Protect Your Pocket Series

Choosing a Qualified Loan Broker

(originally published November 2008)

Today more than ever, consumers are on guard when it comes to making financial decisions. But most acknowledge that in the current financial climate it’s imperative to seek the advice of a trusted investment adviser or financial planner before making any sudden moves with your money.

One of the biggest investments a person can make comes when purchasing a home. In this process, potential homeowners often work with loan brokers or broker-dealers, professionals who have to be licensed with my office’s Securities Division. Truth is, one of the most common instances of mortgage fraud investigated by my office is unlicensed loan brokers, and the consequences of working with these criminals can be very painful financially.

Here’s one example: Indiana resident Jason Keigley originated and closed several loans in Hendricks County under the company name 1st Place Mortgage. He was not licensed to do so. He duped his victims, mainly seniors, into believing he was a licensed, professional loan broker. In one case, he established a reverse mortgage for a couple, who was later hit with foreclosure as a result of Keigley’s failure to fulfill the obligations of the reverse mortgage. In March, a Hendricks County court sentenced Keigley to 11.5 years in jail, and just this month, my office worked with the Henry County prosecutor to bring additional charges against him for his dealings in that county.

Similar to Keigley, Victoria Goodner solicited business from her Indiana victims by representing herself as a loan broker. She defrauded seven victims, causing one couple to be evicted from their apartment as they struggled to pay her ever-increasing fees and charges. This year, a Hancock County court sentenced Goodner to 11 years in jail and ordered her to pay more than $49,000 in restitution for her victims.

As evidenced in these cases, it is imperative for home buyers to do their homework. There are ways you can ensure that your loan broker is licensed and qualified to guide your investment strategies.

First and foremost, do your research. Many Indiana loan brokers’ licenses were revoked earlier this year after my office implemented more stringent requirements for obtaining a license. Check to see if your loan broker is licensed by using the searchable databases at or by calling my office at (800) 223.8791.

Hoosiers can also protect themselves from unscrupulous loan professionals simply by being aware and asking questions. There are other red flags that can indicate that your loan professional may not warrant your trust:

Up-front fees. You will be expected to pay for certain third-party fees such as an appraisal or for your credit score, but loan brokers cannot legally accept any fees for their services until closing the loan.

Falsified income. An unscrupulous loan broker may encourage the borrowers to falsify their income on the mortgage application. This is fraud. If buyers can't document their sources of income, they may be trying to purchase a property that is beyond their means.

Over-appraised residential real estate. This occurs when an unscrupulous loan broker, real estate appraiser and/or real estate agent collude to get a property appraised at a value grossly above its market value.

If any of these red flags ring true, contact a licensed loan broker to examine your loan as soon as possible. Good advice is your best weapon of defense. Being led further astray by an untrustworthy loan broker can only compound your losses.

Related Information:

- Search loan broker database

- Contact the Securities Division