Bank of the Ozarks in Little Rock, Ark., is exiting the secondary market, complaining that this aspect of its operations had "operated at essentially break-even."
Bank of the Ozarks in Little Rock, Ark., is exiting the secondary market, complaining that this aspect of its operations had "operated at essentially break-even."
According to an Arkansas Business report, the bank will continue to originate some home loans through its Community Reinvestment Act mortgage lending group and its community bank group. The bank said that two of its mortgage bankers, Gene Holman and George Schaefer, "will continue to run the other business functions they have historically overseen," and least seven "potentially displaced" employees also accepted other positions in the bank.
"No offices will be closing, since all offices in which mortgage lenders are housed provide other products and services to customers," said bank spokesperson Susan Blair. "Some mortgage personnel will be displaced, but we hope that many, hopefully the majority, will apply for and transfer to other open positions in the bank."
Blaid added that the bank’s decision to cease secondary market operations was based on a regulatory environment that made residential mortgage origination "challenging from a profitability perspective."
"All secondary market loans we have originated have been resold shortly after origination, so this decision will have no noticeable impact on our balance sheet," Blair said. "Our secondary market mortgage loan program has operated at essentially break-even, so this change will have no meaningful impact on our profitability. Since the Great Recession, regulatory requirements for mortgage lending such as QM, TRID and HMDA have constantly increased making it more difficult and more expensive to originate these loans, all resulting in this business being challenging from a profitability perspective."


The 2017 Great River MBA Conference will be held May 9-11, 2017 at The Peabody, 149 Union Avenue in Memphis, Tenn. 

The Great River MBA Conference is the place to be in the mortgage industry! 

With the addition of a fourth host state, Missouri, this Conference [formerly known as Tri-State MBA Conference] continues to grow in size and status. In 2016, the Great River MBA Conference sold out weeks prior to the event. Don't be left off the attendee list in 2017!

We offer attendees and sponsors an intense 3-days of inspiring and motivational instruction, with opportunity to network with top experts in the mortgage industry. Come learn how to be industry leaders and gain valuable knowledge today to drive success tomorrow. 

If you want to know what is happening in the Southeast, The Great River MBA Conference is the place to be! 

Click here for more information, call (901) 321.6702, e-mail or visit

Total Mortgage Services LLC has announced that it has received its Arkansas Combination Mortgage Banker-Broker-Servicer License from the Arkansas Securities Department and is now able to originate and service residential mortgage loans in the state of Arkansas. Total Mortgage is licensed as a mortgage banker, broker and servicer in Arkansas and holds License Number 103968.
“Signs of stabilization in the housing market are beginning to appear and with rates near record lows it is an opportune time for borrowers to move forward and consider purchasing or refinancing a home,” said John Walsh, president of Total Mortgage. “All of our fully licensed loan officers are very excited to help responsible borrowers throughout the state of Arkansas find the right fixed-rate or adjustable-rate mortgages to meet their financing needs.”
Total Mortgage is now licensed in 26 states, including: Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Massachusetts, Maryland, Maine, Michigan, Mississippi, New Jersey, New York, New Hampshire, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont and Virginia, West Virginia and the District of Columbia, and has four additional state licenses pending.

Douglas F. Vaughan has been indicted by a federal grand jury on charges stemming from a fraudulent investment operation that was actually a multimillion dollar Ponzi scheme. The 30-count indictment generally alleges that, between 2005 and 2010, Vaughan operated a promissory note investment program, which he marketed as a means of generating revenue to grow his real estate business, as a Ponzi scheme. It further alleges that Vaughan owed more than $76 million in unpaid principal and interest payments to approximately 600 investors when the fraudulent scheme collapsed in early 2010.
United States Attorney Kenneth J. Gonzales said that the indictment is the result of a joint federal-state investigation that was initiated by the Securities Division of the New Mexico Regulation and Licensing Department in September 2009, and later expanded to include the Federal Bureau of Investigation (FBI); U.S. Postal Inspection Service, and U.S. Secret Service.
The indictment was unsealed this morning by the United States District Court for the District of New Mexico after law enforcement officers arrested Vaughan at a residence in Albuquerque's North Valley. It charges Vaughan with three counts of wire fraud, 17 counts of mail fraud, five counts of money laundering, and five counts of false writings and documents. If convicted, Vaughan faces a maximum penalty of 20 years in prison on each of the wire and mail fraud counts, a maximum of 10 years in prison on each of the money laundering counts, and a maximum of five years in prison on each of the false writings counts. The indictment also seeks forfeiture of a residence in Las Vegas, Nevada, as well as a money judgment in excess of $74 million.
According to the indictment, Vaughan was the chairman, chief executive officer, president, and majority shareholder of Vaughan Company Realtors (VCR), a business that operated primarily as a residential real estate brokerage and was at one time the largest independent residential brokerage in New Mexico. In spring 1993, Vaughan allegedly began a promissory note investment program (Promissory Note Program) to generate revenue to grow VCR's business. The typical note had a three-year term, an interest rate ranging from eight percent to 40 percent per year, and provided for interest to be paid in monthly installments. At the end of the note's term, Vaughan either paid off the principal or offered the investor the opportunity to "roll over" the principal into a new note. Vaughan allegedly signed each promissory note on behalf of VCR.
The indictment alleges that Vaughan led investors to believe that their investments in the Promissory Note Program were actually or virtually risk-free because they were guaranteed by VCR, Vaughan's personal guarantee, and a $2.5 million deed of trust on certain real estate. Vaughan allegedly marketed his Promissory Note Program by representing that the invested funds would be used to purchase real estate and to acquire smaller real estate companies. Instead, Vaughan used the Promissory Note Program funds primarily for three undisclosed purposes:
►To pay the interest and principal on promissory notes taken out by earlier investors;
►To pay himself, under the guise of salary, bonuses, or some other personal transfers; and
►To subsidize the operation of VCR, which was generating insufficient "legitimate" revenues to sustain itself.
According to the indictment, by 2005, the Promissory Note Program was the primary source of revenue for VCR and, without the infusion of capital generated by new Promissory Note Program investors, VCR was insolvent. Despite this, Vaughan allegedly continued to distribute the same marketing materials for the Promissory Note Program, sign the same promissory notes, and make the same corporate and personal guarantees. Although Vaughan represented to investors that he would not extend more than $2,500,000.00 in promissory notes, financial records allegedly reflect that the aggregate principal balance owed to note holders far exceeded this amount:







From at least 2005 through February 2010, Vaughan allegedly used funds from new Promissory Note Program investors to make interest payments to existing note holders and thus lulled existing investors into believing that they were being paid returns from VCR's legitimate business revenues. However, VCR's corporate tax returns reflected the following annual losses:







As alleged in the indictment, when his Ponzi scheme began to collapse and he became unable to meet the monthly interest payments to note holders, Vaughan made false and misleading excuses to investors and failed to disclose that VCR had insufficient revenue to make the interest payments. In February 2010, when Vaughan filed for personal and corporate bankruptcy, the aggregate principal balance owned to approximately 600 note holders was approximately $74,745,723.93 and the interest expense owed to note holders exceeded $1 million per month.
In announcing the indictment, United States Attorney Gonzales said, "The case against Vaughan is fundamentally about deceit. Vaughan allegedly misrepresented to investors their guaranteed rate of return, the safety of their investments, and even what it was they were investing in. People who trusted Vaughan ended up losing a lot of money, in some cases, their life savings. My office will diligently and aggressively prosecute Vaughan and others like him who seek to defraud people out of their hard earned money. I commend the Securities Division of the New Mexico Regulation and Licensing Department, the FBI, the Postal Inspection Service, and the Secret Service for the persistent and thorough investigation that led to this significant indictment, and their ongoing efforts to protect the public by detecting and stopping these fraudulent investment schemes."
"Doug Vaughan's arrest brings to a close a Ponzi scam that financially devastated as many as 600 victims, many of them New Mexico residents," said Fort Worth Division Inspector in Charge Randall C. Till. "Consumers have the right to receive mail free of fraudulent promises and deliberate misrepresentations. Before even Charles Ponzi gave the scam its name in the early 20th century, Postal Inspectors vigorously investigated these types of frauds and remain committed to defending innocent consumers against those who would abuse the U.S. Mails to further their criminal enterprises."
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Two negative trends are currently clouding the Phoenix, Ariz. area housing market, according to a new report from the W. P. Carey School of Business at Arizona State University. August marked the third consecutive month that the median existing-home price dropped in the Valley. Also, foreclosures made up their highest percentage of existing-home activity since back in January.
“Foreclosures accounted for 45 percent of the existing home market activity in August,” said Associate Professor of Real Estate Jay Butler, who authored the report. “When you add in resales of previously foreclosed-on homes, all of this foreclosure-related activity represents a full two-thirds of the market’s transactions in August.”
Approximately 4,000 foreclosures were recorded in Maricopa County in August. That’s slightly up from about 3,900 foreclosures in July, nearly 1,000 more than last August’s total of about 3,100. Sales activity overall is slowing down, now that summer is over. In August, 4,800 homes were re-sold, down from nearly 5,100 in July and 6,000 re-sales last August.
“It’s not unusual to see the resale home activity slow as the selling season comes to an end,” said Butler. “As the year comes to an end, median prices often decline in response to holiday and school activities that allow little time or desire to buy a home. Beyond the impact of foreclosure activity, the absence of a strong move-up market, will also limit any growth in home prices.”
The median home re-sale price for August was $135,000, down from $137,500 in July, $143,000 in June and $144,000 in May, demonstrating a sustained slide. Last August, the median was at $138,000.
“Although current interest rates and home prices are very attractive, homeowners don’t seem to be motivated to buy,” said Butler. “This lack of motivation can be attributed to anemic economic and job recovery, low consumer confidence and stricter underwriting guidelines, among other factors.”
The townhouse/condominium market saw 630 foreclosures in August. That’s up from 590 in July and way up from 380 last August. The median townhome/condo price continues to plunge. It was at $80,000 in August, all the way down from $105,000 last August.
The full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed by clicking here.
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Jeffrey Todd Crandell, 33, of Mesa, Ariz., pleaded guilty on Nov. 9 to six counts of bank fraud for his role in a mortgage fraud scheme. Sentencing will take place Feb. 22, 2010, before U.S. District Judge G. Murray Snow. Crandell was the leader of a sophisticated cash-back mortgage fraud scheme. In 2005, he obtained the rights to various parcels of real estate located in Queen Creek, Ariz., obscured his interest in those properties by placing them in the name of his brother-in-law, and then recruited friends and acquaintances to buy the properties for inflated prices—often hundreds of thousands of dollars more than the cost of the land. Crandell also acted as the mortgage broker for each transaction. In that capacity, he was responsible for preparing the buyers’ loan applications. Crandell included multiple lies in the applications in order to persuade the lender to approve the loans. Among other things, he inflated the buyers’ incomes and assets and stated—falsely—that the buyers would be making the downpayment. In fact, at closing, Crandell supplied the down payment on behalf of the buyers and also provided a cash kickback to them. The properties eventually went into foreclosure.
Each conviction for bank fraud carries a maximum penalty of 30 years in federal prison, a $1 million fine, or both. In determining the sentence, Judge Snow will consult the U.S. Sentencing Guidelines, which provide advisory sentencing ranges. The judge is not bound by those guidelines in determining a sentence.
Crandell’s conviction is part of an initiative called “Operation Cash Back” in which 40 defendants—including many real estate professionals—were indicted and arrested in June 2008. To date, 30 have been convicted through guilty pleas or following trial.
The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution is being handled by Dominic Lanza, Raymond Woo and Kevin Rapp, Assistant U.S. Attorneys, District of Arizona, Phoenix.
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