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IN THE MATTER OF: MORTGAGE STORE OF ("Respondent")
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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 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 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 provides that:
The commissioner, in the commissioner’s discretion, may 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 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 initial licensing, license renewal, license suspension, license conditioning, 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.
(2) For the purposes of investigating violations or complaints arising under sections 36a-485 to 36a-498f, inclusive, 36a-534a or 36a-534b or for the purposes of examination, the commissioner may review, investigate or examine any licensee, individual or person subject to said sections as often as necessary in order to carry out the purposes of said sections. The commissioner may direct, subpoena or order the attendance of and examine under oath all persons whose testimony may be required about the loans or the business or subject matter of any such examination or investigation, and may direct, subpoena or order such person to produce books, accounts, records, files and any other documents the commissioner deems relevant to the inquiry.
Subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes provide, in pertinent part, that:
(a) The commissioner may . . . revoke or refuse to renew 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 or refuse to renew 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 or refusal to renew. 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 or refuse to renew 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 within fourteen days of 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 of the Connecticut General Statutes provides, in pertinent part, that:
(b) When a licensee has made timely and sufficient application for the renewal of a license or a new license with reference to any activity of a continuing nature, the existing license shall not expire until the application has been finally determined by the agency, and, in case the application is denied or the terms of the new license limited, until the last day for seeking review of the agency order or a later date fixed by order of the reviewing court.
(c) 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 Connecticut limited liability company with an office at 3190 Whitney Avenue, Building 1, Hamden, Connecticut. |
| 2. |
Since May 17, 2011, Respondent has been licensed to act as a mortgage broker in Connecticut under Part I of Chapter 668, Sections 36a-485 to 36a-534c, inclusive, of the Connecticut General Statutes. |
| 3. |
On September 7, 2011, the Commissioner, through the Division, conducted an examination of Respondent. |
| 4. |
The examination referred to in paragraph 3 above disclosed that Respondent (a) employed or retained, during the period of May 5, 2008 through January 1, 2009, three (3) individuals who were not registered originators or licensed mortgage loan originators under Section 36a-489 of the then applicable Connecticut General Statutes; (b) listed on its Form MU1 “Uniform Mortgage Lender/Mortgage Broker Form” (“Form MU1”), filed with the Nationwide Mortgage Licensing System and Registry (“NMLS”), a qualifying individual who was never present at its main office; and (c) answered “no” to Question 29. a) of its Uniform Manager’s Questionnaire dated August 22, 2011 (“Questionnaire”), which asked “[h]as the institution or any officer, principal, partner, owner, director or employee been a defendant or been indicted in any criminal or civil litigation initiated during the past thee (3) years?”, when, in fact, Anthony J. Ranciato, President of Respondent, was a defendant in at least two civil actions filed within the past three years.
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| 5. |
On November 16, 2011, pursuant to Section 4-182(c) of the Connecticut General Statutes, the Division sent a letter to Respondent giving Respondent an opportunity to show compliance with all lawful requirements for retention of its mortgage broker license in Connecticut (“Compliance Letter”). |
| 6. |
To date, Respondent has failed to respond to the Compliance Letter. |
| 7. |
On December 5, 2011, Respondent requested renewal of its mortgage broker license on NMLS for the January 1, 2012 through December 31, 2012 renewal period.
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III. STATUTORY BASIS FOR REVOCATION AND REFUSAL TO RENEW
MORTGAGE BROKER LICENSE, ORDER TO CEASE AND
DESIST AND IMPOSITION OF CIVIL PENALTY
Section 36a-494 of the Connecticut General Statutes provides, in pertinent part, that:
(a)(1) The commissioner may . . . revoke or refuse to renew any . . . mortgage broker 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, any control person of the licensee, the qualified individual or branch manager with supervisory authority, trustee, employee or agent of such licensee has done any of the following: . . . (C) violated any of the provisions of this title . . . .
(b) Whenever it appears to the commissioner that 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 or licensee in accordance with sections 36a-50 and 36a-52.
Section 36a-486(b) of the Connecticut General Statutes, in effect May 5 through June 30, 2008, provided, in pertinent part, that:
No licensee shall employ or retain an originator without first registering
such originator under sections 36a-485 to 36a-498a, inclusive, provided such registration shall not be required for any originator who is registered by such licensee under sections 36a-510 to 36a-524, inclusive. . . .
Section 36a-486(b) of the Connecticut General Statutes, as amended by Public Act 08-176, effective July 1, 2008, provided, in pertinent part, that:
No person licensed as a . . . mortgage broker shall employ or retain a mortgage loan originator unless such mortgage loan originator is licensed under sections 36a-485 to 36a-498a, inclusive. . . .
Section 36a-488(a)(1) of the Connecticut General Statutes provides, in pertinent part, that:
The commissioner shall not issue . . . a mortgage broker license to any person unless such person meets the following . . . experience requirements, as applicable: . . . (B) a . . . mortgage broker shall have, at the main office for which the license is sought, a qualified individual and, at each branch office, a branch manager who have supervisory authority over the lending or brokerage activities who have at least three years’ experience in the mortgage business within the five years immediately preceding the date of the application for the license and who, effective April 1, 2010, have completed the prelicensing education requirement described in section 36a-489a and passed a written test that meets the test requirement described in section 36a-489a. As used in this subdivision, “experience in the mortgage business” means paid experience in the origination, processing or underwriting of residential mortgage loans, the marketing of such loans in the secondary market or in the supervision of such activities, or any other relevant experience as determined by the commissioner.
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 broker unless the commissioner, at a minimum, finds that: (A) The applicant meets the requirements of subsection (a) of section 36a-488 . . . .
Section 36a-489(a)(2)(A) of the Connecticut General Statutes, as amended by Public Act 11-216, provides, in pertinent part, that:
The minimum standards for license renewal for a . . . mortgage broker shall include the following: (i) The applicant continues to meet the minimum standards under subdivision (1) of this subsection . . . .
Section 36a-489(a)(2)(B) of the Connecticut General Statutes, as amended by Public Act 11-216, provides in pertinent part, that:
The license of a . . . mortgage broker failing to satisfy the minimum standards for license renewal shall expire. . . .
Section 36a-53a of the Connecticut General Statutes provides that:
No person shall make or cause to be made orally or in any document filed with the commissioner or in any proceeding, investigation or examination under this title, any statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect.
| 1. |
Respondent’s employing or retaining three (3) individuals who were not registered as originators or licensed as mortgage loan originators, as more fully described in paragraph 4 of the Matters Asserted, constitutes three (3) violations of Section 36a-486(b) of the then applicable Connecticut General Statutes. Such violations constitute sufficient grounds for the Commissioner to revoke and refuse to renew Respondent’s license to act as a mortgage broker 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. Such violations also form 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 to impose a civil penalty pursuant to Sections 36a-494(b) and 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. |
| 2. |
Respondent’s failure to have at its main office a qualified individual, as more fully described in paragraph 4 of the Matters Asserted, constitutes sufficient grounds for the Commissioner to deny an application for a mortgage broker license under Section 36a-488(a)(1)(B) of the Connecticut General Statutes, which constitutes sufficient grounds for the Commissioner to revoke and refuse to renew Respondent’s license to act as a mortgage broker in Connecticut pursuant to Section 36a-494(a)(1) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes. Such failure to have a qualified individual also causes Respondent to fail to meet minimum standards for renewal under Section 36a-489(a)(2)(A) of the Connecticut General Statutes, as amended, which shall cause such license to expire. |
| 3. |
Respondent’s “no” response on its Questionnaire, as more fully described in paragraph 4 of the Matters Asserted, constitutes the making or causing to be made in a document filed with the Commissioner a statement which is, at the time and in the light of the circumstance under which it is made, false and misleading in a material respect, in violation of Section 36a-53a of the Connecticut General Statutes. Such violation constitutes sufficient grounds for the Commissioner to revoke and refuse to renew Respondent’s license to act as a mortgage broker 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. Such violation also 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 to impose a civil penalty pursuant to Sections 36a-494(b) and 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 AND REFUSE TO RENEW
MORTGAGE BROKER LICENSE, NOTICE OF INTENT TO ISSUE ORDER
TO CEASE AND DESIST, NOTICE OF INTENT TO IMPOSE CIVIL
PENALTY AND NOTICE OF RIGHT TO HEARING
The Commissioner finds that public welfare requires immediate action to issue a temporary order requiring Respondent to cease and desist from violating Section 36a-492 of the 2010 Supplement to the General Statutes pursuant to Section 36a-52(b) of the Connecticut General Statutes, in that due to Respondent’s failure to maintain its surety bond, any borrower or prospective borrower who may be damaged by the failure of Respondent or any mortgage loan originator who may be covered by such bond to perform any written agreements or commitments, or wrongful conversion of funds paid by a borrower or prospective borrower to Respondent or any mortgage loan originator who may be covered by such bond, will not be able to proceed on such surety bond to recover damages.
V. NOTICE OF AUTOMATIC SUSPENSION, TEMPORARY ORDER TO
CEASE AND DESIST, NOTICE OF INTENT TO REVOKE AND REFUSE
TO RENEW MORTGAGE BROKER 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 and refuse to renew its license to act as a mortgage broker 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 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 to impose a civil penalty upon Respondent 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 and REFUSE TO RENEW Respondent’s license to act as a mortgage broker in Connecticut, issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-486(b) of the then applicable Connecticut General Statutes and Section 36a-53a 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 and Refuse to Renew Mortgage Broker 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(a) and 36a-50(a) of the Connecticut General Statutes. This Notice of Intent to Revoke and Refuse to Renew Mortgage Broker License, Notice of Intent to Issue Order to Cease, Notice of Intent to Impose Civil Penalty 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 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 16, 2012, 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 act as a mortgage broker in Connecticut; an order refusing to renew Respondent’s license to act as a mortgage broker in Connecticut, which shall cause such license to expire; and an order that Respondent cease and desist from violating Section 36a-486(b) of the then applicable Connecticut General Statutes and Section 36a-53a of the Connecticut General Statutes; and may order that a civil penalty not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Respondent.
So ordered at Hartford, Connecticut
this 9th of January 2012. ________/s/_________
Howard F. Pitkin
Banking Commissioner
CERTIFICATION
I hereby certify that on this 10th day of January 2012, the foregoing Notice of Intent to Revoke and Refuse to Renew Mortgage Broker 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 Mortgage Store of Connecticut, LLC, Attention: Anthony J. Ranciato, President, 3190 Whitney Avenue, Building 1, Hamden, Connecticut 06518, certified mail no. 70112000000247358024.
________/s/_________
Doniel Kitt
Prosecuting Attorney