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IN THE MATTER OF:

IMPAC MORTGAGE CORP.
NMLS # 128231

       ("Impac")
   
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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-498f, inclusive, and 36a-534a to 36a-534c, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators”;

WHEREAS, Impac is a California corporation that is currently licensed as a mortgage lender under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, with its main office located at 19500 Jamboree Road, Irvine, California;

WHEREAS, on January 6, 2015, Impac Mortgage Holdings, Inc. and its wholly-owned subsidiary Impac entered into an Asset Purchase Agreement to purchase substantially all of the assets and assume certain liabilities of the residential mortgage lending operations of CashCall, Inc. (“CashCall”), which agreement was subsequently amended and restated effective March 31, 2015 (“Amended and Restated Agreement”);

WHEREAS, by order dated February 4, 2014, the Commissioner had revoked the mortgage lender license of CashCall;

WHEREAS, since March 2015, the purchased residential mortgage lending operations of CashCall operate as a separate division of Impac under the name CashCall Mortgage from a location in Orange, California (“Division”);

WHEREAS, the Amended and Restated Agreement provided that until December 31, 2017, CashCall shall continue to have, subject to Impac’s oversight and control, day-to-day operational authority with respect to the operations of the Division and this provision, which Impac represents was inconsistent with the intent and actual practices of the parties to the Agreement, was subsequently amended as provided below;

WHEREAS, on April 3, 2015, Impac submitted an application through the Nationwide Multistate Licensing System and Registry (“NMLS”) to the Connecticut Department of Banking (“Department”) for a mortgage lending branch license under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, under the tradename CashCall Mortgage for its Division location;

WHEREAS, on April 15, 2015, the Department approved the Division’s application which was in the trade name CashCall Mortgage;

WHEREAS, subsequent to approving the Division’s application, the Department expressed concerns regarding the continued involvement of CashCall and CashCall’s former employees and the use of the CashCall Mortgage tradename in the Division’s residential mortgage lending operations in Connecticut, and to resolve those concerns in February 2016, Impac voluntarily took the following actions:  (1) represented to the Department, via an Affidavit executed by its President, that, among other items, it would not conduct targeted solicitations of Connecticut consumers unless approved by the Department or engage in any retail lending activities in Connecticut for at least two years without the approval of the Department; (2) executed an amendment to its Amended and Restated Agreement to contractually limit CashCall’s continued involvement in its residential mortgage lending operations; (3) surrendered its Connecticut mortgage lender branch license for the Division; and (4) removed “CashCall Mortgage” as a trade name in Connecticut via NMLS;

WHEREAS, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an investigation pursuant to Sections 36a-17(a) and 36a-498f of the Connecticut General Statutes into the activities of Impac 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 Impac:  (1) sent at least 4,000 solicitations pursuant to a portfolio retention program and national direct mail marketing campaign to Connecticut consumers from April to August 2016, which pursuant to Section 36a-486(a) of the Connecticut General Statutes, shall be deemed to be engaging in the business of making residential mortgage loans, from its Division location which was not licensed as a branch location, in violation of Section 36a-486 of the Connecticut General Statutes; and (2) used a fictitious name not approved by the Commissioner by sending the aforesaid solicitations to Connecticut consumers from April to August 2016 using the CashCall Mortgage tradename, in violation of Section 36a-490 of the Connecticut General Statutes;

WHEREAS, the Commissioner believes that the allegations contained herein would support the initiation of enforcement proceedings against Impac, including proceedings to issue a cease and desist order against Impac pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes, a notice of intent to revoke or refuse to renew Impac’s mortgage lender license in Connecticut pursuant to Sections 36a-494(a) and 36a-51 of the Connecticut General Statutes, and a notice of intent to impose a civil penalty of up to One Hundred Thousand Dollars ($100,000) per violation upon Impac pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes;

WHEREAS, in connection with the matters alleged above, Impac has informed the Department that it had previously taken measures to prevent the solicitation of Connecticut consumers and the retail origination of residential mortgage loans in Connecticut and that these measures were completely effective to prevent the retail origination of residential mortgage loans in Connecticut;

WHEREAS, Impac responded thoroughly and promptly to the Commissioner’s several requests for information and documentation and has assured the Commissioner that it is committed to ensuring full compliance with all applicable laws;

WHEREAS, initiation of such enforcement proceedings would constitute a “contested case” within the meaning of Section 4-166(4) 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 Impac acknowledge the possible consequences of formal administrative proceedings, and Impac voluntarily agrees to consent to the entry of the sanctions imposed below without admitting any allegation set forth herein and solely for the purpose of obviating the need for formal administrative proceedings concerning the allegations set forth herein;

WHEREAS, the Commissioner and Impac now desire to resolve the matters set forth herein;

WHEREAS, Impac specifically assures the Commissioner that the violations alleged herein shall not occur in the future;

WHEREAS, Impac represents that it has implemented adequate policies and procedures to ensure that Impac will never solicit Connecticut consumers using a tradename containing “CashCall” in the future;

WHEREAS, Impac represents that it will not engage in retail residential mortgage lending in Connecticut without the approval of the Department for a period of one year from the date this Consent Order is issued;

WHEREAS, Impac represents that CashCall is only involved in Impac’s mortgage lending operations from its Division location, and that there are no individuals employed or compensated by CashCall at its Irvine, California location;

WHEREAS, Impac represents that CashCall will not have any involvement in its residential mortgage lending operations in Connecticut in the future;

WHEREAS, both the Commissioner and Impac acknowledge that while nothing in this Consent Order constitutes a “finding” for any purpose, Impac acknowledges that this Consent Order is a public record and is a reportable event for purposes of the regulatory disclosure questions on NMLS, as applicable;

AND WHEREAS, Impac, through its execution of this Consent Order, voluntarily agrees to waive its procedural rights, including a right to a notice and an opportunity for a hearing as it pertains to the allegations set forth herein, and voluntarily waives its right to seek judicial review or otherwise challenge or contest the validity of this Consent Order.


CONSENT TO ENTRY OF SANCTIONS

WHEREAS, Impac, through its execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanctions:

1. No later than the date this Consent Order is executed by Impac, it shall remit to the Department of Banking by wire transfer, cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of Fifty Thousand Dollars ($50,000) as a civil penalty; and
2. Impac shall not engage in the business of making residential mortgage loans in Connecticut from an unlicensed location, in violation of Section 36a-486 of the Connecticut General Statutes, or use a fictitious name not approved by the Commissioner, in violation of Section 36a-490 of the Connecticut General Statutes.


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, this matter will be resolved and the Commissioner will not take any future enforcement action against Impac based upon the allegations set forth herein; provided that issuance of this Consent Order is without prejudice to the right of the Commissioner to take enforcement action against Impac 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 Impac and reflected herein is subsequently discovered to be untrue;
3. So long as this Consent Order is promptly disclosed by Impac and its control persons, as applicable, on NMLS, nothing in the issuance of this Consent Order shall adversely affect the ability of Impac 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, provided all applicable legal requirements for such license are satisfied; and
4. This Consent Order shall become final when issued.


Issued at Hartford, Connecticut
this 1st day of June 2017.                    ______/s/__________
                                                       Jorge L. Perez
                                                       Banking Commissioner

I, Ronald Morrison, state on behalf of Impac Mortgage Corp., 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 Impac Mortgage Corp.; that Impac Mortgage Corp., agrees freely and without threat or coercion of any kind to comply with the sanctions entered herein; and that Impac Mortgage Corp., voluntarily agrees to enter into this Consent Order, expressly waiving the procedural rights set forth herein as to the matters described herein.

                                                 By: ________/s/___________
                                                       Name:  Ronald Morrison
                                                       Title:  G.C.
                                                       Impac Mortgage Corp.


State of:  _________________

County of:  ________________

On this the _______ day of ___________ 2017, before me, ________________, the undersigned officer, personally appeared __________________ who acknowledged himself/herself to be the _______________ of Impac Mortgage Corp., a corporation, and that he/she as such _______________ being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself/herself as ______________.

In witness whereof I hereunto set my hand.


                                                     __________/s/___________
                                                     Notary Public  
                                                     Date Commission Expires: 

Administrative Orders and Settlements