DOB: PHH Mortgage Corporation, Settlement Agreement

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IN THE MATTER OF:

PHH MORTGAGE CORPORATION

PHH MORTGAGE CORPORATION
d/b/a CENTURY 21 MORTGAGE

PHH MORTGAGE CORPORATION d/b/a
COLDWELL BANKER MORTGAGE

PHH MORTGAGE CORPORATION
d/b/a ERA MORTGAGE

PHH MORTGAGE CORPORATION d/b/a
DOMAIN DISTINCTIVE PROPERTY
FINANCE

PHH MORTGAGE CORPORATION
d/b/a INSTAMORTGAGE.COM

PHH MORTGAGE CORPORATION
d/b/a PHH MORTGAGE SERVICES

    (collectively "PHH 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, in April 2007, PHH Mortgage was licensed by the Commissioner at various locations  as a mortgage lender under Part I of Chapter 668, Sections 36a-485 et seq. of the Connecticut General Statutes, and 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 PHH 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 such examination, the Commissioner alleges that PHH Mortgage  employed or retained during the period of February 28, 2006 through October 1, 2007, six (6) individuals as loan originators without registering them, in violation of Sections 36a-486(b) and 36a-511(b) of the Connecticut General Statutes; 
 
WHEREAS, PHH Mortgage is currently licensed by the Commissioner at various locations as a mortgage lender under Part I of Chapter 668, Sections 36a-485 et seq. of the Connecticut General Statutes;
 
WHEREAS, the Commissioner believes that the unregistered loan originator allegations would support initiation of enforcement proceedings against PHH Mortgage, including proceedings to revoke  PHH Mortgage’s licenses pursuant to Sections 36a-494(a) and 36a-51 of the Connecticut General Statutes, issue a cease and desist order against PHH 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 PHH 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 PHH Mortgage acknowledge the possible consequences of formal administrative proceedings;
 
WHEREAS, PHH 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, PHH 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 PHH Mortgage requires licensure from the Commissioner under Part I of Chapter 668, Sections 36-485 et seq., including but not limited to licensure as an originator under Section 36a-486(b) of the Connecticut General Statutes;
 
WHEREAS, PHH Mortgage herein represents to the Commissioner that the six individuals alleged to be unregistered loan originators in violation of Sections 36a-486(b) and 36a-511(b) of the Connecticut General Statutes during the period of February 28, 2006 through October 1, 2007 are no longer engaged in any mortgage-related activity with PHH Mortgage that would require such individuals to be licensed in Connecticut;
 
WHEREAS, in connection with this settlement, PHH Mortgage was provided the option to pay a civil penalty in the amount of Six Thousand Dollars ($6,000) 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, PHH Mortgage was provided an alternative option to make a voluntary contribution in the amount of Six Thousand Dollars ($6,000) to the State Regulatory Registry LLC (“SRR”), a wholly-owned subsidiary of CSBS, to support NMLS&R;
 
WHEREAS, PHH Mortgage elected to make a voluntary contribution to SRR in lieu of a civil penalty;
 
AND WHEREAS, PHH 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 PHH Mortgage enter into this Settlement Agreement as follows:

1. No later than the date this Settlement Agreement is executed by PHH Mortgage, PHH Mortgage  shall make a voluntary contribution by cashier’s check, certified check or money order in the amount of Six Thousand Dollars ($6,000) 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 PHH 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 PHH Mortgage based on the allegations contained herein if any representations made by PHH Mortgage in this Settlement Agreement are subsequently discovered to be untrue or if PHH 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 PHH 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 PHH Mortgage to enforce this Settlement Agreement if the Commissioner determines that PHH 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 9th day of April 2009.        

________/s/_________
Howard F. Pitkin
Banking Commissioner


I, William F. Brown, state on behalf of PHH Mortgage Corporation, PHH Mortgage Corporation d/b/a Century 21 Mortgage, PHH Mortgage Corporation d/b/a Coldwell Banker Mortgage, PHH Mortgage Corporation d/b/a ERA Mortgage, PHH Mortgage Corporation d/b/a Domain Distinctive Property Finance, PHH Mortgage Corporation d/b/a Insatmortgage.Com, and PHH Mortgage Corporation d/b/a PHH Mortgage Services (collectively “PHH 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 PHH Mortgage Corporation; that PHH Mortgage Corporation agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that PHH 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:  William F. Brown
                                                 Title:  Senior Vice President
                                                 PHH Mortgage Corporation

State of:  New Jersey

County of:  Burlington


On this the 3rd day of April 2009, before me, Geraldine A. Gager, the undersigned officer, personally appeared William F. Brown who acknowledged himself/herself to be the Sr. Vice President of PHH Mortgage Corporation, a corporation, and that he/she, as such Sr. Vice 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 Sr. Vice President.

In witness whereof I hereunto set my hand.

                                                 ________/s/_________
                                                 Notary Public
                                                 Date Commission Expires:  Sept. 23, 2012


Administrative Orders and Settlements