Lei Financial

Business Reply

Met with the borrower and her husband on the 5th of April from 7:15 to

9:15 pm.

Victoria (Wife's name has been changed for privacy purposes) and Bruce

sat at the table with me as we went over their current attempts to

refinance their home. They had been working with Jennifer at Kemper

Mortgage who apparently could not meet their expectations. They were

very direct with me regarding the length of time it took before they had

finally come to LEI Financial. It appears that they started something

with Kemper Mortgage back in January of 2007 because that is the date on

the credit report that they gave us. Victoria expressed her frustration

because it had come to this point when she finally felt that she needed

to step in and take action on this. They expressed to me that Jennifer

had been sitting on this and then it finally came down to them calling

them and saying that they were unable to do anything because the loan

size was too big.

Initially they began speaking with Keith. Keith did his due diligence

in finding a bank to take on the refinance. This was not going to be an

easy deal to process. Their current mortgage is in Bruce's name only

and title is in Bruce's name only as well. However, Victoria's credit

score is higher than Bruce's. So, we found Downey to use the trailing

borrower income program.

I began going through the initial application and disclosures with

Victoria and Bruce. Victoria just wanted to get the signing done so we

could get the process going. When I got to the employment section of

the application, I needed to get her employment address and phone number

to verify employment. She didn't remember the address and she ran

upstairs to get some mail for her employer. Interestingly enough, the

mail for her employer was addressed to her home address. I found that

interesting and I questioned her on why that was. I didn't understand

why an employee would have company mail coming to her home. So I asked

for her boss's phone number and she gave it to me. She told me his name

was Ryan and gave me a cell number. I then took Bruce's employment

information and we continued on through the application and disclosures.

During my visit with Bruce and Victoria I went over the loan amount, the

program, payment structure, and pre-payment penalty. The loan amount

and the value of the home were predetermined based off the conversations

that Keith had had with them from their previous attempt to refinance.

As we were going through the paperwork, Victoria told me that she needed

to have Kemper's previous mortgage paperwork audited because she

couldn't understand how come their payment was so high. She thinks that

something wasn't disclosed to them. They also didn't know that

origination fees and pre-payment penalties were tax write-offs for them

and felt that they had missed out on opportunities to include that in

their taxes. I went on to tell them that pre-payment penalty interest

was included on their 1099 INT

I also found out who had done their recent appraisal and was going to

check with one of our appraisers to see if they could help in getting

the appraisal for us.

In closing from this meeting, I told Bruce that he needed to get me the

information from His employer so that we could verify his employment and

that I would need the cancelled checks/snapshots from their bank account

to show the bank as payment history coming from a joint bank account.

They said that they would get me that information no problem.

4-6-2007: Received a fax mid morning from Bruce with the employment

verification information. I also had a phone call from him questioning

receipt of the fax. I later in the day had another phone call from

Bruce explaining that they've only had Saxon Mortgage for 7 months and

that he can get me what he had access to online pretty quickly and the

other's he would have to order from the bank.

I called the appraisal company we do business with to see if they knew

the appraisal service that did their appraisal recently and turns out

that they did. But I told them to ask if the bank that we were going

through was a bank that they were approved with.

4-7-2007: Called Bruce to let him know that I got his fax and

voicemails. Explained that the snapshots would be fine and to go ahead

and gather what he could for me so I could turn that in with the rest of

his file.

4-9-2007: Received two faxes from Bruce with the mortgage payment

snapshots. Also found out that day that the appraiser that had

completed the appraisal recently was not approved by the bank and that

we would need to get a new appraisal. I spoke to Bruce later in the

day and told him what happened and he was relieved that he hadn't

actually paid for the appraisal through the other service. However, he

did have a copy of the report. I explained to Bruce that we would need

a new appraisal and the reason why. But I also told him that I want to

make sure that the value that the initial appraiser gave was solid

before I had them pay anything out of their pocket. He asked me how

long that would take and I told him about 24 hours.

This is an excerpt from Victoria on an email she sent me today.

Thanks again for the info on the origination fee and the penalty fees,

we talked to our tax guy and he said yes we are up for some money to

come back to us. YEAH!! Good news for once. Take care. Victoria

4-10-2007: Bruce called me in the morning to find out how things were

coming along and if we had an approval yet. At that time, we hadn't

submitted the file to the bank yet. But it was going to be submitted

that day I told him. Then it usually took about 72 hours for an initial

approval. He also asked about the appraisal. I explained to him that

our appraisal order person was out ill the day before and that the order

was placed today and they were looking into it. I again reminded him to

send me his current copy of his appraisal. He asked me to call his wife

to put her mind at ease because she had been extremely stressed out this

situation. I left a message on her cell phone later that day and got a

return phone call from Bruce asking why I called his wife? I explained

that the call to Victoria was the result of his request to make contact

with her to give her the warm fuzzies and settle her down a bit. He

then asked if I had heard anything about the appraisal situation again.

I explained it one more time to him. The order had been placed. If I

was having an issue with value that I would let him know.

4-11-2007: Received an email from my processing team as a result of the

lender doing their due diligence on verifying Victoria's employment. I

had also received a phone call from Bruce and called him back. He was

acting surprised when I called and wanted to know if everything was ok

and I told him on my end it was and that I was returning his call. He

said he was calling to see how things were coming along. I told him

that I did send Victoria an email and he told me that she was in the

process of reading it and from here it just blew up.

4-12-2007 9:41 am: This is the email from my processor that started the

fiasco:

The underwriter has conditioned for a letter of explanation regarding

the relationship between the borrower and employer as per AZ Secretary

of State website the owner of her employment, is a related party. With

the listing of ownership it also states the business was registered with

a domestic begin date of 8/05, this contradicts the time employed of 4

yrs and reduces it to 1.66. I have also conditioned for an updated 1003

with correct time with employer and a complete 2 yr employment history.

12:51 PM

Victoria,

OK, when we look at the AZ secretary of state's website it shows the

owner of your employer as a related party (name deleted for privacy

purposes). That's all fine because you gave me his name and number and

I've already talked to him. Here's where it gets a bit tricky.

He registered the business as of 8/2005 and we're saying that you worked

there for 4 years.

8/2005 to the present time is about a little over a year and a half. Is

he a new owner? Did he buy the business from somebody else and you

worked for them?

Thank you,

Tina Demopoulos

3:31 PM

Tina;

Yes, actually he is the owner, and it seems that your company has gone

beyond the stated income of verification by checking this out. It looks

to me like there is something else that needs to be understood here. I

think right up front, I should be made known where you are going to

investigate next. Your company got the verification from him, it has

the Secretary of State Information from 2005, which he says he was

registered as a DBA? He has been under several other names, but that

has nothing to do with me. I have worked with this for over the time

they are saying, and he is very upset as to why the Secretary of State

has that date, so now he is involved in something that was supposed to

be stated income. Stated income does not mean lets go all over town

getting verifications. Either you want to help us, we gave the

necessary paperwork, what is next, check to see if Bruce's employer will

be in business next year.?

Once again we are being given excuses and the run around about

appraisals, we were told by Keith that they would accept the appraisal

from Redding, but yet I have a message on my phone from someone that

wants to appraise the property. Lets cut through the bull now and get

on with what we need, either you can help with this or not, if not, I

suggest you tell Keith not to lead people on to believe that he is any

different from the rest of the people. We have had it with this whole

process, we have had to jump through way too many hoops to get a 1700

plus payment, when in fact we did not have to do much of anything for a

3600.00 payment. Now, we have to do what we have to do. You say stated

income, you got stated income, now you are going to the Secretary of

State. I am very upset over this and at this time am considering

calling my Attorney on this, I am a victim of Identity fraud, and it

seems to me that Lei and Keith are misrepresenting themselves by telling

people things that are just not so, and you have all this information

again. Stated, means stated, not looking for more, if you wanted more

you should have been up front, not making an investigation out of this.

This is a simple refinance. I am going to contact the banking

commission and find out what stated income means. Victoria

3:49 PM

Tina;

Are you a loan officers as well as a loan processor, because when you

were here you told us you worked for Keith, but your San Diego office

says you both are loan officers for the Arizona branch, which is a

broker and banker? We are not only confused, but very concerned.

Hopefully, we can clear up this misunderstanding quickly. Thank you

Victoria

4:05 PM

He spoke to the Secretary of State office and they said perhaps the date

was like that because after so many years it expires and that is when it

shows renewed, that is only the trade name, not how long he has been in

business with a theater. If you would need something else in writing we

can provide that, but as I said before, this stated income has gone

beyond stated on this one. And I would really like to know why?

Victoria

4:11 PM

Stated Income Loans Compared to Full Documentation Loans

A stated income loan qualifies a borrower using the income the borrower

states on the application form - as opposed to the income the borrower

can document. With a stated income loan, the lender agrees not to

attempt to verify the income the borrower states on the application.

Stated income loans are designed for the many prospective home buyers

who have the income to afford a mortgage and have acceptable credit, but

don't meet traditional underwriting standards - called full

documentation or "full-doc".

4:15 PM

Victoria,

OK, let me first start by addressing the stated income verification and

what really means. Stated income means that you list on the application

the income needed to qualify you for the loan. However, we are still

verifying your employment for a minimum of 2years. So the bank is doing

what needs to be done with regards to that. The bank not only makes

their phone calls but they also have the right to make sure that the

company can be verified through other sources as well. Whether it be a

website, yellow pages, or registered through the state with a business

license. Unfortunately, I don't know that these things are being done

until I get questioned by the underwriter.

Let me explain something to both you and Bruce. Right now, the market

is in a very vulnerable place. Underwriters are questioning things all

over the place that they didn't question before. This has all come

about since recent changes to the market over the past few weeks. My

job is changing everyday as well as a result of it. Things that

underwriters used to take to satisfy the burning question are no longer

acceptable. They are really tightening their belts. And as a result of

what's happened in the past few weeks we are also finding that even with

full documentation loans that they are now looking for letter from CPAs,

accountants, or tax preparers as a third party verification of

employment.

Next, let me explain to you why we need to have another appraisal done.

Redding appraisals is not an approved appraiser through the bank that we

were looking at doing for you. If you noticed I used the past tense in

the previous sentence. At this point, I think it's best that we cut our

ties with one another. You apparently are not happy and there's no

sense in letting this frustration drag out. I have not done anything to

cause you or Bruce any kind of fraud. Please keep one other thing in

mind. The bank is looking out for their backside. A simple refinance

you are correct. But let me ask you this. If you were in the process

of loaning somebody $549000 wouldn't you want to make sure that your

backside is covered?

To answer your question on my position with the company, let me give you

a little background on LEI Financial. Our corporate office is located

out of San Diego, CA. We have an office here in Tempe. Keith and I

both work here in Tempe. Keith is a loan officer and I too am a loan

officer as well as an account manager. I am the field representative

for the Tempe office and I manage the refinance from start to finish.

We are the 3rd largest mortgage company in San Diego. We are members of

the Better Business Bureau, California Association of Mortgage Brokers,

National Association of Mortgage Bankers, San Diego Association of

Realtors, and National Association or Realtors. We have been on the

cover of the Broker/Banker magazine(the Sports Illustrated of the

financial business industry), been on the cover of the San Diego

business journal, San Diego Magazine, and various local TV news spots as

well. We spend $350000 in internet leads each month. We are licensed

across the US, provide a fully array of Financial Services including

Life Insurance products, Investment properties and commercial property

lending. I can go on and on but really there is no point.

I thank you for giving me the opportunity to meet both you and Bruce and

sorry that we could not do business. I understand your position of

being a victim of identity theft/fraud and that you are only protecting

yourselves. But I too have to protect myself.

Regards,

4:26 PM

Tina;

We still feel at this time you have misrepresented your company by

saying and doing what you have done. It is in our best interest to let

the Banking commission make a call to whether you need to rethink your

processes. You asked for nothing but the first page of the appraisal,

and you said nothing about us getting another appraisal, once again you

misrepresented yourself, the message was left by the appraisal company

yesterday at 10:30, you talked to Bruce last night at 4 and asked for

that page.

You have cost us a loan, and if you thought we were dishonest in some

way, you as the processor should have come forward to me and asked for w

2 forms and you would have gotten them. You are yet another one of

California's predatory lenders who filter this state with your lies and

craps. Yes, you are correct that lenders are getting tight, because it

is places like you with all your false claims and leading on that puts

them in the place they are in. So, you may be able to say you have web

sites and this and that, but the court system will say different as well

as the State Banking Commission, all the states that Lei are licensed in

and were licensed in. Please return our paperwork to us ASAP, I don't

need yet another place to have my information. Bruce and Victoria Hood

How is it that Keith said he had so many banks, and you sat at my dining

table and said you have many many places that you could put it through?

I am really disappointed in the fact that once again we got duped, and

you can guarantee that it won't happen again. We have talked with

Redding and the person he goes through, and they have said they are

willing to do this loan, they have know Redding for years. They are

actually the appraisers for their company.

4:46 PM

Victoria,

The reason I needed that page of the appraisal was to have the appraiser

look and make sure the comparables used by Redding are comparables that

we can use. However I did explain to Bruce that a new appraisal had to

be done. The one from Redding wasn't going to be accepted by the one

and only bank that we had to get this done for you.

Please know that this is not a question of my questioning your honesty.

I am on your side. I welcome you to call my manager, David Pyle at

480-505-7250 if you feel that I have truly done something wrong. I'm

actually encouraging you to call him.

Again, I'm sorry we couldn't do business together. I will gather all

your information and send it back to you.

Regards,

5:21 PM

Tina;

At what percentage of the appraisal were you going for to lend. 80, 75

what percentage, and how much was the prepayment penalty. Because,

after speaking with a good friend who is looking at a large inheritance

soon he gave us a better idea of just keeping this loan and waiting

until it goes under the 500 mark and then refinance, and do not have to

pay the prepayment penalty. We were really never given an amount of

what that was. Thank you Victoria

After all of this, I informed my manager and processing to stop all work

on this file immediately. However, I did get an email from my processor

asking my why the borrower would be contacting the bank. I told her

very high level because she was probably trying to gather information to

report me to state banking. I emailed our contacts at the bank to let

them know to stop all work on this file and to not send out any

disclosures.

Tina Demopoulos

Bill A. Lyons

President & CEO

858.244.5770 office

619.789.5629 fax

5469 Kearny Villa Rd. #302

San Diego CA 92123

www.leiholdings.com <http://www.leiholdings.com/>

We started a refinance with Lei financial 80 East Rio Salado Pkw Ste201 Tempe, Arizona 85281 They are out of California but have a branch in Arizona. The loan processor came to our home, made promises she was not planning to keep. Putting us in a stated income loan, and we gave her all our papers, knowing we have had identity theft, she knew we were a little shy of this whole process. Come to find out, they went and pulled more credit, and said they would not, instead of stated income they called the Secretary of State of Arizona to see if the company I worked for was even a company, and the Secretary of State is only the place to find trade names, the company has changed names before. Instead of calling me and asking me about it, the processor sends me an email, and a nasty one at that regarding the company. She has sent me nasty email, and so has the loan officer in her company, saying he spoke to another loan officer and they are sick of our DRAMA! I am an Artistic Director for a Theatre! Drama is my work! I know here in Arizona they are having a hard time, but we are people with a 680 score and identity theft, a $750,000 appraisal, this should not be so hard to finish. I think these companies should stand behind their word, they expect the applicant to do that, and so should they. They are in no position to send nasty emails to anyone, insulting them. Especially when the processor told everyone that the other loan officer had a house that was foreclosed on!

Bruce