DOB: Classic Financial Service, LLC, Notice of Automatic Suspension, Intent to Revoke First and Secondary Mortgage Broker Licenses

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IN THE MATTER OF:

CLASSIC FINANCIAL SERVICE, LLC

    ("Respondent")

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NOTICE OF AUTOMATIC SUSPENSION

NOTICE OF INTENT TO REVOKE
FIRST AND SECONDARY MORTGAGE
BROKER LICENSES

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-534a, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Brokers and Originators”.
 
Pursuant to the authority granted by Section 36a-17 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:
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-51 of the 2008 Supplement to the General Statutes provides, in pertinent part, that:
(a) The commissioner may . . . revoke . . . 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 . . . 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 . . . .  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 . . . the license.  No such license shall be . . . revoked except in accordance with the provisions of chapter 54.
Section 36a-492 of the 2008 Supplement to the General Statutes provides, in pertinent part, that:
(a) No such [first mortgage broker] license, and no renewal thereof, shall be granted unless the applicant has filed a bond with the commissioner written by a surety authorized to write such bonds in this state, in the sum of forty thousand dollars . . . .  The bond shall run concurrently with the period of the license granted to the applicant, and the aggregate liability under the bond shall not exceed the penal sum of the bond.
(b)  The surety company shall have the right to cancel the bond at any time by a written notice to the licensee stating the date cancellation shall take effect.  Such notice shall be sent by certified mail to the licensee at least thirty days prior to the date of cancellation.  A surety bond shall not be cancelled unless the surety company notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation.  The commissioner shall automatically suspend the license on the date the cancellation takes effect, unless the surety bond has been replaced or renewed.  The commissioner shall give the licensee notice of the automatic suspension pending proceedings for revocation . . . and an opportunity for a hearing on such actions in accordance with section 36a-51.


II.  MATTERS ASSERTED
1.
Respondent is a New York limited liability company with an office at 3217 Philip Avenue, Bronx, New York (“Bronx Office”).
2.
Since March 8, 2007, Respondent has been licensed to act as a first mortgage broker in Connecticut from the Bronx Office pursuant to Section 36a-489 of the Connecticut General Statutes.  Such license expires on September 30, 2008.
3.
Since March 8, 2007, Respondent has been licensed to act as a secondary mortgage broker in Connecticut from the Bronx Office pursuant to Section 36a-513 of the Connecticut General Statutes.  Such license expires on September 30, 2008.
4.
On January 28, 2008, the Commissioner received notice from Accredited Surety and Casualty Company, Inc., that bond number 10053558 issued on behalf of Respondent with respect to its first mortgage broker license for the Bronx Office would be cancelled, effective on February 27, 2008.
5. On January 29, 2008, 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 first and secondary mortgage broker licenses in Connecticut.
6.
To date, Respondent has failed to file a new bond or a replacement bond with the Commissioner.
7.
The Commissioner automatically suspended Respondent’s first mortgage broker license in Connecticut for the Bronx Office effective on February 27, 2008.
 
 
III.  STATUTORY BASIS FOR REVOCATION OF
FIRST AND SECONDARY MORTGAGE BROKER LICENSES
 
Section 36a-494(a)(1) of the 2008 Supplement to the General Statutes provides, in pertinent part, that:
The commissioner may . . . revoke . . . any [first mortgage broker] license . . . , in accordance with the provisions of section 36a-51, . . . if the commissioner finds that the licensee or any proprietor, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has . . . (C) violated any of the provisions of this title . . . .
Section 36a-517(a)(1) of the 2008 Supplement to the General Statutes provides, in pertinent part, that:
The commissioner may . . . revoke . . . any [secondary mortgage broker] license . . . , in accordance with the provisions of section 36a-51, . . . if the commissioner finds that the licensee or any proprietor, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has . . . (C) violated any of the provisions of this title . . . .
Respondent’s failure to maintain a bond that runs concurrently with the period of its first mortgage broker license, as more fully described in paragraphs 4 through 6, inclusive, of the Matters Asserted, is a violation of Section 36a-492(a) of the 2008 Supplement to the General Statutes, which requires that the Commissioner automatically suspend Respondent’s license to act as a first mortgage broker in Connecticut from the Bronx Office pursuant to Section 36a-492(b) of the 2008 Supplement to the General Statutes, and constitutes grounds for the Commissioner to revoke Respondent’s licenses to act as a first and secondary mortgage broker in Connecticut from the Bronx Office pursuant to Sections 36a-494(a)(1)(C) and 36a-517(a)(1)(C) of the 2008 Supplement to the General Statutes, respectively.
 
 
IV.  NOTICE OF AUTOMATIC SUSPENSION, NOTICE OF INTENT TO REVOKE
FIRST AND SECONDARY MORTGAGE BROKER LICENSES AND
NOTICE OF RIGHT TO HEARING
 
WHEREAS, the Commissioner has reason to believe that Respondent has engaged in acts or conduct which, pursuant to Section 36a-492(b) of the 2008 Supplement to the General Statutes, requires that the Commissioner automatically suspend Respondent’s license to act as a first mortgage broker in Connecticut from the Bronx Office, and constitutes sufficient grounds for the Commissioner to revoke its first mortgage broker license for the Bronx Office pursuant to Section 36a-494(a)(1)(C) of the 2008 Supplement to the General Statutes;
 
AND WHEREAS, the Commissioner has reason to believe that Respondent has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke its secondary mortgage broker license for the Bronx Office pursuant to Section 36a-517(a)(1)(C) of the 2008 Supplement to the General Statutes.
 
NOW THEREFORE, pursuant to the authority granted in Section 36a-492(b) of the 2008 Supplement to the General Statutes, the Commissioner gives NOTICE that on February 27, 2008, the license of Classic Financial Service, LLC to act as a first mortgage broker in Connecticut from 3217 Philip Avenue, Bronx, New York, was AUTOMATICALLY SUSPENDED pending proceedings for revocation.
 
FURTHER, notice is hereby given to Respondent that the Commissioner intends to REVOKE Respondent’s licenses to act as a first and secondary mortgage broker in Connecticut from the Bronx Office, subject to its 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, Legal Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following its receipt of this Notice of Automatic Suspension, Notice of Intent to Revoke First and Secondary Mortgage Broker Licenses and Notice of Right to Hearing as set forth in Section 36a-51 of the 2008 Supplement to the General Statutes.  This Notice of Automatic Suspension, Notice of Intent to Revoke First and Secondary Mortgage Broker Licenses 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 April 28, 2008, at 9 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 licenses to act as a first and secondary mortgage broker in Connecticut from 3217 Philip Avenue, Bronx, New York.
 
 
So ordered at Hartford, Connecticut
this 17th day of March 2008.             ________/s/_________
                                                    Howard F. Pitkin
                                                    Banking Commissioner
 
 
 
CERTIFICATION
 
I hereby certify that on this 18th day of March 2008, the foregoing Notice of Automatic Suspension, Notice of Intent to Revoke First and Secondary Mortgage Broker Licenses and Notice of Right to Hearing was sent by registered mail, return receipt requested, to Classic Financial Service, LLC, 3217 Philip Avenue, Bronx, New York 10465, registered mail no. RB027867474US.
 
 
                                                   ________/s/_________
                                                   Doniel Kitt
                                                   Prosecuting Attorney
 

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