. But Kukuda said the delay in issuing the renewal was unacceptable, prompting him to take further action with his letters.

"It's not over for me because it's an indication of just how bad they are," Kukuda said of the agency. "It's like an Abbott and Costello 'who's-on-first' routine."

In early July, Deputy Commissioner Burns Baker said the delays in issuing the renewals were the result of a backlog that occurs when the state's mortgage lenders submit renewal applications every June.

Kukuda said he has suggested in the past that the agency hire temporary employees to manage the backlog and process the renewals faster. Kukuda said what angers him the most is that his suggestions don't go anywhere and that the agency even blamed Countrywide for not being more flexible in processing its documents.

"Countrywide is only following state policy," Kukuda said. "What's really the problem is that the state doesn't gear up for this."

Walshaw said he considers the matter closed. He said the only reason the license renewal became a critical issue was because Countrywide indicated it would not fund pending loans unless a broker was licensed. He said his office generated a form letter indicating the status of the renewal for any lender that needed verification.

"If wholesale lenders take that position, we may have to look into how to deal with it next year," Walshaw said. "Whether we will be able to do anything from a budgetary perspective, I don't know."

Walshaw said the problem was exacerbated by new legislation that required licensees to turn in the names of all their loan officers for certification.

He said his office estimated there to be about 1,500 in the state and industry representatives were asked to submit the names as early as last fall, well before the June 30 deadline. Walshaw said only about 300 to 400 responded before the end of June, adding to the traditional renewal logjam.

Wickliffe said she has discussed with Walshaw the possibility of realigning job responsibilities to speed up the renewal process and hiring temporary workers.

The fact that the Legislature mandated checks of more people without adding employees to cover the job contributed to the problem, she said.

"So many state agencies are stretched to the limit," Wickliffe said. "It's unfortunate that it happens this way.