DOB: Signature Mortgage Group, LLC, Lisette S. Cherry, Notice of Intent to Revoke Loan Originator License, Issue Order to Cease and Desist, Impose Civil Penalty

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IN THE MATTER OF:

SIGNATURE MORTGAGE GROUP, LLC
("Signature")

LISETTE S. CHERRY
("Cherry")

    (collectively"Respondents")

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NOTICE OF INTENT TO REVOKE
MORTGAGE LOAN ORIGINATOR
LICENSE

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 Respondents to determine if they have violated, are violating or are 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-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.
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-52(a) of the 2008 Supplement to the General Statutes, provides, in pertinent part, that:
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.


II.  MATTERS ASSERTED
1.
Signature is a Connecticut limited liability company with its principal office at 235 West Main Street, New Britain, Connecticut.
2.
Cherry is an individual whose address last known to the Commissioner is 76 North Mountain Road, New Britain, Connecticut.
3.
From at least April 20, 2007 to the present, Cherry has been registered and licensed (No. 27055) with the Department as a loan originator in Connecticut with Apex Lending, Inc., a licensed mortgage correspondent lender in Connecticut.
4.
On or about November 13, 2007, Signature, through its manager/member, Cherry, filed applications for first and secondary mortgage broker licenses in Connecticut (“Applications”).
5. In the Applications, Signature, through Cherry, represented, inter alia, that Cherry had more than three years experience as a loan originator with Progressive Mortgage, LLC (“Progressive”), a licensed mortgage broker in Connecticut.
6.
On or about December 17, 2007, Cherry filed documents purportedly issued by Progressive with the Division to support Signature’s representation that Cherry had been employed by Progressive.
7. In fact, Cherry has never been employed by Progressive in any capacity and the documents provided to the Division did not come from Progressive.
8. On or about December 18, 2007, Signature, through Cherry, withdrew the Applications.
9. On or about April 30, 2008, pursuant to Section 4-182(c) of the Connecticut General Statutes, the Division gave Cherry written notice that she may have engaged in conduct which would provide a basis for the revocation of her license as a loan originator in Connecticut and gave Cherry the opportunity to show compliance with all lawful requirements for the retention of her license as a loan originator in Connecticut (“Compliance Letter”).
10. On or about May 14, 2008, Cherry requested an extension of time to respond to the Compliance Letter.  To date, no response has been received by the Commissioner.
11.
On and after July 1, 2008, pursuant to Section 39 of Public Act 08-176, Cherry’s originator registration is deemed to be a mortgage loan originator license.
 
 
III.  STATUTORY BASIS FOR REVOCATION OF
LOAN ORIGINATOR LICENSE, ORDER TO CEASE AND DESIST
AND IMPOSITION OF CIVIL PENALTY
 
Section 36a-53a of the Connecticut General Statutes provides, in pertinent part, that:
No person shall make or cause to be made . . . in any document filed with the commissioner or in any . . . investigation . . . under this title, any statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect. 
Section 36a-494(a)(2) 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 loan originator license . . . in accordance with the provisions of section 36a-51, . . . if the commissioner finds that the licensee has violated any of the provisions of this title . . . .
1.
Cherry’s statement that she had been employed by Progressive and that the supporting documents were provided by Progressive, as more fully described in paragraphs 5 and 6 of the Matters Asserted, when, in fact, neither was true, as more fully described in paragraph 7 of the Matters Asserted, constitutes a violation of Section 36a-53a of the Connecticut General Statutes.  Such violation constitutes grounds to revoke Cherry’s mortgage loan originator license in Connecticut pursuant to Section 36a-494(a)(2) of the 2008 Supplement to the General Statutes, as amended, and Section 36a-51 of the 2008 Supplement to the General Statutes, and forms the basis to issue an order to cease and desist against Cherry pursuant to Section 36a-52(a) of the 2008 Supplement to the General Statutes, and to impose a civil penalty against Cherry 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 Cherry in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Cherry not to exceed One Hundred Thousand Dollars ($100,000), subject to her right to a hearing on the allegations set forth above.
2.
Signature’s statement, made through Cherry, that Cherry had been employed by Progressive and that the supporting documents were provided by Progressive, as more fully described in paragraphs 5 and 6 of the Matters Asserted, when, in fact, neither was true, as more fully described in paragraph 7 of the Matters Asserted, constitutes a violation of Section 36a-53a of the Connecticut General Statutes.  Such violation forms the basis to issue an order to cease and desist against Signature pursuant to Section 36a-52(a) of the 2008 Supplement to the General Statutes, and to impose a civil penalty against Signature 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 Signature in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Signature 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 REVOKE MORTGAGE LOAN ORIGINATOR LICENSE,
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 Cherry has violated Section 36a-53a of the Connecticut General Statutes, which constitutes grounds to revoke Cherry’s mortgage loan originator license in Connecticut pursuant to Section 36a-494(a)(2) of the 2008 Supplement to the General Statutes, as amended, and Section 36a-51 of the 2008 Supplement to the General Statutes, and forms the basis to issue an order to cease and desist against Cherry pursuant to Section 36a-52(a) of the 2008 Supplement to the General Statutes, and to impose a civil penalty against Cherry pursuant to Section 36a-50(a) of the Connecticut General Statutes;
 
AND WHEREAS, the Commissioner has reason to believe that Signature has violated Section 36a-53a of the Connecticut General Statutes, which forms the basis to issue an order to cease and desist against Signature pursuant to Section 36a-52(a) of the 2008 Supplement to the General Statutes, and to impose a civil penalty against Signature pursuant to Section 36a-50(a) of the Connecticut General Statutes.
 
NOW THEREFORE, notice is hereby given to Cherry that the Commissioner intends to REVOKE her mortgage loan originator license in Connecticut, issue an order requiring Cherry to CEASE AND DESIST from violating Section 36a-53a of the Connecticut General Statutes, and to impose a CIVIL PENALTY upon Cherry as set forth herein, subject to Cherry’s right to a hearing on the allegations set forth above.
 
FURTHER, notice is hereby given to Signature that the Commissioner intends to issue an order requiring Signature to CEASE AND DESIST from violating Section 36a-53a of the Connecticut General Statutes, and to impose a CIVIL PENALTY upon Signature as set forth herein, subject to Signature’s right to a hearing on the allegations set forth above.
 
A hearing will be granted to each 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 each Respondent’s receipt of this Notice of Intent to Revoke Mortgage Loan Originator License, Notice of Intent Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in Sections 36a-51(a) and 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 Revoke Mortgage Loan Originator License, Notice of Intent 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 Respondents 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 October 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 Respondents fail to appear at the requested hearing.  At such hearing, Respondents 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 Respondents within the time prescribed, the Commissioner will issue an order revoking Cherry’s mortgage loan originator license in Connecticut and an order that Respondents cease and desist from violating Section 36a-53a of the Connecticut General Statutes, and may order that the maximum civil penalty of One Hundred Thousand Dollars ($100,000) be imposed upon each Respondent.
 
 
So ordered at Hartford, Connecticut
this 4th day of September 2008.        ________/s/_________
                                                    Howard F. Pitkin
                                                    Banking Commissioner
 
 
 
CERTIFICATION
 
I hereby certify that on this 4th day of September 2008, the foregoing Notice of Intent to Revoke Mortgage Loan Originator License, Notice of Intent 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 Signature Mortgage Group, LLC, at 235 West Main Street, New Britain, Connecticut 06052, registered mail no. RB028035089US; and to Lisette Cherry at 76 North Mountain Road, New Britain, Connecticut 06053, registered mail no. RB028035092US.
 
 
                                                   ________/s/_________
                                                   Jesse B. Silverman
                                                   Prosecuting Attorney
 

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