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IN THE MATTER OF: FLAHERTY FUNDING ("Flaherty Funding") |
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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, Flaherty Funding is a New York corporation 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 January 14, 2011, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an examination pursuant to Sections 36a-17 and 36a-498f of the Connecticut General Statutes into the activities of Flaherty Funding 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 examination, the Commissioner alleges that Flaherty Funding employed or retained, during the period of April 17, 2007 through December 16, 2009, nine (9) individuals as originators or mortgage loan originators without first registering them, or without such individuals being licensed, in violation of Sections 36a-486(b) and 36a-511(b) of the then applicable Connecticut General Statutes;
WHEREAS, the Commissioner believes that such allegation would support initiation of enforcement proceedings against Flaherty Funding, including proceedings to revoke Flaherty Funding’s licenses pursuant to Section 36a-494(a) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, issue a cease and desist order against Flaherty Funding pursuant to Sections 36a-494(b) and 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 Flaherty Funding pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes;
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 Flaherty Funding acknowledge the possible consequences of formal administrative proceedings, and Flaherty Funding voluntarily agrees to consent to the entry of the sanction described below without admitting or denying any allegation contained herein and solely for the purpose of obviating the need for further formal administrative proceedings concerning the allegation contained herein;
WHEREAS, Flaherty Funding acknowledges that this Consent Order is a public record and, notwithstanding the foregoing paragraph, constitutes a finding by the Commissioner that Flaherty Funding has been involved in a violation of a financial services-related regulation or statute required to be disclosed in response to regulatory disclosure questions on the MU1 Form, MU2 Form or MU4 Form on the Nationwide Mortgage Licensing System and Registry (“NMLS”), as such forms are applicable;
WHEREAS, Flaherty Funding herein represents to the Commissioner that the individuals alleged to be unregistered originators or unlicensed mortgage loan originators in violation of Sections 36a-486(b) and 36a-511(b) of the then applicable Connecticut General Statutes, during the period of April 17, 2007 through December 16, 2009, are either currently licensed as mortgage loan originators under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes or are no longer engaged in any mortgage-related activity with Flaherty Funding that would prohibit Flaherty Funding from engaging the services of such individuals without licensure as mortgage loan originators under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
WHEREAS, Flaherty Funding herein represents to the Commissioner that it has reviewed and updated its internal policies, procedures and controls for assessing whether an individual engaged in mortgage-related activity with Flaherty Funding requires licensure from the Commissioner under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes and agrees that it will not engage the services of an individual as a mortgage loan originator in the future without first confirming that such individual is duly licensed;
AND WHEREAS, Flaherty Funding, 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 allegation 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 SANCTION
WHEREAS, Flaherty Funding, through its execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanction:
No later than the date this Consent Order is executed by Flaherty Funding, Flaherty Funding shall remit to the Department of Banking by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of Nine Thousand Dollars ($9,000) as a civil penalty.
CONSENT ORDER
NOW THEREFORE, the Commissioner enters the following:
| 1. | The Sanction set forth above be and is 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 Flaherty Funding based upon the allegation contained herein; provided that issuance of this Consent Order is without prejudice to the right of the Commissioner to take enforcement action against Flaherty Funding 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 Flaherty Funding and reflected herein is subsequently discovered to be untrue; |
| 3. | So long as this Consent Order is promptly disclosed by Flaherty Funding on NMLS, nothing in the issuance of this Consent Order shall adversely affect the ability of Flaherty Funding 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 for its mortgage loan originators to apply for or obtain licensure from the Commissioner, provided all applicable legal requirements for such license are satisfied; and |
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This Consent Order shall become final when issued.
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Dated at Hartford, Connecticut
this 20th day of July 2011. ________/s/_________
Howard F. Pitkin
Banking Commissioner
I, Gary Hugunine, state on behalf of Flaherty Funding Corporation d/b/a Mortgage Force d/b/a Compass Financial, 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 Flaherty Funding Corporation d/b/a Mortgage Force d/b/a Compass Financial; that Flaherty Funding Corporation d/b/a Mortgage Force d/b/a Compass Financial agrees freely and without threat or coercion of any kind to comply with the sanction entered and terms and conditions ordered herein; and that Flaherty Funding Corporation d/b/a Mortgage Force d/b/a Compass Financial 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: Gary Hugunine
Title: CFO
Flaherty Funding Corporation
d/b/a Mortgage Force
d/b/a Compass Financial
State of: New York
County of: Monroe
On this the 18th day of July 2011, before me, Eleanor L. Pisegna, the undersigned officer, personally appeared Gary Hugunine who acknowledged himself to be the CFO of Flaherty Funding Corporation d/b/a Mortgage Force d/b/a Compass Financial, a corporation, and that he as such CFO, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as CFO.
In witness whereof I hereunto set my hand.
________/s/_________
Notary Public
Date Commission Expires: July 9, 2014