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IN THE MATTER OF:
FAIRFIELD FINANCIAL
MORTGAGE GROUP, INC.
("FFMG")
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SETTLEMENT AGREEMENT |
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Part I of Chapter 668, Sections 36a-485 to 36a-534a, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Brokers and Originators”;
WHEREAS, the Commissioner, through the Consumer Credit Division of the Department of Banking (“Division”), conducted an investigation pursuant to Section 36a-17 of the Connecticut General Statutes into the activities of FFMG 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, FFMG is a corporation that is currently licensed as a first mortgage lender/broker under Part I(A) of Chapter 668 of the Connecticut General Statutes, “Nondepository First Mortgage Lenders, Brokers and Originators”, and as a secondary mortgage lender/broker under Part I(B) of Chapter 668 of the Connecticut General Statutes, “Secondary Mortgage Lenders, Brokers and Originators”;
WHEREAS, as a result of the investigation, the Commissioner alleges that FFMG brokered a first mortgage loan made by BNC Mortgage, Inc. (“BNC”) to Joseph Ventura (“Ventura”), who was employed with FFMG as an originator, and that in connection therewith, FFMG concealed, intentionally omitted or otherwise intentionally failed to disclose to BNC that FFMG was making a secondary mortgage loan to Ventura and that Ventura was an employee of FFMG, in violation of Section 36a-53b of the Connecticut General Statutes;
WHEREAS, as a result of the investigation, the Commissioner further alleges that the loan application for Ventura’s first mortgage loan that FFMG submitted to BNC contained several false statements, in violation of Section 36a-53b of the Connecticut General Statutes;
WHEREAS, the Commissioner believes that the Commissioner’s allegations support the initiation of enforcement proceedings against FFMG, including proceedings to revoke FFMG’s first mortgage lender/broker license pursuant to Sections 36a-494(a)(1), 36a-494(a)(1)(B) and 36a-494(a)(1)(C) of the Connecticut General Statutes and FFMG’s secondary mortgage lender/broker license pursuant to Section 36a-517(a)(1) of the Connecticut General Statutes, and impose a civil penalty of up to $100,000 per violation on FFMG pursuant to Section 36a-50(a) of the Connecticut General Statutes.
WHEREAS, Section 4-177(c) of the Connecticut General Statutes states, in pertinent part, that “[u]nless precluded by law, a contested case may be resolved by . . . agreed settlement”;
WHEREAS, Section 36a-1-55(a) of the Regulations of Connecticut State Agencies states, in pertinent part, that “[p]ursuant to subsection (c) of section 4-177 of the Connecticut General Statutes, unless precluded by law, any contested case may be resolved by . . . agreed settlement”;
WHEREAS, FFMG 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, FFMG, 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;
AND WHEREAS, upon the entry of this Settlement Agreement, this matter will be resolved and the Commissioner will not take any future enforcement action against FFMG based upon the allegations contained herein.
NOW THEREFORE, the Commissioner and FFMG enter into this Settlement Agreement as follows:
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No later than the date this Settlement Agreement is executed by FFMG, FFMG shall remit to the Department of Banking, by cashier’s or certified check made payable to “Treasurer, State of Connecticut”, the sum of Fifteen Thousand Dollars ($15,000) as a civil penalty; |
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FFMG shall establish and implement a loan policy setting forth procedures to ensure that the conduct alleged herein does not recur and, no later than the date this Settlement Agreement is executed by FFMG, FFMG shall submit such loan policy to the Deputy Commissioner. The loan policy shall, at a minimum provide that: (a) no loan originator may conduct any verifications in connection with any loan application or otherwise process any loan; (b) all such verifications shall be documented and signed and dated by the person conducting the verification; (c) no employee may process his or her own loan application; and (d) each loan approval shall be reviewed by two individuals to ascertain that all applicable lender requirements and underwriting conditions have been met; |
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FFMG shall retain, at its own expense, an independent, unaffiliated third-party auditor or compliance firm (“Auditor”) to be approved by the Deputy Commissioner to conduct two semi-annual reviews of FFMG’s compliance with the loan policy described in paragraph 2 of this Settlement Agreement. Each review by the Auditor shall be an audit of the loans brokered or made by FFMG in Connecticut during a six-month calendar period (“Audit Period”), the first such period to commence on July 1, 2007. The Auditor shall commence each audit no earlier than 61 or later than 70 days after the conclusion of an Audit Period. Following each audit, the Auditor shall provide a written report of its findings to the Division with a copy to FFMG. The Deputy Commissioner may require additional audits if the audits do not demonstrate such compliance to the satisfaction of the Commissioner. |
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Notwithstanding anything to the contrary in this Settlement Agreement, execution of this Settlement Agreement is without prejudice to the right of the Commissioner to take enforcement action against FFMG to enforce this Settlement Agreement if the Commissioner determines that FFMG is not fully complying with any term or condition stated herein or if any representations made by FFMG and reflected herein are subsequently discovered to be untrue. 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 5th day of June 2007.
________/s/_________
Howard F. Pitkin
Banking Commissioner
I, Charles L. Levesque, state on behalf of Fairfield Financial Mortgage Group, Inc., 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 Fairfield Financial Mortgage Group, Inc.; that Fairfield Financial Mortgage Group, Inc., agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Fairfield Financial Mortgage Group, Inc., voluntarily agrees to enter into this Settlement Agreement, expressly waiving any right to a hearing on the matters described herein.
By: ______________/s/__________________
Charles L. Levesque, President
Fairfield Financial Mortgage Group, Inc.
State of: Connecticut
County of: Fairfield
On this the 30th day of May 2007, before me, D. J. Guilbeault, the undersigned officer, personally appeared Charles L. Levesque who acknowledged himself to be the President of Fairfield Financial Mortgage Group, Inc., a corporation, and that he, as such President, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of Fairfield Financial Mortgage Group, Inc., as President.
In witness whereof I hereunto set my hand.
______________/s/__________________
Notary Public
Date Commission Expires: 7/31/11
Administrative Orders and Settlements
