DOB: Worldwide Financial Resources, Inc., Notice of Intent to Issue Order to Cease and Desist, Impose Civil Penalty

* * * * * * * * * * * * * * * * *

IN THE MATTER OF:

WORLDWIDE FINANCIAL
RESOURCES, INC.

    ("Respondent")

* * * * * * * * * * * * * * * * *
*
*
*
*
*
*
*
*
*
*
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” and Sections 9 and 19 to 21, inclusive, of Public Act 09-209.
 
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:

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-52(a) of the Connecticut General Statutes provides, in pertinent part:

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.

Section 36a-50(a) of the Connecticut General Statutes provides, in pertinent part:

(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.


II.  MATTERS ASSERTED

1. Respondent is a New Jersey corporation with its main office at 50 Route 9 North, Building B, Morganville, New Jersey.
2. Respondent was previously licensed by the Commissioner under the name Worldwide Financial Resources, Inc. d/b/a Financial Resources as a mortgage lender under Part I of Chapter 668 of the Connecticut General Statutes.  Such license expired on December 31, 2008.
3. Respondent has not been licensed by the Commissioner to engage in the business of making mortgage loans or residential mortgage loans under Part I of Chapter 668 of the Connecticut General Statutes since December 31, 2008.
4. In connection with the Department’s investigation, the Department requested information regarding Respondent’s pipeline of mortgage loans in Connecticut.  Respondent provided the Department with such pipeline information.  On August 6, 2009, Respondent represented to the Department in writing that “[a]fter an exhaustive review, no loans are in the system for Connecticut”, and on August 7, 2009, represented to the Department in writing that “[t]here are no loans in Worldwide Financial Resources pending any action in Connecticut in our system for Worldwide Financial Resources, Inc.”
5. During the period from January 1, 2009 to July 31, 2009, Respondent closed ten (10) mortgage loans secured by first mortgages on residential property located in Connecticut.
6. During the period from July 31, 2009 to August 3, 2009, Respondent closed one (1) residential mortgage loan secured by a first mortgage.
7.
During the period from January 1, 2009 to present, Respondent failed to pay the loan proceeds for at least nine (9) first mortgage loans to the mortgagor, to the mortgagor’s attorney, to the mortgagee’s attorney or to any other person specified in any settlement statement, any written agreement between the mortgagor and the mortgagee or any written instruction of the mortgagor at the time of consummation of such loans or at the termination of any right to rescind such loans.
 

III.  STATUTORY BASIS FOR ORDER TO CEASE AND DESIST
AND IMPOSITION OF CIVIL PENALTY

Prior to July 31, 2009, Section 36a-486(a) of the Connecticut General Statutes, provided, in pertinent part:

No person shall engage in the business of making mortgage loans or act as a mortgage broker in this state unless such person has first obtained the required license for its main office and each branch office where such business is conducted in accordance with the provisions of sections 36a-485 to 36a-498a, inclusive.

After July 31, 2009, Section 36a-486(a) of the Connecticut General Statutes, as amended by Public Act 09-209, provides:

No person shall engage in the business of making residential mortgage loans or act as a mortgage broker in this state unless such person has first obtained the required license for its main office and each branch office where such business is conducted in accordance with the provisions of sections 36a-485 to 36a-498c, inclusive, . . . sections 36a-534a and 36a-534b, . . . and sections 9 and 19 to 21, inclusive, of . . . [Public Act 09-209].

Section 36a-758 of the Connecticut General Statutes provides, in pertinent part:

Any person who makes any first mortgage loan, as defined in section 36a-485, or any secondary mortgage loan, as defined in section 36a-485, shall, at the time of consummation of such loan or at the termination of any right to rescind the loan transaction under 12 CFR 226, as amended from time to time, whichever is later, pay the loan proceeds to the mortgagor, to the mortgagor’s attorney, to the mortgagee’s attorney or to any other person specified in any settlement statement, any written agreement between the mortgagor and the mortgagee or any written instruction of the mortgagor, by a certified, bank treasurer’s or cashier’s check or by means of wire transfer.

Section 36a-494(b) of the Connecticut General Statutes, as amended by Public Act 09-209, provides, in pertinent part:

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-498c, inclusive, . . . sections 36a-534a and 36a-534b, . . . and sections 9 and 19 to 21, inclusive, of . . . [Public Act 09-209] . . . the commissioner may take action against such person . . .in accordance with sections 36a-50 and 36a-52.

1. Respondent’s making of eleven (11) mortgage loans or residential mortgage loans without the required licensure, as more fully described in paragraphs 3, 5 and 6 of the Matters Asserted, constitutes a violation of Section 36a-486(a) of the Connecticut General Statutes, or Section 36a-486(a) of the Connecticut General Statutes, as amended, as applicable.  Such conduct forms the basis to issue an order to cease and desist pursuant to Section 36a-494(b) of the Connecticut General Statutes, as amended, and Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Section 36a-494(b) of the Connecticut General Statutes, as amended, and 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 civil penalty upon Respondent not to exceed Ten Thousand Dollars ($10,000), subject to Respondent’s right to a hearing on the allegations set forth above.
2.
Respondent’s failure to timely pay the loan proceeds for at least nine (9) first mortgage loans, as more fully described in paragraph 7 of the Matters Asserted, constitutes violations of Section 36a-758 of the Connecticut General Statutes.  Such conduct forms the basis for the Commissioner to issue an order to cease and desist pursuant to Section 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty 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 civil penalty upon Respondent not to exceed One Hundred Thousand Dollars ($100,000), subject to Respondent’s right to a hearing on the allegations set forth above.
 

IV.  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 form a basis to issue an order to cease and desist against Respondent pursuant to Section 36a-494(b) of the Connecticut General Statutes, as amended, and Section 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty against Respondent for each violation pursuant to Section 36a-494(b) of the Connecticut General Statutes, as amended, and Section 36a-50(a) of the Connecticut General Statutes.
 
NOW THEREFORE, notice is hereby given to Respondent that the Commissioner intends to issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-486(a) of the Connecticut General Statutes, Section 36a-486(a) of the Connecticut General Statutes, as amended, and Section 36a-758 of the Connecticut General Statutes, and impose a CIVIL PENALTY upon Respondent as set forth herein, subject to Respondent’s 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 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-52(a) and 36a-50(a) of the Connecticut General Statutes.  This 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 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 November 17, 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 that Respondent cease and desist from violating Section 36a-486(a) of the Connecticut General Statutes, Section 36a-486(a) of the Connecticut General Statutes, as amended, and Section 36a-758 of the Connecticut General Statutes, and may order a civil penalty in an amount not to exceed One Hundred Ten Thousand Dollars ($110,000) be imposed upon Respondent.



So ordered at Hartford, Connecticut
this 14th day of September 2009.              ________/s/_________
                                                           Howard F. Pitkin
                                                           Banking Commissioner



CERTIFICATION

I hereby certify that on this 14th day of September 2009, the foregoing 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 Worldwide Financial Resources, Inc., 50 Route 9 North, Building B, Morganville, New Jersey 07751, registered mail no. RB027869095US; and to Worldwide Financial Resources, Inc., c/o National Registered Agents, Inc., 12 Old Boston Post Road, Old Saybrook, Connecticut 06475, registered mail no. RB027869055US; and via facsimile to Worldwide Financial Resources, Inc., at (732) 698-9778.

                                                    ________/s/_________
                                                    Stacey Valerio
                                                    Prosecuting Attorney
 


Administrative Orders and Settlements