DOB: Freedom Mortgage Corporation d/b/a Jefferson Home Mortgage and Loan, LLC, Settlement Agreement

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IN THE MATTER OF:

FREEDOM MORTGAGE CORPORATION
d/b/a JEFFERSON HOME
MORTGAGE AND LOAN, LLC

    ("Freedom Mortgage")

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SETTLEMENT AGREEMENT        

WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, “Mortgage Lenders, Brokers and Originators”;
 
WHEREAS, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an examination pursuant to Section 36a-17 of the Connecticut General Statutes into the activities of Freedom Mortgage to determine if it had violated, was violating or was about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner;
 
WHEREAS, Freedom Mortgage is a New Jersey corporation that is currently licensed as a mortgage correspondent lender under Part I of Chapter 668, Sections 36a-485 et seq. of the Connecticut General Statutes;
 
WHEREAS, as a result of such examination, the Commissioner alleges that Freedom Mortgage employed or retained, during the period of January 2006 through July 2008, forty-three (43) individuals as loan originators without registering them, in violation of Section 36a-486(b) of the Connecticut General Statutes;
 
WHEREAS, the Commissioner believes that such allegations would support initiation of enforcement proceedings against Freedom Mortgage, including proceedings to revoke and/or refuse to renew Freedom Mortgage’s license pursuant to Section 36a-494(a) of the Connecticut General Statutes, issue a cease and desist order against Freedom Mortgage pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty of up to one hundred thousand dollars ($100,000) per violation on Freedom Mortgage pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes;
 
WHEREAS, Section 4-177(c) of the Connecticut General Statutes and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by agreed settlement, unless precluded by law;
 
WHEREAS, both the Commissioner and Freedom Mortgage acknowledge the possible consequences of formal administrative proceedings;
 
WHEREAS, Freedom Mortgage agrees to voluntarily enter into this Settlement Agreement without admitting or denying any allegations set forth herein, and solely for the purposes of obviating the need for formal administrative proceedings concerning the allegations described above;
 
WHEREAS, Freedom Mortgage herein represents to the Commissioner that two (2) of the individuals alleged to be unregistered loan originators in violation of Section 36a-486(b) of the Connecticut General Statutes during the period of January 2006 through July 2008, are currently licensed as loan originators under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
 
WHEREAS, Freedom Mortgage herein represents to the Commissioner that forty-one (41) of the individuals alleged to be unregistered loan originators in violation of Section 36a-486(b) of the Connecticut General Statutes during the period of January 2006 through July 2008, are no longer engaged in any mortgage-related activity with Freedom Mortgage that would require Freedom Mortgage to obtain licensure for such individuals from the Commissioner under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, including but not limited to, licensure as originators under Section 36a-486(b) of the Connecticut General Statutes;
 
WHEREAS, Freedom Mortgage herein represents to the Commissioner that it has reviewed and updated its internal policies, procedures and controls for assessing whether an individual engaged in mortgage-related activity with Freedom Mortgage requires licensure from the Commissioner under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, including but not limited to, licensure as originators under Section 36a-486(b) of the Connecticut General Statutes;
 
WHEREAS, in connection with this settlement, Freedom Mortgage was provided the option to pay a civil penalty in the amount of Forty-Three Thousand Dollars ($43,000) in settlement of the allegations contained herein;
 
WHEREAS, the State of Connecticut is a participant in the Nationwide Mortgage Licensing System and Registry (“NMLS&R”), jointly developed by the Conference of State Bank Supervisors (“CSBS”) and the American Association of Residential Mortgage Regulators to establish a unified and modern system of mortgage licensing and registration, and is committed to the success of NMLS&R;
 
WHEREAS, in connection with this settlement, Freedom Mortgage was provided an alternative option to make a voluntary contribution in the amount of Forty-Three Thousand Dollars ($43,000) to the State Regulatory Registry LLC (“SRR”), a wholly-owned subsidiary of CSBS, to support the NMLS&R;
 
WHEREAS, Freedom Mortgage elected to make a voluntary contribution to SRR in lieu of a civil penalty;
 
AND WHEREAS, Freedom Mortgage, through its execution of this Settlement Agreement, voluntarily agrees to waive any rights to a hearing upon the allegations contained in this Settlement Agreement, and waives the right to seek judicial review or otherwise challenge or contest the validity of this Settlement Agreement;
 
NOW THEREFORE, the Commissioner and Freedom Mortgage enter into this Settlement Agreement as follows:

1. No later than the date this Settlement Agreement is executed by Freedom Mortgage, Freedom Mortgage shall make a voluntary contribution by cashier’s check, certified check or money order in the amount of Forty-Three Thousand Dollars ($43,000) to SRR to support NMLS&R;
2. Upon entry of this Settlement Agreement, this matter will be resolved and the Commissioner will not take any future enforcement action against Freedom Mortgage based upon the allegations contained herein; provided that entry of this Settlement Agreement is without prejudice to the right of the Commissioner to take enforcement action against Freedom Mortgage based on the allegations contained herein if any representations made by Freedom Mortgage in this Settlement Agreement are subsequently discovered to be untrue or if Freedom Mortgage is not fully complying with any term or condition stated herein;
3. Nothing in the entry of this Settlement Agreement shall adversely affect the ability of Freedom Mortgage to apply for or obtain licenses or renewal licenses under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, and to apply for or obtain licensure of its originators from the Commissioner;
4. Notwithstanding in paragraph 2 herein, execution of this Settlement Agreement is without prejudice to the right of the Commissioner to take enforcement action against Freedom Mortgage to enforce this Settlement Agreement if the Commissioner determines that Freedom Mortgage is not fully complying with any term or condition stated herein.  For purposes of this paragraph, a violation of this Settlement Agreement shall be deemed to be a violation of an order of the Commissioner.

IN WITNESS WHEREOF, the parties hereto have caused this Settlement Agreement to be executed by each of them or their duly authorized representatives on the dates hereinafter subscribed.


Dated at Hartford, Connecticut
this 27th day of March 2009.              ________/s/_________
                                                     Howard F. Pitkin
                                                     Banking Commissioner



I, Stanley C. Middleman, state on behalf of Freedom Mortgage Corporation d/b/a Jefferson Home Mortgage and Loan, LLC that I have read the foregoing Settlement Agreement; that I know and fully understand its contents; that I am authorized to execute this Settlement Agreement on behalf of Freedom Mortgage Corporation d/b/a Jefferson Home Mortgage and Loan, LLC; that Freedom Mortgage Corporation d/b/a Jefferson Home Mortgage and Loan, LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Freedom Mortgage Corporation d/b/a Jefferson Home Mortgage and Loan, LLC voluntarily agrees to enter into this Settlement Agreement, expressly waiving any right to a hearing on the matters described herein.                                     

                                           

                                             By:  ________/s/_________
                                                   Name:  Stanley C. Middleman
                                                   Title:  President
                                                   Freedom Mortgage Corporation d/b/a
                                                   Jefferson Home Mortgage and Loan, LLC


State of:  New Jersey

County of:  Burlington

On this the 20th day of March 2009, before me, Coleen Eckert, the undersigned officer, personally appeared Stanley C. Middleman who acknowledged himself/herself to be the President of Freedom Mortgage Corporation d/b/a Jefferson Home Mortgage and Loan, LLC, a corporation, and that he/she, as such President, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself/herself as President.

In witness whereof I hereunto set my hand.


                                         ________/s/_________
                                         Notary Public   
                                         Date Commission Expires:  April 6, 2009


Administrative Orders and Settlements