DOB: VIP Mortgage Corporation, Settlement Agreement

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IN THE MATTER OF:

VIP MORTGAGE CORPORATION

    ("VIP 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 to 36a-534c of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators”;
 
WHEREAS, VIP Mortgage is a Massachusetts corporation that had offices at 417 Montgomery Street, Chicopee, Massachusetts (“Chicopee Office”) and at 153 Andover Street, Ste. 207, Danvers, Massachusetts (“Danvers Office”);
 
WHEREAS, VIP Mortgage’s Danvers Office was licensed by the Commissioner as a first and secondary mortgage correspondent lender/broker under Sections 36a-489 and 36a-513 of the Connecticut General Statutes during the period from October 1, 2006 until VIP Mortgage surrendered its Danvers Office licenses to the Commissioner on September 3, 2008;
 
WHEREAS, VIP Mortgage’s Chicopee Office was licensed by the Commissioner as a first and secondary mortgage correspondent lender/broker under Sections 36a-489 and 36a-513 of the Connecticut General Statutes during the period from October 1, 2006 until July 1, 2008, at which time, the Chicopee Office licenses were deemed pursuant to Section 39 of Public Act 08-176 to be a mortgage correspondent lender license and the expiration date for such license was extended pursuant to Section 45 of Public Act 08-176 from September 30, 2008 to the close of business on December 31, 2008;
 
WHEREAS, in May 2008, the Commissioner, through the Consumer Credit Division of the Department of Banking (“Division”), conducted an examination pursuant to Section 36a-17 of the Connecticut General Statutes into the activities of VIP 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, as a result of the Division’s examination of VIP Mortgage, the Commissioner alleges that VIP Mortgage employed or retained, during the period of December 2006 through February 2007, two (2) individuals as loan originators without registering them in violation of Sections 36a-486(b) and 36a-511(b) of the then applicable Connecticut General Statutes; 
 
WHEREAS, the Commissioner, through the Division, also conducted an investigation pursuant to Section 36a-17 of the Connecticut General Statutes into the activities of VIP 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, as a result of the Division’s investigation of VIP Mortgage, on December 18, 2008, the Commissioner issued an Order of Summary Suspension, Notice of Intent to Revoke Mortgage Correspondent Lender License, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing (“Notice”) setting forth allegations that VIP Mortgage failed to maintain a surety bond in violation of Section 36a-492(a) of the 2008 Supplement to the General Statutes, as amended by Public Acts 07-156 and 08-176, which Notice is incorporated herein by reference;
 
WHEREAS, VIP Mortgage received the Notice on December 26, 2008, and has waived its right to a hearing on the allegations contained in the Notice by failing to request a hearing within the statutorily prescribed timeframe set forth in the Notice;
 
WHEREAS, the Commissioner believes that the surety bond allegations arising from its investigation and the unregistered loan originator allegations arising from its examination would support initiation of enforcement proceedings against VIP Mortgage, including proceedings to revoke VIP Mortgage’s license for the Chicopee Office pursuant to Sections 36a-494(a)(1)(C) and 36a-51 of the Connecticut General Statutes, issue a cease and desist order against VIP 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 VIP 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 VIP Mortgage acknowledge the possible consequences of formal administrative proceedings;
 
WHEREAS, VIP 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, VIP Mortgage herein represents to the Commissioner that VIP Mortgage intended to surrender its Chicopee Office license in September 2008 when it surrendered its Danvers Office license;
 
WHEREAS, VIP Mortgage herein represents to the Commissioner that it conducted no business under its Chicopee Office license after September 2008 and that it has closed its Chicopee Office;
 
WHEREAS, VIP Mortgage herein represents to the Commissioner that after its receipt of the Notice, it conducted a search for its Chicopee Office license and was unable to locate it after a due diligence search; 
 
WHEREAS, VIP Mortgage herein represents to the Commissioner that the two (2) individuals alleged to be unregistered loan originators in violation of Sections 36a-486(b) and 36a-511(b) of the Connecticut General Statutes applicable during the period of December 2006 through February 2007 are no longer engaged in any mortgage-related activity with VIP Mortgage as VIP Mortgage is no longer in business;
 
WHEREAS, in connection with this settlement, VIP Mortgage was provided the option to pay a civil penalty in the amount of Two Thousand Dollars ($2,000) 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, VIP Mortgage was provided an alternative option to make a voluntary contribution in the amount of Two Thousand Dollars ($2,000) to the State Regulatory Registry LLC (“SRR”), a wholly-owned subsidiary of CSBS, to support NMLS&R;
 
WHEREAS, VIP Mortgage elected to make a voluntary contribution to SRR in lieu of a civil penalty;
 
AND WHEREAS, VIP 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 VIP Mortgage enter into this Settlement Agreement as follows:

1. No later than the date this Settlement Agreement is executed by VIP Mortgage, VIP Mortgage shall make a voluntary contribution by cashier’s check, certified check or money order in the amount of Two Thousand Dollars ($2,000) 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 VIP 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 VIP Mortgage based on the allegations contained herein if any representations made by VIP Mortgage in this Settlement Agreement are subsequently discovered to be untrue or if VIP 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 VIP 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 paragraph 2 herein, execution of this Settlement Agreement is without prejudice to the right of the Commissioner to take enforcement action against VIP Mortgage to enforce this Settlement Agreement if the Commissioner determines that VIP 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 6th day of April 2009.                ________/s/_________
                                                     Howard F. Pitkin
                                                     Banking Commissioner



I, Gregory Deschenes, state on behalf of VIP Mortgage Corporation, 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 VIP Mortgage Corporation, that VIP Mortgage Corporation agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that VIP Mortgage Corporation voluntarily agrees to enter into this Settlement Agreement, expressly waiving any right to a hearing on the matters described herein.                           

                                            
                                    By:  ________/s/_________
                                           Name:  Gregory Deschenes
                                           Title:  President
                                           VIP Mortgage Corporation


State of:  MA

County of:  Essex


On this the 2nd day of April 2009, before me, Mary Ellen LePage, the undersigned officer, personally appeared Gregory Deschenes who acknowledged himself/herself to be the President of VIP Mortgage Corporation, 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:  March 19, 2015


Administrative Orders and Settlements