DOB: Cross Country Lenders LLC, Withdrawal of Order of Summary Suspension, Notice of Intent to Revoke Mortgage Correspondent Licenses, Issue Order to Cease and Desist and Right to Hearing

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CROSS COUNTRY LENDERS LLC

    ("Respondent")

 

 
 
 



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WITHDRAWAL OF ORDER
OF SUMMARY SUSPENSION

WITHDRAWAL OF NOTICE OF
INTENT TO REVOKE MORTGAGE
CORRESPONDENT LICENSES

NOTICE OF INTENT TO ISSUE
ORDER TO CEASE AND DESIST

NOTICE OF INTENT TO IMPOSE
CIVIL PENALTY

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(b) 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:

Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any of the provisions of sections 36a-485 to 36a-498a, inclusive . . . the commissioner may take action against such person or licensee in accordance with sections 36a-50 and 36a-52.

Section 36a-52 of the 2008 Supplement to the General Statutes, provides, in pertinent part, that:

(a)  Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of the general statutes within the jurisdiction of the commissioner . . . the commissioner may send a notice to such person 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 person 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 . . . alleged to have been violated; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.  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 person fails to appear at the hearing.  After the hearing, the commissioner shall determine whether an order to cease and desist should be issued against the person named in the notice.  If the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person.  No such order shall be issued except in accordance with the provisions of chapter 54.

Section 36a-50 of the Connecticut General Statutes provides, in pertinent part, that:

(a) (1)  Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may send a notice to such person 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 person on the earlier of the date of actual receipt or seven days after mailing or sending.  Any such notice shall include:  (A) A statement of the time, place, and nature of the hearing; (B) a statement of the legal authority and jurisdiction under which the hearing is to be held; (C) a reference to the particular sections of the general statutes . . . alleged to have been violated; (D) a short and plain statement of the matters asserted; (E) the maximum penalty that may be imposed for such violation; and (F) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.

(2)  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 such person fails to appear at the hearing.  After the hearing, if the commissioner finds that the person has violated any such provision, . . . the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by law, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.  If such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.

(3)  Each action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54.


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 things, that Respondent’s tangible net worth was $18,355.26, and that Respondent had employed or retained at least 25 originators without registering them.
4.
On March 25, 2008, the Division sent Respondent a letter enclosing the Report of Examination and a bill for the 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 May 30, 2008, the Division sent Respondent a letter stating that that the cost of the examination had not been paid, and asking Respondent to make prompt remittance of the monies owed.
7. As of the date of this Notice, Respondent has failed to respond to the Report of Examination or pay the cost of the examination.
8.
As a result of the investigation conducted by the Division, on July 14, 2008, the Commissioner issued an Order of Summary Suspension, Notice of Intent to Revoke Mortgage Correspondent Licenses and Notice of Right to Hearing (“Order”).
9.
On July 8, 2008, Respondent surrendered its mortgage correspondent lender licenses.
 
 
III.  WITHDRAWAL OF ORDER OF SUMMARY SUSPENSION

As a result of the surrender, the Order is hereby withdrawn.
 
Section 36a-1-55(b) of the Regulations of Connecticut State Agencies provides, in pertinent part, that:
The commissioner may withdraw an order at any time before a final decision is issued.
 
IV.  STATUTORY BASIS FOR ORDER TO CEASE AND DESIST
AND IMPOSITION OF CIVIL PENALTY
 
Section 36a-488 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:
(a) (1)  The commissioner shall not issue . . . a mortgage correspondent lender license . . . to any person unless such person meets the following tangible net worth . . . requirements, as applicable:  (A) . . . the minimum tangible net worth requirement for a mortgage correspondent lender . . . shall be (i) prior to March 2, 2009, 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-486(b) of the 2008 Supplement to the General Statutes provides in pertinent part, that:
No licensee shall employ or retain an originator without first registering such originator under sections 36a-485 to 36a-498a, inclusive, provided such registration shall not be required for any originator who is registered by such licensee under sections 36a-510 to 36a-524, inclusive.
Section 36a-65(c)(6) of the Connecticut General Statutes, as amended by Public Act 08-176, provides, in pertinent part, that:
A licensee under section 36a-489 . . . shall pay to the commissioner the actual cost of any examination of the licensee, as such cost is determined by the commissioner.
Section 36a-17(d) of the Connecticut General Statutes provides, in pertinent part, that:
Any person who is the subject of any . . . examination . . . shall . . . cooperate with the commissioner.

1. 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, as amended.  Such violation forms the basis to issue an order to cease and desist against Respondent pursuant to Section 36a-52(a) of the 2008 Supplement to the General Statutes, and to impose a civil penalty against Respondent pursuant to Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed One Hundred Thousand Dollars ($100,000), subject to its right to a hearing on the allegations set forth above.
2.

Respondent’s employment or retention of at least 25 originators absent registration, as more fully described in paragraph 3 of the Matters Asserted, constitutes a violation of Section 36a-486(b) of the 2008 Supplement to the General Statutes.  Such violation forms the basis to issue an order to cease and desist against Respondent pursuant to Section 36a-52(a) of the 2008 Supplement to the General Statutes, and to impose a civil penalty against Respondent pursuant to Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed Twenty-five Thousand Dollars ($25,000), subject to its right to a hearing on the allegations set forth above.

3. Respondent’s failure to pay the cost of an examination, as more fully described in paragraphs 4, 6 and 7 of the Matters Asserted, constitutes a violation of Section 36a-65(c)(6) of the Connecticut General Statutes, as amended.  Such violation forms the basis to issue an order to cease and desist against Respondent pursuant to Section 36a-52(a) of the 2008 Supplement to the General Statutes, and to impose a civil penalty against Respondent pursuant to Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed One Hundred Thousand Dollars ($100,000), subject to its right to a hearing on the allegations set forth above.
4.
Respondent’s failure to respond to the Report of Examination, as more fully described in paragraphs 4, 5 and 7 of the Matters Asserted, constitutes a violation of Section 36a-17(d) of the Connecticut General Statutes.  Such violation forms the basis to issue an order to cease and desist against Respondent pursuant to Section 36a-52(a) of the 2008 Supplement to the General Statutes, and to impose a civil penalty against Respondent pursuant to Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed One Hundred Thousand Dollars ($100,000), subject to its right to a hearing on the allegations set forth above.
 

V.  NOTICE OF INTENT TO ISSUE ORDER TO CEASE AND DESIST,
NOTICE OF INTENT TO IMPOSE CIVIL PENALTY
AND NOTICE OF RIGHT TO HEARING

WHEREAS, the Commissioner has reason to believe that Respondent has violated Sections 36a-488 of the 2008 Supplement to the General Statutes, as amended, 36a-486(b) of the 2008 Supplement to the General Statutes, 36a-65(c)(6) of the Connecticut General Statutes, as amended, and Section 36a-17(d) of the Connecticut General Statutes, which forms the basis to issue an order to cease and desist against Respondent pursuant to Section 36a-52(a) of the 2008 Supplement to the General Statutes, and to impose a civil penalty against Respondent pursuant to Section 36a-50(a) of the Connecticut General Statutes.
 
NOW THEREFORE, notice is hereby given to Respondent that the Commissioner intends to issue an order requiring Respondent to CEASE AND DESIST from violating Sections 36a-488 of the 2008 Supplement to the General Statutes, as amended, 36a-486(b) of the 2008 Supplement to the General Statutes, 36a-65(c)(6) of the Connecticut General Statutes, as amended, and Section 36a-17(d) of the Connecticut General Statutes, and to impose a CIVIL PENALTY upon Respondent as set forth herein, 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 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 Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in Section 36a-52(a) of the 2008 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes.  This Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty 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 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 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 a hearing is not requested by Respondent within the time prescribed, the Commissioner will issue an order that Respondent cease and desist from violating Sections 36a-488 of the 2008 Supplement to the General Statutes, as amended, 36a-486(b) of the 2008 Supplement to the General Statutes, 36a-65(c)(6) of the Connecticut General Statutes, as amended, and Section 36a-17(d) of the Connecticut General Statutes, and may order that the maximum civil penalty of Three Hundred Twenty-five Thousand Dollars ($325,000) be imposed upon Respondent.

Issued at Hartford, Connecticut
this 5th day of August 2008.              ________/s/_________
                                                    Howard F. Pitkin
                                                    Banking Commissioner




CERTIFICATION

I hereby certify that on this 5th day of August 2008, the foregoing Withdrawal of Order of Summary Suspension, Withdrawal of Notice of Intent to Revoke Mortgage Correspondent Licenses, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing was sent by registered mail, return receipt requested, to Cross Country Lenders LLC, 4 Research Drive, Suite 104, Shelton, Connecticut 06484, registered mail no. RB028034914US; and to Geoffrey Chadwick, Managing Member, Cross Country Lenders LLC, 30 Jenny Lane, Oxford, Connecticut 06478, registered mail no. RB028034928US.

________/s/_________
Nirja Savill
Prosecuting Attorney


 


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