Dallas Broker Operates With Revoked License

The Texas Savings and Loan Department issued an order to revoke the mortgage broker license of Mark Hill Stern in April 2003 following a contested hearing as a result of the broker’s fraudulent actions, the regulating agency’s chief of enforcement Michael Chisum told MortgageDaily.com. However, the Department has reason to believe Stern continues to operate his company Financial One Mortgage Services.

“He has no right to practice as a mortgage broker … and we’re having to go to court to shut the guy down even though we revoked him already,” Chisum said.

Consumers may not suspect they are dealing with Stern as the Department said it has found the broker has conducted business under names not on file with TSLD such as Mike Hill, Mark Hill and Mark A. Hill.

The Dallas broker has over 10 consumer complaints filed against him, of which half or more were filed after the revocation, according to Chisum. The complaints accused Stern of numerous deceptive acts, including compensating and associating with an unlicensed person acting as a loan officer for him, charging amounts higher than actual costs, failure to maintain loan files and provide disclosures required by state and federal laws.

A number of the complaints accused Stern of charging unearned junk fees that he would disguise with names such as “administrative fee” and “transfer lock fees,” Chisum said. Unearned fees ranged from $1,000 to $7,000 in different complaints, adding up to a large amount of money, “and that’s just the people we have on file,” he added.

In various cases, the Good Faith Estimate (GFE) documents he provided to consumers had misrepresentation, omission or understatement of fees, according to Chisum. One borrower was given a GFE showing fees would be under $2,000, but at the closing the amount went up to almost $5,000. In another case, Stern allegedly gave a borrower a GFE missing eight types of fees, which at closing time resulted in an amount over $7,000.

In one complaint alleging misappropriation of funds, Stern charged a borrower an appraiser fee of over $500, but did not give this money to the appraiser and kept it for himself, Chisum said.

A Texas couple injured by Stern pursued civil action against him was not able to collect on their judgment of approximately $50,000, the official said. The Department ended up providing the couple with about $21,000 from its mortgage broker recovery fund, which protects consumers who cannot collect on a judgment against a broker. Based on the type of violations, the courts can direct TSLD to provide consumers a certain amount of relief from the fund to cover actual damages, court costs and attorney fees.

Stern appealed the revocation order at a state district court in Travis County, and the Department said it is working with the attorney general to seek a temporary injunction against the broker to stop him from practicing. The court hearing is scheduled for June 15.

“We’re trying to spell out in detail what he can’t do so he does not operate as a mortgage broker or as a loan officer,” Chisum said. “We think his pattern of practice is serious abuse of consumers and we want the best effective remedy we can find. Obviously we wouldn’t do this if we didn’t think it was serious, but it is.”

TSLD advised consumers to have more precaution and to educate themselves as much as possible about the loan process and their rights before they begin shopping. Checking if any enforcement actions have been made against a broker, substantially higher costs at the time of closing, and asking questions on fees or other matters they don’t understand, are a few ways consumers can protect themselves.

Upon MortgageDaily.com’s request, Stern’s attorney, Jim Houchins, did not return a phone call for comment.