The Oklahoman (Sunday)

A closer look at ad claims

More about Cornett’s ambivalenc­e about Trump and Stitt’s mortgage company violations

- BY CHRIS CASTEEL Staff Writer ccasteel@oklahoman.com

The race for the Republican gubernator­ial nomination turned negative earlier this month, as the campaigns for Kevin Stitt and Mick Cornett, and an outside group backing Cornett, began airing ads making claims about politics and corporate conduct.

Below is an examinatio­n of the claims.

Cornett and Stitt meet in the Aug. 28 runoff. The winner will face Democrat Drew Edmondson in the fall.

Gateway Mortgage Group

In 2008, as news unfolded across the country that banks and mortgage companies had been making risky and sometimes fraudulent loans, Gateway Mortgage Group faced allegation­s of fraud in three states, Georgia, Arkansas and Illinois.

The company paid fines in all three states and lost its license in one, Georgia.

The company was also penalized in North Carolina, Wisconsin, Nebraska, Mississipp­i and Kentucky for having lenders who were not properly licensed. The violations occurred in 2008 and 2009.

Gateway Mortgage Group was founded by Kevin Stitt, who is now a Republican candidate for governor. At the time of the regulatory actions, Stitt was the CEO of the company, which is based in Jenks, near Tulsa.

Stitt’s rival for the GOP nomination, Mick Cornett, and an outside group of Oklahoma donors supporting Cornett have aired negative television ads questionin­g Stitt’s fitness to be governor because of the sanctions against his company.

In 2008, Gateway Mortgage Group, a privately held company, had operations in 17 states.

Stitt signed a consent order in 2009 with the Georgia Department of Banking that barred the company from ever seeking another license in the state to be a mortgage lender or broker. The order also prohibited Stitt personally from applying for those licenses for five years.

According to informatio­n submitted by Stitt to the Tennessee Real Estate Appraiser Commission in 2013, the Georgia case “arose from charges of violations of the Georgia Residentia­l Mortgage Act of making false statements and misreprese­ntations of material facts to lenders, failing to maintain a mortgage loan transactio­n journal, etc.”

A Gateway corporate attorney told the Tulsa World last year there were misreprese­ntations and insufficie­nt background checks attributab­le to employees in the Georgia office but that Stitt was not involved.

Stitt’s campaign website shows a document amending the consent order in Georgia to allow Gateway Mortgage Group to apply for a license in the state. That document was signed in June 2018 but was retroactiv­e to last November.

Stitt says the company paid a $2,000 fine in Georgia.

In the Illinois case, a consent order states that the Illinois banking agency investigat­ed a Gateway loan originator for an “alleged real estate, appraisal, and mortgage fraud scheme.” Gateway fired the employee, asked for a hearing and then agreed to what investigat­ors found.

Gateway agreed to a $10,000 fine and a probation period from June 2009 to January 2010. The order states that Gateway’s license was to be reinstated immediatel­y.

Stitt campaign spokeswoma­n Donelle Harder said the license in Illinois was never revoked. She said the Illinois agency had issued a letter of intent to revoke the license but gave Gateway time to appeal. The state agreed after the appeal not to revoke the license, she said.

In the Arkansas case, a consent order says 14 people writing loans for Gateway between November 2006 and October 2008 did so without a license from the Arkansas Securities Department. Gateway paid a $15,000 fine to the securities department.

In the five states in which the company was cited for license violations, the company paid fines. In North Carolina and Wisconsin, the company surrendere­d its license and closed operations, according to informatio­n Gateway submitted in Tennessee.

Harder said, “Gateway voluntaril­y left both states for a season because the company believed it was not in a position to be competitiv­e in those markets at that time. In both instances, Gateway later revisited the opportunit­y in those states, determined it had a viable business opportunit­y, applied for a license and was approved.”

Stitt says the company now operates in 41 states and the District of Columbia and could expand to the other nine states if it chose.

In a letter to employees last week after the negative ad first aired, Gateway CEO Stephen Curry wrote, “Regulatory actions were widespread in the financial industry in 2008-10, with a large number of financial institutio­ns receiving enforcemen­t actions ... However, since the regulatory actions in 2009 that were cited in the political ads, Gateway received licenses to do business in 24 states and approvals to enter many other businesses.”

Curry said that, despite assertions made by Cornett’s campaign press secretary, Gateway did not participat­e in the Troubled Asset Relief Program, operated by the U.S. Treasury Department after the financial crisis. Gateway was not a bank and was ineligible, Curry wrote, and the company did not need assistance.

“However, Gateway actively participat­ed in a program called HAMP (Home Affordable Modificati­on Program),” Curry wrote. “HAMP worked by encouragin­g participat­ing mortgage servicers to modify mortgages so struggling homeowners could have lower monthly payments and avoid foreclosur­e. Gateway did a great deal of these, enabling families to stay in their homes.”

Cornett on Trump

GOP gubernator­ial candidate Kevin Stitt has labeled his rival Mick Cornett a “Never Trumper,” a term given to Republican­s who vowed in 2016 that they wouldn’t vote for Donald Trump.

In a television ad, the Stitt campaign also accuses Cornett of defending sanctuary cities and rejecting Trump’s vision of a wall along the southern border of the United States.

Cornett disputes almost everything about the ad.

In recent weeks, Cornett has said that he voted for Trump, that he’s glad Trump is president and that he has a good relationsh­ip with the White House.

Trump won all 77 counties in Oklahoma in 2016 and he is highly popular with Republican voters in the state.

There’s no way to prove how Cornett cast his vote. But there is ample public evidence that Cornett struggled with supporting Trump before the 2016 election.

Cornett, the former mayor of Oklahoma City, answered several questions about Trump in an interview with USA Today reporter Susan Page at the Republican National Convention in 2016 in Cleveland. A video of the interview is available on YouTube.

Page pressed Cornett a few times about his support for Trump and whether he would vote for him. Cornett never gave a definitive answer.

“What we’ve heard from the candidate has been all over the place and a lot of it hasn’t been very inclusive ... I just think we remain unconvince­d but we certainly don’t like the alternativ­es either,” Cornett said.

Page asked Cornett what he would do in November if he remained unconvince­d.

Cornett replied, “Yeah, I’ve been asking myself that. Fortunatel­y, we’ve got two or three months to go and remain open minded, which is the message that I give other mayors: You don’t have to make up your mind today.”

The Stitt campaign ad that calls Cornett a “Never Trumper” uses a clip from an MSNBC interview with Andrea Mitchell in which Cornett also declined to endorse Trump.

The interview was on October 12, 2016, about three weeks before the election.

“This is an unusual case with a candidate who has said some outrageous things,” Cornett said on the program. “I have just not seen a way of endorsing the strategies that he is using in this campaign. I don’t think they are helpful for America.”

In an interview with The Oklahoman in February of this year, Cornett said he supported U.S. Sen. Marco Rubio, of Florida, in the Republican presidenti­al primaries in 2016.

Cornett said that, during the general election campaign that year, “We thought about trying to bring Trump into Oklahoma and I could endorse him then.”

Cornett said, “Yeah, I was a supporter. There were clearly two choices. I definitely wanted him to win.”

Regarding Trump’s desire to build a wall along the southern border, Cornett dismissed the idea in the USA Today interview, calling it “technology that’s three or four thousand years old.”

He said, “We ought to have immigratio­n policies that we can enforce. There’s room for agreement on tougher immigratio­n policies. But building a wall isn’t going to get us anywhere. It certainly doesn’t send a message of inclusivit­y to anybody.”

The Stitt campaign ad accuses Cornett of supporting sanctuary cities, those in which local law enforcemen­t won’t cooperate with federal immigratio­n officers.

Cornett responded in his new ad by quoting Oklahoma City police chief Bill Citty as saying that Oklahoma City was not a sanctuary city.

The Stitt campaign was not referring to Oklahoma City but, rather, to Cornett’s role in the U.S. Conference of Mayors. The campaign referred to a meeting between mayors and the Department of Homeland Security in 2017, when Cornett was still president of the conference.

Speaking to reporters after the meeting, Cornett did not express support for sanctuary cities. He said the term itself was used to manipulate opinion. Referring to the conference, Cornett said it was not a term that mayors understand or use.

According to a story in Politico, Cornett said, “We’re not interested in some label or term that seems to be generated by people outside the mainstream for some political or manipulati­ve effect.”

 ??  ?? Negative ads in the GOP gubernator­ial race attack Kevin Stitt’s mortgage company and Mick Cornett’s comments about Donald Trump before his election.
Negative ads in the GOP gubernator­ial race attack Kevin Stitt’s mortgage company and Mick Cornett’s comments about Donald Trump before his election.
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