* * * * * * * * * * * * * * * * * * * * * * * IN THE MATTER OF: RIVERCREST CREDIT SERVICES ("Respondent") * * * * * * * * * * * * * * * * * * * * * * * | * * * * * * * * * * * | TEMPORARY ORDER TO 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 Section 36a-17 of the Connecticut General Statutes, as amended by Public Acts 14-7 and 14-89, the Commissioner, through the Consumer Credit Division of the Department of Banking, has investigated the activities of Respondent to determine if 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, as amended, 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 . . . 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, (2) require or permit any person to testify, produce a record or file a statement in writing, under oath, or otherwise as the commissioner determines, as to all the facts and circumstances concerning the matter to be investigated or about which an action or proceeding is pending . . . .
Section 36a-52 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.
(b) If the commissioner finds that the public welfare requires immediate action, the commissioner may incorporate a finding to that effect in the notice sent in accordance with subsection (a) of this section and issue a temporary order requiring the person to cease and desist from the activity which constitutes such alleged violation and to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section. Such temporary order shall become effective on receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the notice.
II. MATTERS ASSERTED
| 1. | Respondent is a purported entity with a purported office at 102 Coe Avenue, Middletown, Connecticut. Respondent has neither been licensed to engage in the business of a mortgage lender nor been licensed to act as a mortgage broker in Connecticut. |
| 2. | Respondent offers, via the Internet, to make residential mortgage loans and first time home buyer loans, among other loans, in Connecticut. |
| 3. | Respondent’s website has a “Contact Us” page that consumers can fill out to be contacted by Respondent. |
III. STATUTORY BASIS FOR ORDER TO CEASE AND DESIST
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.
Section 36a-486(a) of the Connecticut General Statutes provides, in pertinent part, that:
No person shall engage in the business of making residential mortgage loans or act as a mortgage broker in this state unless such person has first obtained the required license for its main office . . . in accordance with the provisions of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b. . . . A person, other than a licensed mortgage loan originator acting on behalf of a mortgage lender or mortgage correspondent lender, shall be deemed to be engaged in the business of making residential mortgage loans if such person advertises, causes to be advertised, solicits or offers to make residential mortgage loans, either directly or indirectly. A person, other than a licensed mortgage loan originator acting on behalf of a mortgage broker, shall be deemed to be acting as a mortgage broker if such person advertises or causes to be advertised that such person will negotiate, solicit, place or find a residential mortgage loan, either directly or indirectly. . . .
| 1. | Respondent engaged in the business of making residential mortgage loans without a license by advertising, soliciting or offering to make residential mortgage loans via its website, as more fully described in paragraphs 1 through 3, inclusive, of the Matters Asserted, in violation of Section 36a-486(a) of the Connecticut General Statutes. Such violation forms a basis to issue an order to cease and desist pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes. |
| 2. | Respondent acted as a mortgage broker without a license by advertising via its website that it would negotiate, solicit, place or find residential mortgage loans, either directly or indirectly, as more fully described in paragraphs 1 through 3, inclusive, of the Matters Asserted, in violation of Section 36a-486(a) of the Connecticut General Statutes. Such violation forms a basis to issue an order to cease and desist pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes. |
IV. FINDING AND STATUTORY BASIS FOR
TEMPORARY ORDER TO CEASE AND DESIST
The Commissioner finds that the public welfare requires immediate action to issue a temporary order requiring Respondent to cease and desist from violating Section 36a-486(a) of the Connecticut General Statutes, and to take such action as set forth herein to effectuate the purposes of Section 36a-52(b) of the Connecticut General Statutes, in that the interests of Connecticut residents may be materially prejudiced by Respondent continuing to advertise, solicit or offer residential mortgage loans in Connecticut, while not being duly licensed as a mortgage lender or mortgage broker in Connecticut, and not complying with the restrictions imposed on such licensees pursuant to Sections 36a-485 to 36a-534c, inclusive, of the Connecticut General Statutes.
V. TEMPORARY ORDER TO CEASE AND DESIST, NOTICE OF INTENT
TO ISSUE ORDER TO CEASE AND DESIST AND NOTICE OF RIGHT TO HEARING
WHEREAS, the Commissioner has reason to believe that Respondent has engaged in acts or conduct which forms a basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes;
AND WHEREAS, the Commissioner has made the finding required under Section 36a-52(b) of the Connecticut General Statutes.
THE COMMISSIONER THEREFORE ORDERS, pursuant to the authority granted in Section 36a-52(b) of the Connecticut General Statutes, that Rivercrest Credit Services immediately CEASE AND DESIST from violating Section 36a-486(a) of the Connecticut General Statutes. This Temporary Order to Cease and Desist shall become effective upon receipt by Rivercrest Credit Services, and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order to Cease and Desist.
THE COMMISSIONER FURTHER ORDERS, pursuant to Sections 36a-17(a) and 36a-52(b) of the Connecticut General Statutes, that: Not later than fourteen (14) days from receipt of this Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing, Rivercrest Credit Services shall provide to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov:
1. | A list of all individuals who from October 1, 2014 to the present, have either: (a) made an inquiry to Respondent concerning a residential mortgage loan in Connecticut, or (b) submitted an application to Respondent for a loan to be secured by residential property in Connecticut. The list shall include the individual’s name, address, date and nature of request. Respondent shall also provide copies of all underlying inquiry and application documentation; |
| 2. | A detailed accounting of all loan transactions consummated since October 1, 2014, in which the loan was secured by residential property in Connecticut, and Respondent was the lender of record or, in whole or in part, brokered the transaction, including the borrower’s name, address, date of transaction, role of Respondent, loan amount, prepaid finance charge and interest rate. Respondent shall provide copies of all corresponding executed settlement statements, notes, residential mortgages or other evidence of indebtedness, mortgage deeds, modifications, assignments and disclosures provided to mortgagors required by state or federal law; and |
| 3. | A detailed accounting of all mortgage payments received by Respondent since October 1, 2014, in connection with a loan secured by residential property in Connecticut, including the name and address of the mortgagor and mortgagee, amounts of each payment, dates made, and corresponding loan amount, funding date and interest rate. In addition, Respondent shall provide copies of all notices and collection letters sent to mortgagors concerning such mortgage payments. |
NOW THEREFORE, notice is hereby given to Respondent that the Commissioner intends to issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-486(a) of the Connecticut General Statutes, subject to its 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 Respondent’s receipt of this Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing as set forth in Section 36a-52(a) of the Connecticut General Statutes. This Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist 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 a 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 February 24, 2015, 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 or fails to appear at any hearing, the Commissioner will issue an order that Respondent cease and desist from violating Section 36a-486(a) of the Connecticut General Statutes.
So ordered at Hartford, Connecticut
this 2 day of January 2015. ________/s/_________
Howard F. Pitkin
Banking Commissioner
CERTIFICATION
I hereby certify that on this 2nd day of January 2015, the foregoing Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Rivercrest Credit Services, 102 Coe Avenue, Middletown, Connecticut 06457, certified mail no. 70120470000147903546.
_________/s/_________
Doniel Kitt
Prosecuting Attorney