| * * * * * * * * * * * * * * * * * * * * * * IN THE MATTER OF: ("Respondent") * * * * * * * * * * * * * * * * * * * * * * | * * * * * * * * * * * * * * | NOTICE OF INTENT TO REVOKE NOTICE OF INTENT TO ISSUE NOTICE OF INTENT TO IMPOSE AND NOTICE OF RIGHT TO HEARING |
I. LEGAL AUTHORITY AND JURISDICTION
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”.
Pursuant to the authority granted by Sections 36a-17(a) and 36a-498f of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondent to determine whether it has violated, is violating or is about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner.
Section 36a-17(a) of the Connecticut General Statutes provides, in pertinent part, that:
The commissioner, in the commissioner’s discretion, may, subject to the provisions of section 36a-21 and the Freedom of Information Act, as defined in section 1-200; (1) make such public or private investigations or examinations within or outside this state, concerning any person subject to the jurisdiction of the commissioner, as the commissioner deems necessary to carry out the duties of the commissioner . . . .
Section 36a-498f(a) of the Connecticut General Statutes provides, in pertinent part, that:
In addition to any authority provided under this title, the Banking Commissioner shall have the authority to conduct investigations and examinations as follows:
(1) For purposes of . . . license revocation or termination, or general or specific inquiry or investigation to determine compliance with sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, the commissioner may access, receive and use any books, accounts, records, files, documents, information or evidence including, but not limited to: (A) Criminal, civil and administrative history information; (B) personal history and experience information including independent credit reports obtained from a consumer reporting agency described in Section 603(p) of the federal Fair Credit Reporting Act, 15 USC 1681a; and (C) any other documents, information or evidence the commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control or custody of such documents, information or evidence.
Section 36a-51 of the Connecticut General Statutes provides, in pertinent part, that:
(a) The commissioner may . . . revoke . . . any license issued by the commissioner under any provision of the general statutes by sending a notice to the licensee by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the licensee on the earlier of the date of actual receipt or seven days after mailing or sending. Any such notice shall include: (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes . . . involved; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that the licensee may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice. . . .
(b) If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless the licensee fails to appear at the hearing. After the hearing, the commissioner shall . . . revoke . . . the license for any reason set forth in the applicable licensing provisions of the general statutes if the commissioner finds sufficient grounds exist for such . . . revocation . . . . If the licensee does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall . . . revoke . . . the license. No such license shall be . . . revoked except in accordance with the provisions of chapter 54.
Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that:
Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the person on the earlier of the date of actual receipt, or seven days after mailing or sending. Any such notice shall include: (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes . . . alleged to have been violated; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice. If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice, unless the person fails to appear at the hearing. After the hearing, the commissioner shall determine whether an order to cease and desist should be issued against the person named in the notice. If the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person. No such order shall be issued except in accordance with the provisions of chapter 54.
Section 36a-50(a) of the Connecticut General Statutes, provides, in pertinent part, that:
(1) Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending. Any such notice shall include: (A) A statement of the time, place, and nature of the hearing; (B) a statement of the legal authority and jurisdiction under which the hearing is to be held; (C) a reference to the particular sections of the general statutes . . . alleged to have been violated; (D) a short and plain statement of the matters asserted; (E) the maximum penalty that may be imposed for such violation; and (F) a statement indicating that such person may file a written request for a hearing on the matters asserted not later than fourteen days after receipt of the notice.
(2) If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless such person fails to appear at the hearing. After the hearing, if the commissioner finds that the person has violated any such provision, . . . the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by law, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person. If such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.
(3) Each action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54.
Section 4-182(c) of the Connecticut General Statutes provides, in pertinent part, that:
No revocation, suspension, annulment or withdrawal of any license is lawful unless, prior to the institution of agency proceedings, the agency gave notice by mail to the licensee of facts or conduct which warrant the intended action, and the licensee was given an opportunity to show compliance with all lawful requirements for the retention of the license. . . .
II. MATTERS ASSERTED
| 1. | Respondent is a New York corporation with its main office at 707 Westchester Avenue, Suite 305, White Plains, New York. |
| 2. | Respondent has been licensed as a mortgage correspondent lender in Connecticut on the Nationwide Mortgage Licensing System and Registry (“NMLS”) since August 14, 2008. |
| 3. | On July 31, 2012, the Commissioner, through the Division, conducted an examination of Respondent. |
| 4. | On April 10, 2013 the Division mailed the Report of Examination of the July 31, 2012 examination (“ROE”) to Respondent, and requested that a detailed report of corrective action taken by Respondent to the citations contained in the ROE be submitted to the Division within thirty (30) days. |
| 5. | On May 30, 2013, pursuant to Section 4-182(c) of the Connecticut General Statutes, the Division sent a letter to Respondent indicating that no response to the ROE had been received. The letter gave Respondent an opportunity to respond to the issues raised in the ROE and to show compliance with all lawful requirements for retention of its mortgage correspondent lender license in Connecticut (“Compliance Letter”) within 15 days of the date of the Compliance Letter. |
| 6. | To date, Respondent has failed to provide a detailed response to the ROE and Compliance Letter. |
III. STATUTORY BASIS FOR REVOCATION OF MORTGAGE
CORRESPONDENT LENDER LICENSE, ORDER TO CEASE AND DESIST
AND IMPOSITION OF CIVIL PENALTY
Section 36a-17(d) of the Connecticut General Statutes provides, in pertinent part, that:
Any person who is the subject of any such investigation . . . [or] examination . . . shall . . . otherwise cooperate with the commissioner.
Section 36a-494(a)(1) of the Connecticut General Statutes provides, in pertinent part, that:
The commissioner may . . . revoke . . . any . . . mortgage correspondent lender . . . license or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, or if the commissioner finds that the licensee . . . has done any of the following: . . . (C) violated any of the provisions of this title . . . .
Section 36a-489(a)(1) of the Connecticut General Statutes provides, in pertinent part, that:
The commissioner shall not issue an initial license for a . . . mortgage correspondent lender . . . unless the commissioner, at a minimum, finds that: . . . ; (C) the applicant demonstrates that the financial responsibility, character and general fitness of the applicant, . . . are such as to command the confidence of the community and to warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b . . . . If the commissioner fails to make such findings, the commissioner shall not issue a license . . . .
Section 36a-494(b) of the Connecticut General Statutes provides, in pertinent part, that:
Whenever it appears to the commissioner that (1) any person has violated, is violating or is about to violate any of the provisions of sections 36a-485 to 36a-498f, inclusive, . . . 36a-534a and 36a-534b, . . . the commissioner may take action against such person . . . in accordance with sections 36a-50 and 36a-52.
| 1. | Respondent’s failure to timely provide the Commissioner a complete and accurate response to the ROE and Compliance Letter, as more fully described in paragraphs 3 through 6, inclusive, of the Matters Asserted, renders the Commissioner unable to determine that Respondent demonstrates financial responsibility, character and general fitness such as to command the confidence of the community and to warrant a determination that Respondent will operate honestly, fairly and efficiently within the purposes of Sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b of the Connecticut General Statutes. Such failure would be sufficient grounds for the Commissioner to deny an application for a mortgage correspondent lender license under Section 36a-489(a)(1)(C) of the Connecticut General Statutes, and would be sufficient grounds for the Commissioner to revoke Respondent’s license to engage in the business of a mortgage correspondent lender in Connecticut pursuant to Section 36a-494(a)(1) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes. |
| 2. | Respondent’s failure to timely provide the Commissioner with a complete and accurate response to the ROE and Compliance Letter, as more fully described in paragraphs 3 through 6, inclusive, of the Matters Asserted, constitutes a failure by Respondent to fully cooperate with the Commissioner, in violation of Section 36a-17(d) of the Connecticut General Statutes. Such violation constitutes grounds to revoke Respondent’s license to engage in the business of a mortgage correspondent lender in Connecticut pursuant to Section 36a-494(a)(1)(C) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, and forms the basis to issue an order to cease and desist pursuant to Section 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty pursuant to Section 36a-50(a) of the Connecticut General Statutes. Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation. |
IV. NOTICE OF INTENT TO REVOKE MORTGAGE CORRESPONDENT
LENDER LICENSE, NOTICE OF INTENT TO ISSUE ORDER
TO CEASE AND DESIST, NOTICE OF INTENT TO IMPOSE CIVIL
PENALTY AND NOTICE OF RIGHT TO HEARING
WHEREAS, the Commissioner has reason to believe that Respondent has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke Respondent’s license to engage in the business of a mortgage correspondent lender in Connecticut pursuant to Sections 36a-494(a)(1) and 36a-494(a)(1)(C) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, and forms the basis to issue an order to cease and desist pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes.
NOW THEREFORE, notice is hereby given to Respondent that the Commissioner intends to REVOKE Respondent’s license to engage in the business of a mortgage correspondent lender in Connecticut, issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-17(d) of the Connecticut General Statutes, and impose a CIVIL PENALTY upon Respondent as set forth herein, subject to Respondent’s right to a hearing on the allegations set forth above.
A hearing will be granted to Respondent if a written request for a hearing is received by the Department of Banking, Consumer Credit Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following its receipt of this Notice of Intent to Revoke Mortgage Correspondent Lender License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in subsections (a) and (b) of Section 36a-51 and Sections 36a-52 and 36a-50 of the Connecticut General Statutes. This Notice of Intent to Revoke Mortgage Correspondent Lender License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing shall be deemed received on the earlier of the date of actual receipt, or seven days after mailing or sending. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”. Once a written request for hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a hearing officer and sets the date of the hearing in accordance with Section 4-177 of the Connecticut General Statutes and Section 36a-1-21 of the Regulations of Connecticut State Agencies. If a hearing is requested, the hearing will be held on October 16, 2013, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
The hearing will be held in accordance with the provisions of Chapter 54 of the Connecticut General Statutes, unless Respondent fails to appear at the requested hearing. At such hearing, Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
If Respondent does not request a hearing within the time prescribed, the Commissioner will issue an order revoking Respondent’s license to engage in the business of a mortgage correspondent lender in Connecticut, will issue an order that Respondent cease and desist from violating Section 36a-17(d) of the Connecticut General Statutes, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Respondent.
Dated at Hartford, Connecticut
this 13th day of August 2013.
________/s/_________
Howard F. Pitkin
Banking Commissioner
CERTIFICATION
I hereby certify that on this 14th day of August 2013, the foregoing Notice of Intent to Revoke Mortgage Correspondent Lender License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Residential Home Funding Corp. d/b/a Residential Home Mortgage Corp. d/b/a Consumer Equity d/b/a The Mortgage Corner, Attention: David Stein, Chief Operations Officer, 100 Lanidex Plaza, 2nd Floor, Parsippany, New Jersey 07054, certified mail no. 70121010000173171826; and Residential Home Funding Corp. d/b/a Residential Home Mortgage Corp. d/b/a Consumer Equity d/b/a The Mortgage Corner, Attention: Thomas Marinaro, President, 100 Lanidex Plaza, 2nd Floor, Parsippany, New Jersey 07054, certified mail no. 70020860000215459816.
________/s/_________
Doniel Kitt
Prosecuting Attorney