February 21, 2008
FIRST CLASS AND REGISTERED MAIL
Mr. Frederick Cornelius
559 New Park Avenue
West Hartford, CT 06110
Re: Denial of Originator Registration
Dear Mr. Cornelius:
On January 10, 2008, First World Mortgage Corporation (“First World Mortgage”) filed a New Application for Registration of Loan Originators (“Application”) with the Consumer Credit Division (“Division”) of this department seeking to register you as a loan originator. First World Mortgage is currently licensed as a first mortgage lender/broker and secondary mortgage lender/broker under Part I of Chapter 668 of the Connecticut General Statutes, “Mortgage Lenders, Brokers and Originators”. Pursuant to Section 36a-489(b) of the 2008 Supplement to the General Statutes, I hereby deny the registration for the reasons set forth below.
Section 36a-489(b) of the 2008 Supplement to the General Statutes requires me to register an originator unless I find, among other things, that the originator has made a material misstatement in the application or that the character and integrity of such originator are not such as to warrant belief that registration would be in the public interest and consistent with the purposes of Sections 36a-485 to 36a-498a, inclusive, of the Connecticut General Statutes. If I deny the registration, I must notify the originator and the applicant of the denial and the reasons for such denial.
In response to Question 2 on the Loan Originator Addendum Form to the Application (“Addendum Form”), which asked “[h]ave you ever been the subject of actions (cease and desist orders, consent orders, injunctions, license suspensions or revocations, etc.) before any regulatory agency”, you responded “no”. In response to Question 3 on the Addendum Form, which asked “[h]ave you ever been refused any license (except motor vehicle operator) by the Department of Banking or any other governmental agency or had withdrawn such an application”, you responded “no”. In support of your responses, you gave the following explanation:
Throughout the entire Department proceedings and subsequent court actions regarding Focus Mortgage, a clear distinction was drawn between the assignation of responsibility to Focus Mortgage as “the licensee” and Frederick Cornelius the individual. Prior regulatory action was against Focus Mortgage “the licensee” under a theory of “nondelegable duties” or “respondeat superior” not Frederick Cornelius individually. The Department of Banking in its Findings of Fact and Conclusion of Law (p 11) specifically acknowledged that “the record did not establish” individual culpability on the part of Frederick Cornelius and the Appellate record notes that “there was no evidence that it was the plaintiff, Frederick Cornelius, who personally” performed any impropriety. Cornelius v. Dept. of Banking 94 Conn. App. 547 (2006).
Pursuant to the authority granted to me by Section 36a-17 of the Connecticut General Statutes, I have reviewed the Department’s records and they reveal that the Department’s prior regulatory actions were against Frederick Cornelius d/b/a Focus Mortgage. (See, Denial of First Mortgage Broker License, dated January 5, 2004, issued to Frederick Cornelius d/b/a Focus Mortgage, and Findings of Fact, Conclusions of Law and Order, dated June 18, 2004, issued In the Matter of: Frederick Cornelius d/b/a Focus Mortgage.)
While I agree that there was no evidence in the administrative record that you personally created or transmitted any of the forged appraisals, the Appellate Court in Frederick Cornelius v. Department of Banking, 94 Conn. App. 547, 551 (2006), affirmed the trial court’s findings that “[t]he commissioner properly determined that the plaintiff’s submission of false appraisals in support of mortgage loan applications fully supported the finding that the plaintiff could not operate his mortgage broker business soundly and effectively, in the public interest and consistent with the purposes of the first and secondary mortgage acts as outlined in the General Statues, chapter 668, part I(A) and (B).”
When your responses to Questions 2 and 3 in the Addendum Form are compared to the court’s findings, I find that you have made material misstatements in the Application. Indeed, you have been the subject of actions by this department revoking your first mortgage lender/broker license and refusing to renew your secondary mortgage broker license and you have also been denied a first mortgage broker license. In addition, as the Appellate Court held, the facts fully supported the finding that you, while doing business under the name Focus Mortgage, could not operate your mortgage broker business soundly and effectively, in the public interest and consistent with the purposes of the first and secondary mortgage act. Therefore, I am unable to find that your character and integrity are such as to warrant belief that granting you registration as an originator will be in the public interest and consistent with the purposes of Sections 36a-485 to 36a-498a, inclusive, of the Connecticut General Statutes.
Very truly yours,
Howard F. Pitkin
Registered Mail No. RB028034551US
cc: First World Mortgage Corporation