| * * * * * * * * * * * * * * * * * *
IN THE MATTER OF: PROSPECT MORTGAGE ("Prospect Mortgage") |
*
* * * * * * * * * |
SETTLEMENT AGREEMENT |
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”, and Sections 9 and 19 to 21, inclusive, of Public Act 09-209;
WHEREAS, in July 2008, Metrocities Mortgage, LLC (“Metrocities Mortgage”) was licensed by the Commissioner as a mortgage lender under Part I of Chapter 668, Sections 36a-485 et seq. of the Connecticut General Statutes;
WHEREAS, on April 1, 2009, Metrocities Mortgage changed its legal name to Prospect Mortgage;
WHEREAS, Prospect Mortgage is a Delaware limited liability company currently licensed by the Commissioner as a mortgage lender under Part I of Chapter 668, Sections 36a-485 et seq. of the Connecticut General Statutes;
WHEREAS, on July 24, 2008, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an examination pursuant to Section 36a-17 of the Connecticut General Statutes into the activities of Metrocities Mortgage 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 Metrocities Mortgage employed or retained, during the period of November 9, 2005 through May 9, 2008, at least twenty-three (23) individuals as originators without registering them in violation of Sections 36a-486(b) and 36a-511(b) of the then applicable Connecticut General Statutes;
WHEREAS, as a result of such examination, the Commissioner additionally alleges that Metrocities Mortgage engaged in the business of making mortgage loans at 2101 Rexford Road, Suite 350W, Charlotte, North Carolina (“Charlotte Location”) during April and May 2006, without having first obtained a mortgage lender license for such location in violation of Section 36a-490(a) of the then applicable Connecticut General Statutes;
WHEREAS, the Commissioner believes that the unregistered originator and unlicensed location allegations would support initiation of enforcement proceedings against Prospect Mortgage, including proceedings to revoke Prospect Mortgage’s license pursuant to Section 36a-494(a) of the Connecticut General Statutes, as amended by Public Act 09-209, and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, issue a cease and desist order against Prospect Mortgage pursuant to Section 36a-494(b) of the Connecticut General Statutes, as amended by Public Act 09-209, and Section 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 Prospect Mortgage pursuant to Section 36a-494(b) of the Connecticut General Statutes, as amended, and Section 36a-50(a) 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 agreed settlement, unless precluded by law;
WHEREAS, both the Commissioner and Prospect Mortgage acknowledge the possible consequences of formal administrative proceedings;
WHEREAS, Prospect Mortgage agrees to voluntarily enter into this Settlement Agreement without admitting or denying any allegations set forth herein, and solely for the purposes of obviating the need for formal administrative proceedings concerning the allegations described above;
WHEREAS, Prospect Mortgage 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 Prospect Mortgage requires licensure from the Commissioner under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, including but not limited to, licensure as a mortgage loan originator under Section 36a-486(b) of the Connecticut General Statutes, as amended by Public Act 09-208;
WHEREAS, Prospect Mortgage herein represents to the Commissioner that the twenty-three (23) individuals alleged to be unregistered originators in violation of Sections 36a-486(b) and 36a-511(b) of the then applicable Connecticut General Statutes, are either currently licensed as mortgage loan originators with Prospect Mortgage or are no longer engaged in any mortgage-related activity with Prospect Mortgage that would require such individuals to be licensed;
WHEREAS, Prospect Mortgage herein represents that it ceased engaging in any mortgage lending activity at the Charlotte Location, and that Prospect Mortgage has reviewed and updated its internal policies, procedures and controls to ensure that any and all locations where mortgage lending activity will be conducted by Prospect Mortgage will be duly licensed with the Commissioner prior to engaging in such activity;
AND WHEREAS, Prospect Mortgage, through its execution of this Settlement Agreement, voluntarily agrees to waive any rights to a hearing upon the allegations contained in this Settlement Agreement, and waives the right to seek judicial review or otherwise challenge or contest the validity of this Settlement Agreement.
NOW THEREFORE, the Commissioner and Prospect Mortgage enter into this Settlement Agreement as follows:
| 1. | No later than the date this Settlement Agreement is executed by Prospect Mortgage, Prospect Mortgage 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 Thirty-three Thousand Dollars ($33,000) as a civil penalty; |
| 2. |
Upon entry of this Settlement Agreement, this matter will be resolved and the Commissioner will not take any future enforcement action against Prospect Mortgage based upon the allegations contained herein; provided that entry of this Settlement Agreement is without prejudice to the right of the Commissioner to take enforcement action against Prospect Mortgage based on the allegations contained herein if any representations made by Prospect Mortgage in this Settlement Agreement are subsequently discovered to be untrue or if Prospect Mortgage is not fully complying with any term or condition stated herein; |
| 3. | Nothing in the entry of this Settlement Agreement shall adversely affect the ability of Prospect Mortgage 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 to apply for or obtain licensure of its mortgage loan originators from the Commissioner; and |
| 4. | Notwithstanding paragraph 2 herein, execution of this Settlement Agreement is without prejudice to the right of the Commissioner to take enforcement action against Prospect Mortgage to enforce this Settlement Agreement if the Commissioner determines that Prospect Mortgage is not fully complying with any term or condition stated herein. For purposes of this paragraph, a violation of this Settlement Agreement shall be deemed to be a violation of an order of the Commissioner. |
IN WITNESS WHEREOF, the parties hereto have caused this Settlement Agreement to be executed by each of them or their duly authorized representatives on the dates hereinafter subscribed.
Dated at Hartford, Connecticut
this 7th day of April 2010.
________/s/_________
Howard F. Pitkin
Banking Commissioner
I, Donald D. Bundy, state on behalf of Prospect Mortgage, LLC, that I have read the foregoing Settlement Agreement; that I know and fully understand its contents; that I am authorized to execute this Settlement Agreement on behalf of Prospect Mortgage, LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Prospect Mortgage, LLC voluntarily agrees to enter into this Settlement Agreement, expressly waiving any right to a hearing on the matters described herein.
By: ________/s/_________
Name: Donald D. Bundy
Title: General Counsel
Prospect Mortgage, LLC
State of: California
County of: Los Angeles
On this the 29th day of March 2010, before me, Nelly D. Tirado, the undersigned officer, personally appeared Donald D. Bundy who acknowledged himself to be the General Counsel of Prospect Mortgage, LLC, a member managed/manager managed limited liability company, that he as such General Counsel being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company by himself as General Counsel.
In witness whereof I hereunto set my hand.
________/s/_________
Notary Public
Date Commission Expires: Sept. 30, 2011