Not paying closing costs on a mortgage might be "the biggest no-brainer in the history of earth,” Jon Shibley, the owner and brash pitchman for Lenox Financial, has proclaimed.
In Shibley's case, according to the Georgia Department of Banking and Finance, he's still missing the obvious: Making sure his license is current.
On Monday, the state agency ordered Atlanta-based Lenox Financial Mortgage LLC to stop doing business until its operating license is current.
But Shibley, a native Texan known for his Stetson hat and swagger, said it’s the banking department that’s wrong.
In an interview Thursday with The Atlanta Journal-Constitution, Shibley said he redirected his company after the mortgage industry “hit a sandbar,” and is no longer a mortgage broker. Shibley said he voluntarily gave up his state license in November to focus on franchising the Lenox Financial name.
He said he hasn’t sold or marketed a mortgage since Dec. 1, when his license actually expired. The company originated $1 billion in mortgages nationwide in 2010, compared to $4 billion a year in the economy’s hey-day.
In December, Shibley let go of 60 to 70 staffers to focus on the new model. Shibley said over the past decade he’s developed a technology platform to streamline the mortgage application process. This platform essentially provides leads to Lenox Financial franchisees, licensed brokers who’ll handle the mortgages.
Shibley will do marketing but his company won't handle transactions or deal with customers. He said Lenox Financial “is not an entity that requires a mortgage license.”
According to the state, Lenox Financial, which operates as www.lenoxfinancial.com and Technology and Workflow Management Corp., is brokering mortgages and requires a license. The state said it’s illegal to market loans “directly or indirectly” without a license.
Shibley said he went to the DBF late last year to explain his new business model, but the regulator declined to meet or interpret state law, and slapped him with a cease and desist order without examining his plans.
“I can’t cease and desist what I already voluntarily ceased and desisted,” he said, adding he will obtain a license if the DBF doesn't budge.
Lenox Financial, which Shibley founded in 1994, offered home mortgages with no closing costs, making up the difference through “marginally higher” interest rate loans.
Shibley bashed the mortgage industry in his ads. Some competitors have called him a “flim-flam man;” he calls them “predators.”
Shibley said he has approval to operate in other states, and, once his company is past its issues with the DBF, the brash "no brainer" radio ads will return to metro Atlanta.
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