DOB: Cross Country Lenders LLC, Order of Summary Supension, Notice of Intent to Revoke Mortgage Correspondent Licenses and Right to Hearing

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IN THE MATTER OF:

CROSS COUNTRY LENDERS LLC

    ("Respondent")

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ORDER OF SUMMARY SUSPENSION

NOTICE OF INTENT TO REVOKE
MORTGAGE CORRESPONDENT
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” (“Act”).
 
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-494(a) of the 2008 Supplement to the General Statutes, as amended by Public Acts 07-91, 07-156 and 08-176, provides, in pertinent part, that:

The commissioner may . . . revoke . . . any . . . mortgage correspondent lender . . . license . . . in accordance with the provisions of section 36a-51 . . . . 

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.  If the commissioner finds that public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in the notice, the commissioner may order summary suspension of a license in accordance with subsection (c) of section 4-182 and require the licensee to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section, pending proceedings for suspension, revocation or refusal to renew.

(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 4-182(c) of the Connecticut General Statutes provides, in pertinent part, that:

If the agency finds that public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in its order, summary suspension of a license may be ordered pending proceedings for revocation or other action.  These proceedings shall be promptly instituted and determined.


II.  MATTERS ASSERTED
 
1. Respondent is a Connecticut limited liability company with its principal office at 4 Research Drive, Suite 104, Shelton, Connecticut.
2.

From March 16, 2005 through June 30, 2008, Respondent has held two licenses (Nos. 15336 and 11781) as a first mortgage correspondent lender and two licenses (Nos. 15337 and 11782) as a secondary mortgage correspondent lender under the Act, which licenses, pursuant to Section 39 of Public Act 08-176, are deemed to be mortgage correspondent lender licenses on and after July 1, 2008.

3. On February 6, 2008, the Division conducted an examination of Respondent and found, among other violations, that Respondent’s tangible net worth was below $18,355.26.
4.
On March 25, 2008, the Division sent Respondent a letter enclosing the Report of Examination and asking that appropriate corrective action be taken by Respondent and that a report of the actions taken be provided to the Division.
5. On May 29, 2008, the Division sent Respondent a second letter, asking for a response to the letter of March 25, 2008, described more fully in paragraph 4 above.
6. On June 18, 2008, the Division sent Respondent a letter pursuant to Section 4-182(c) of the Connecticut General Statutes, giving Respondent an opportunity to show compliance with all lawful requirements for retention of its first and secondary mortgage correspondent lender licenses.
7. On July 7, 2008, the Division sent a letter to the home address of Geoffrey Chadwick, Managing Member of Respondent, enclosing a copy of the June 18, 2008 letter, described more fully in paragraph 6 above.
8.
As of the date of this Order, Respondent has failed to show compliance with all lawful requirements for retention of its mortgage correspondent lender licenses.
 
 
III.  STATUTORY BASIS FOR REVOCATION OF
MORTGAGE CORRESPONDENT LENDER LICENSES

Section 36a-488 of the 2008 Supplement to the General Statutes provides, in pertinent part, that:
(a) (1)  The commissioner shall not issue a license as . . . a first mortgage correspondent lender . . . to any person unless such person meets the following tangible net worth . . . requirements, as applicable:  (A) . . . the minimum tangible net worth requirement for a first mortgage correspondent lender . . . shall be . . . twenty-five thousand dollars . . . .
(2)  Each licensee shall maintain the net worth required by this subsection and shall promptly notify the commissioner if such licensee’s net worth falls below the net worth required by this subsection.
Section 36a-494(a) of the 2008 Supplement to the General Statutes, as amended by Public Acts 07-91, 07-156 and 08-176, provides, in pertinent part, that:
The commissioner may . . . revoke . . . any . . . mortgage correspondent lender . . . license . . . for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498a, inclusive, . . . or if the commissioner finds that the licensee . . . has done any of the following:  . . . (C) violated any of the provisions of this title . . . or any other law or regulation applicable to the conduct of its business . . . .
Respondent’s failure to maintain a minimum tangible net worth of $25,000, as more fully described in paragraph 3 of the Matters Asserted, constitutes a violation of Section 36a-488 of the 2008 Supplement to the General Statutes, which constitutes sufficient grounds for the Commissioner to deny an application pursuant to Section 36a-488(a)(1) of the 2008 Supplement to the General Statutes, which constitutes grounds for the Commissioner to revoke Respondent’s licenses to engage in the business of a mortgage correspondent lender.
 

IV.  ORDER OF SUMMARY SUSPENSION, NOTICE OF INTENT TO REVOKE
MORTGAGE CORRESPONDENT LENDER LICENSES
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 its licenses to engage in the business of a mortgage correspondent lender in Connecticut pursuant to Section 36a-494(a)(1)(C) of the 2008 Supplement to the General Statutes, as amended;
 
AND WHEREAS, the Commissioner finds that public safety and welfare imperatively require emergency action to summarily suspend Respondent’s licenses to engage in the business of a mortgage correspondent lender in Connecticut, in that persons may be financially harmed by its failure to maintain the required minimum tangible net worth.
 
NOW THEREFORE, pursuant to the authority granted in Section 4-182(c) of the Connecticut General Statutes and Section 36a-51 of the 2008 Supplement to the General Statutes, as amended, the Commissioner ORDERS that the licenses of Cross Country Lenders LLC to engage in the business of a mortgage correspondent lender in Connecticut be and are hereby SUMMARILY SUSPENDED pending proceedings for revocation.
 
FURTHER, notice is hereby given to Respondent that the Commissioner intends to REVOKE Respondent’s licenses to engage in the business of a mortgage correspondent lender in Connecticut, 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 from Respondent by the Department of Banking, Legal Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following its receipt of this Order of Summary Suspension, Notice of Intent to Revoke Mortgage Correspondent Lender Licenses and Notice of Right to Hearing, as set forth in Section 36a-51 of the Connecticut General Statutes.  This Order of Summary Suspension, Notice of Intent to Revoke Mortgage Correspondent Lender 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 a 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 presiding 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 September 9, 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 engage in the business of a mortgage correspondent lender in Connecticut.

Dated at Hartford, Connecticut
this 14th day of July 2008.                ________/s/_________
                                                    Howard F. Pitkin
                                                    Banking Commissioner




CERTIFICATION

I hereby certify that on this 14th day of July 2008, the foregoing Order of Summary Suspension, Notice of Intent to Revoke Mortgage Correspondent Lender Licenses and Notice of Right to Hearing was sent by registered mail, return receipt requested, to Cross Country Lenders LLC, 4 Research Drive, Suite 4, Shelton, Connecticut 06484, registered mail no. RB028034463US, and via facsimile to (203) 881-3797; and to Geoffrey Chadwick, Managing Member, Cross Country Lenders LLC, 30 Jenny Lane, Oxford, Connecticut 06478, registered mail no. RB028034450US.

________/s/_________
Nirja Savill
Prosecuting Attorney


 


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