DOB: Greenwich Mortgage Corporation d/b/a Greenwich Home Mortgage Corporation, Temporary Order to Cease and Desist, Order of Summary Suspension, Notice of Intent to Revoke Mortgage Lender License, Issue Order to Cease and Desist, Impose Civil Penalty

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IN THE MATTER OF:

GREENWICH MORTGAGE
CORPORATION d/b/a
GREENWICH HOME MORTGAGE
CORPORATION

    ("Respondent")

 
 


 

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TEMPORARY ORDER TO
CEASE AND DESIST

ORDER OF SUMMARY SUSPENSION

NOTICE OF INTENT TO REVOKE
MORTGAGE LENDER 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-534c, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators”.
 
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 that:

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-51 of the Connecticut 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 . . . or orders 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.  If the commissioner finds that public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in the notice, the commissioner may order summary suspension of a license in accordance with subsection (c) of section 4-182 and require the licensee to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section, pending proceedings for . . . revocation . . . .

(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 of the Connecticut 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, or any . . . order . . . issued thereunder, 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 . . . or orders 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.

(b)  If the commissioner finds that the public welfare requires immediate action, the commissioner may incorporate a finding to that effect in the notice sent in accordance with subsection (a) of this section and issue a temporary order requiring the person to cease and desist from the activity which constitutes such alleged violation and to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section.  Such temporary order shall become effective on receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the notice.

Section 36a-50(a) 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, or any . . . order . . . issued thereunder, 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 . . . or orders 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 . . . or order, 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-492 of the Connecticut General Statutes provides, in pertinent part, that:

(a)  No mortgage lender . . . license, and no renewal thereof, shall be granted unless the applicant has filed a bond with the commissioner written by a surety authorized to write such bonds in this state, in the sum of forty thousand dollars . . . .  Any borrower or prospective borrower who may be damaged by failure to perform any written agreements or commitments, or by the wrongful conversion of funds paid by a borrower or prospective borrower to a licensee, may proceed on such bond against the principal or surety thereon, or both, to recover damages. . . .  The bond shall run concurrently with the period of the license granted to the applicant, and the aggregate liability under the bond shall not exceed the penal sum of the bond.

(b)  The surety company shall have the right to cancel the bond at any time by a written notice to the licensee stating the date cancellation shall take effect.  Such notice shall be sent by certified mail to the licensee at least thirty days prior to the date of cancellation.  A surety bond shall not be cancelled unless the surety company notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation.

Section 36a-494 of the Connecticut General Statutes provides, in pertinent part, that:

(a)(1)  The commissioner may . . . revoke . . . any mortgage lender . . . license or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498a, inclusive, or if the commissioner finds that the licensee or any proprietor, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has . . . (C) violated any of the provisions of this title . . . .

(b)  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 4-182(c) of the Connecticut General Statutes provides, in pertinent part, that:

If the agency finds that public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in its order, summary suspension of a license may be ordered pending proceedings for revocation or other action.  These proceedings shall be promptly instituted and determined.


II.  MATTERS ASSERTED

1.
Respondent is a Rhode Island corporation with an office at 345 Hope Street, Providence, Rhode Island (“Providence Office”).
2.
On May 19, 2008, Respondent entered into a Settlement Agreement and Withdrawal of Notice of Automatic Suspension (collectively, “Settlement Agreement”) with the Commissioner wherein Respondent agreed to cease and desist from violating Section 36a-492(a) of the Connecticut General Statutes and agreed to maintain surety bonds that run concurrently with any license issued to Respondent under Part I(A) of Chapter 668 of the Connecticut General Statutes.  The Settlement Agreement states that “a violation of this Settlement Agreement . . . shall be deemed to be a violation of an order of the Commissioner”.
3.
On December 31, 2008, Respondent requested a renewal of its mortgage lender license on the Nationwide Mortgage Licensing System for the January 1 through December 31, 2009 renewal period, which license was renewed on January 12, 2009.
4.
On March 6, 2009, the Commissioner received notice from Liberty Mutual Insurance Company that surety bond number 024028840 issued on behalf of Respondent with respect to its mortgage lender license for the Providence Office would be cancelled, effective on April 7, 2009.
5.
On March 10, 2009, pursuant to Section 4-182(c) of the Connecticut General Statutes, the Division sent a letter to Respondent giving Respondent an opportunity to show compliance with all lawful requirements for retention of its mortgage lender license in Connecticut.
6.
To date, Respondent has failed to file with the Commissioner a new surety bond or a replacement surety bond.
 

III.  STATUTORY BASIS FOR REVOCATION OF MORTGAGE LENDER LICENSE,
ORDER TO CEASE AND DESIST AND IMPOSITION OF CIVIL PENALTY

1.
Respondent’s failure to maintain a surety bond that runs concurrently with the period of its mortgage lender license, as more fully described in paragraphs 3 through 6, inclusive, of the Matters Asserted, is a violation of Section 36a-492(a) of the Connecticut General Statutes and constitutes sufficient grounds for the Commissioner to deny an application for such license, both of which are sufficient grounds for the Commissioner to revoke Respondent’s license to engage in the business of a mortgage lender in Connecticut from the Providence Office pursuant to Sections 36a-494(a)(1), 36a-494(a)(1)(C) and 36a-51 of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut 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 Thousand Five Hundred Dollars ($1,500), subject to its right to a hearing on the allegations set forth above.
2.
Respondent’s failure to comply with the Settlement Agreement, as more fully described in paragraph 2 of the Matters Asserted, constitutes sufficient grounds for the Commissioner to deny an application for a mortgage lender license, which are grounds for the Commissioner to revoke Respondent’s license to engage in the business of a mortgage lender in Connecticut from the Providence Office pursuant to Sections 36a-494(a)(1) and 36a-51 of the Connecticut General Statutes, and forms the basis to issue an order to cease and desist against Respondent pursuant to Section 36a-52(a) of the Connecticut 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 Thousand Five Hundred Dollars ($1,500), subject to its right to a hearing on the allegations set forth above.

IV.  FINDINGS AND STATUTORY BASIS FOR TEMPORARY ORDER
TO CEASE AND DESIST AND ORDER OF SUMMARY SUSPENSION

The Commissioner finds that public safety and welfare imperatively require emergency action to summarily suspend Respondent’s license to engage in the business of a mortgage lender in Connecticut from the Providence Office under Section 4-182(c) of the Connecticut General Statutes and finds that public welfare requires immediate action to issue a temporary order requiring Respondent to cease and desist from violating Section 36a-492(a) of the Connecticut General Statutes and violating an order issued by the Commissioner pursuant to Section 36a-52(b) of the Connecticut General Statutes, in that due to Respondent’s failure to maintain its surety bond, any borrower or prospective borrower who may be damaged by Respondent’s failure to perform any written agreements or commitments, or Respondent’s wrongful conversion of funds paid by a borrower or prospective borrower to Respondent, will not be able to proceed on such surety bond to recover damages.


V.  TEMPORARY ORDER TO CEASE AND DESIST, ORDER OF
SUMMARY SUSPENSION, NOTICE OF INTENT TO REVOKE MORTGAGE LENDER
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 Respondent has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke its license to engage in the business of a mortgage lender in Connecticut from the Providence Office pursuant to Sections 36a-494(a)(1), 36a-494(a)(1)(C) and 36a-51 of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty against Respondent pursuant to Section 36a-50(a) of the Connecticut General Statutes;
 
AND WHEREAS, the Commissioner has made the findings required under Sections 4-182(c) and 36a-52(b) of the Connecticut General Statutes.
 
THE COMMISSIONER THEREFORE ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that Greenwich Mortgage Corporation d/b/a Greenwich Home Mortgage Corporation immediately CEASE AND DESIST from violating Section 36a-492(a) of the Connecticut General Statutes and an order issued by the Commissioner.  This Temporary Order shall become effective upon receipt by Greenwich Mortgage Corporation d/b/a Greenwich Home Mortgage Corporation, and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order.
 
THE COMMISSIONER FURTHER ORDERS, pursuant to Section 4-182(c) of the Connecticut General Statutes, that the license of Greenwich Mortgage Corporation d/b/a Greenwich Home Mortgage Corporation to engage in the business of a mortgage lender in Connecticut from 345 Hope Street, Providence, Rhode Island, be and is hereby SUMMARILY SUSPENDED pending proceedings for revocation.
 
FURTHER, notice is hereby given to Respondent that the Commissioner intends to REVOKE Respondent’s license to engage in the business of a mortgage lender in Connecticut from the Providence Office, issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-492(a) of the Connecticut General Statutes and an order issued by the Commissioner, and impose a CIVIL PENALTY upon Respondent as set forth herein, subject to its 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, Consumer Credit Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following its receipt of this Temporary Order to Cease and Desist, Order of Summary Suspension, Notice of Intent to Revoke Mortgage Lender License, 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 Sections 36a-51 and 36a-52(a) of the Connecticut General Statutes.  This Temporary Order to Cease and Desist, Order of Summary Suspension, Notice of Intent to Revoke Mortgage Lender License, 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 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 June 24, 2009, at 10 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 Respondent does not request a hearing within the time prescribed, the Commissioner will issue an order revoking Respondent’s license to engage in the business of a mortgage lender in Connecticut from 345 Hope Street, Providence, Rhode Island, issue an order that Respondent cease and desist from violating Section 36a-492(a) of the Connecticut General Statutes and an order issued by the Commissioner, and may order that the maximum civil penalty of Three Thousand Dollars ($3,000) be imposed upon Respondent.


So ordered at Hartford, Connecticut
this 4th day of May 2009.                          ________/s/_________
                                                               Howard F. Pitkin
                                                               Banking Commissioner



CERTIFICATION

I hereby certify that on this 4th day of May 2009, the foregoing Temporary Order to Cease and Desist, Order of Summary Suspension, Notice of Intent to Revoke Mortgage Lender License, 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 Greenwich Mortgage Corporation d/b/a Greenwich Home Mortgage Corporation, 345 Hope Street, Providence, Rhode Island 02906, registered mail no. RB028036155US.

                                                              ________/s/_________
                                                              Doniel Kitt
                                                              Prosecuting Attorney
 


Administrative Orders and Settlements