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IN THE MATTER OF: |
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CONSENT ORDER |
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Part I of Chapter 668, Sections 36a-485 to 36a-534c, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators”;
WHEREAS, CTHM, LLC d/b/a Connecticut Home Mortgage (“Connecticut Home Mortgage”) is a Delaware limited liability company that is currently licensed as a mortgage correspondent lender under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
WHEREAS, on November 14, 2012, the Commissioner, through the Consumer Credit Division of the Department of Banking, initiated an on-site investigation pursuant to Section 36a-17(a) of the 2012 Supplement to the General Statutes, as amended by Public Act 12-96, and Section 36a-498f of the Connecticut General Statutes, into the activities of Connecticut Home Mortgage to determine if it had violated, was violating or was about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner;
WHEREAS, as a result of such investigation, the Commissioner alleges that Connecticut Home Mortgage was engaged in the business of a mortgage correspondent lender from twenty (20) locations without obtaining required branch office licenses for such locations, in violation of Section 36a-486 of the 2012 Supplement to the General Statutes, as amended by Public Act 12-96;
WHEREAS, Connecticut Home Mortgage asserts that it had a good faith belief that the locations referenced above did not have to be licensed as branch offices and has been engaged in a constructive dialogue with the Commissioner’s staff on this issue;
WHEREAS, the Commissioner believes that such allegations would support initiation of enforcement proceedings against Connecticut Home Mortgage, including proceedings to revoke Connecticut Home Mortgage’s license pursuant to Section 36a-494(a) of the 2012 Supplement to the General Statutes, as amended by Public Act 12-96, and subsections (a) and (b) of Section 36a-51 of the 2012 Supplement to the General Statutes, issue a cease and desist order against Connecticut Home Mortgage pursuant to Sections 36a-494(b) of the 2012 Supplement to the General Statutes, as amended by Public Act 12-96, and Section 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty of up to one hundred thousand dollars ($100,000) per violation on Connecticut Home Mortgage pursuant to Sections 36a-494(b) of the 2012 Supplement to the General Statutes, as amended, and 36a-50(a) of the Connecticut General Statutes, as amended by Public Act 12-96;
WHEREAS, initiation of such enforcement proceedings would constitute a “contested case” within the meaning of Section 4-166(2) of the Connecticut General Statutes;
WHEREAS, Section 4-177(c) of the Connecticut General Statutes and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by consent order, unless precluded by law;
WHEREAS, both the Commissioner and Connecticut Home Mortgage acknowledge the possible consequences of formal administrative proceedings, and Connecticut Home Mortgage voluntarily agrees to consent to the entry of the sanctions described below without admitting or denying any allegation contained herein and solely for the purpose of obviating the need for formal administrative proceedings concerning the allegations contained herein;
WHEREAS, Connecticut Home Mortgage acknowledges that this Consent Order is a public record and is a reportable event for purposes of the regulatory disclosure questions on the Nationwide Mortgage Licensing System and Registry (“NMLS”), as applicable;
WHEREAS, Connecticut Home Mortgage herein represents to the Commissioner that the 20 locations alleged to be unlicensed locations in violation of Section 36a-486(a) of the 2012 Supplement to the General Statutes, as amended, are all either currently licensed as branches of Connecticut Home Mortgage under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes or are not engaged in any mortgage-related activity by Connecticut Home Mortgage that would require such locations to be licensed as branches of Connecticut Home Mortgage under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
WHEREAS, Connecticut Home Mortgage herein represents to the Commissioner that it has reviewed and updated its internal policies, procedures and controls for assessing whether a location is engaged in mortgage-related activity that requires Connecticut Home Mortgage to obtain a branch license from the Commissioner under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
AND WHEREAS, Connecticut Home Mortgage, through its execution of this Consent Order, voluntarily agrees to waive its procedural rights, including a right to notice and an opportunity for hearing as it pertains to the allegations set forth herein, and voluntarily waives its rights to seek judicial review or otherwise challenge or contest the validity of this Consent Order.
CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Connecticut Home Mortgage, through its execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanctions:
No later than the date this Consent Order is executed by Connecticut Home Mortgage, Connecticut Home Mortgage shall remit to the Department of Banking by wire transfer the sum of One Hundred Thousand Dollars ($100,000), Twenty Thousand Dollars ($20,000) of which shall constitute a civil penalty and Eighty Thousand Dollars ($80,000) of which shall represent past due licensing fees.
CONSENT ORDER
NOW THEREFORE, the Commissioner enters the following:
| 1. | The Sanctions set forth above be and are hereby entered; |
| 2. | Upon issuance of this Consent Order by the Commissioner, all allegations of unlicensed mortgage-related activity by Connecticut Home Mortgage prior to the November 14, 2012 investigation, and including the allegations set forth herein as a result of the November 14, 2012 investigation, will be resolved and the Commissioner will not take any future enforcement action against Connecticut Home Mortgage based upon such allegations; provided that issuance of this Consent Order is without prejudice to the right of the Commissioner to take enforcement action against Connecticut Home Mortgage based upon a violation of this Consent Order or the matters underlying its entry, if the Commissioner determines that compliance with the terms herein is not being observed or if any representation made by Connecticut Home Mortgage and reflected herein is subsequently discovered to be untrue; |
| 3. | So long as this Consent Order is promptly disclosed by Connecticut Home Mortgage on NMLS, nothing in the issuance of this Consent Order shall adversely affect the ability of Connecticut Home Mortgage to apply for or obtain licenses or renewal licenses under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, and |
| 4. | This Consent Order shall become final when issued. |
Issued at Hartford, Connecticut
this 25th day of February 2013. ________/s/_________
Howard F. Pitkin
Banking Commissioner
I, S. Michael Lucash, state on behalf of CTHM, LLC d/b/a Connecticut Home Mortgage, that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of CTHM, LLC d/b/a Connecticut Home Mortgage; and that CTHM, LLC d/b/a Connecticut Home Mortgage agrees freely and without threat or coercion of any kind to comply with the sanctions entered herein.
By: ________/s/________
Name: S. Michael Lucash
Title: Vice President
CTHM, LLC
d/b/a Connecticut Home Mortgage
State of: Connecticut
County of: Fairfield
On this the 19th day of February 2013, before me, Hazel Meredith, the undersigned officer, personally appeared S. Michael Lucash who acknowledged himself/herself to be the V.P. of CTHM, LLC d/b/a Connecticut Home Mortgage, a member managed/manager managed limited liability company, and that he/she as such V.P., being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company by himself/herself as S. Michael Lucash.
In witness whereof I hereunto set my hand.
_________/s/_________
Notary Public
Date Commission Expires: 8/31/14