North Carolina state regulators suspended the operating license of national broker Aapex Mortgage after the Florida-based operation was hit by sanctions in six other states.

The action came June 28 in a written filing from North Carolina Commissioner of Banks Joe Smith, who licenses mortgage lenders in the state.

The order came on the heels of a January settlement between Smith’s office and Aapex under which Aapex was fined $322,000 after examiners compiled a list of findings against the company.

Founded in 1991, Aapex specializes in purchase, second mortgages, refinance, equity and commercial loans. As a broker, it partners with a number of outside lenders, both prime and subprime.

According to state examiners, who in late 2005 reviewed 32 of 185 loans then closed by the firm’s Cary office, Aapex allegedly:
Was charging fees higher than allowed under North Carolina law.
Wasn’t maintaining files on North Carolina loans within the state.
Collected some fees that should have been put into escrow accounts but were not.
Was allowing personnel not licensed by the state to close loans in North Carolina.

In a subsequent filing against the company in May, state regulators also stated that up to a third of the mortgages closed by Aapex are now in foreclosure.

Smith’s office originally had agreed to suspend $288,000 of the January penalty and to allow Aapex to continue to do business in the state, if the company moved to deal with the findings in a timely fashion.

But according to Deputy Commissioner of Banks Mark Pearce, regulators and the firm remain at odds over Aapex’s compliance record and over how much of the penalty ultimately will be paid.

Pearce says the payment question may take months to resolve.

Aapex’s new problems with the state began June 20, when Smith moved to suspend the firm’s operating license after learning that Aapex had been hit with suspensions or cease-and-desist orders in Alabama, Ohio, Illinois, Maryland, Georgia and Massachusetts.

The company, through its Raleigh attorney, William Bost, contested that move.

On June 28, Smith held a second hearing to exhibit certified copies of the other states’ sanctions against Aapex and to continue his own suspension order.

In the Triangle, telephone listings show Aapex operating out of a Garner office, but phone company recordings list that number as having been disconnected.

The full article can be found at BizJournal

07.13.2007. 20:28