DOB: Connecticut Mortgage Services, Inc., Settlement Agreement

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IN THE MATTER OF:

CONNECTICUT MORTGAGE
SERVICES, INC.

  ("Connecticut Mortgage Services")

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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, 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;
 
WHEREAS, Connecticut Mortgage Services is a Connecticut 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, on August 25, 2009, 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 Connecticut Mortgage Services 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 Connecticut Mortgage Services employed or retained, during the period of April 2008 through July 2008, one (1) individual as an originator or mortgage loan originator without registering or licensing such individual, in violation of Sections 36a-486(b) and 36a-511(b) of the then applicable Connecticut General Statutes;
 
WHEREAS, the Commissioner believes that such allegations would support initiation of enforcement proceedings against Connecticut Mortgage Services, including proceedings to revoke Connecticut Mortgage Services’ license pursuant to Section 36a-494(a) of the Connecticut General Statutes, as amended by Public Act 09-209, and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, issue a cease and desist order against Connecticut Mortgage Services pursuant to Section 36a-494(b) of the Connecticut General Statutes, as amended by Public Act 09-209, and Section 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 Connecticut Mortgage Services pursuant to Section 36a-494(b) of the Connecticut General Statutes, as amended, and Section 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 Connecticut Mortgage Services acknowledge the possible consequences of formal administrative proceedings;
 
WHEREAS, Connecticut Mortgage Services 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, Connecticut Mortgage Services herein represents to the Commissioner that the individual alleged to be an unregistered or unlicensed originator or mortgage loan originator in violation of the then applicable Sections 36a-486(b) and 36a-511(b) of the Connecticut General Statutes, during the period of April 2008 through July 2008, is no longer engaged in any mortgage-related activity with Connecticut Mortgage Services that would require such individual to be registered or licensed under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
 
WHEREAS, Connecticut Mortgage Services 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 Connecticut Mortgage Services requires licensure from the Commissioner under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
 
WHEREAS, in connection with this settlement, Connecticut Mortgage Services was provided the option to pay a civil penalty in the amount of One Thousand Dollars ($1,000) 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, Connecticut Mortgage Services was provided an alternative option to make a voluntary contribution in the amount of One Thousand Dollars ($1,000) to the State Regulatory Registry LLC (“SRR”), a wholly-owned subsidiary of the CSBS, to support the NMLS&R;
 
WHEREAS, Connecticut Mortgage Services elected to make a voluntary contribution to SRR in lieu of a civil penalty;
 
AND WHEREAS, Connecticut Mortgage Services, 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 Connecticut Mortgage Services enter into this Settlement Agreement as follows:

1. No later than the date this Settlement Agreement is executed by Connecticut Mortgage Services, Connecticut Mortgage Services shall make a voluntary contribution by cashier’s check, certified check or money order in the amount of One Thousand Dollars ($1,000) 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 Connecticut Mortgage Services 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 Connecticut Mortgage Services based on the allegations contained herein if any representations made by Connecticut Mortgage Services in this Settlement Agreement are subsequently discovered to be untrue or if Connecticut Mortgage Services 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 Connecticut Mortgage Services 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 mortgage loan 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 Connecticut Mortgage Services to enforce this Settlement Agreement if the Commissioner determines that Connecticut Mortgage Services 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 20th day of November 2009.         ________/s/_________
                                                     Howard F. Pitkin
                                                     Banking Commissioner



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

                                            By:  ________/s/_________
                                                   Name:  Thomas J. Valyo
                                                   Title:  President
                                                   Connecticut Mortgage Servicew, Inc.


State of:  Connecticut

County of:  Hartford


On this the 17 day of November 2009, before me, Amber Zanlungo, the undersigned officer, personally appeared Thomas J. Valyo who acknowledged himself to be the President of Connecticut Mortgage Services, Inc., a corporation, that he, 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 as President.

In witness whereof I hereunto set my hand.


                                         ________/s/_________
                                         Notary Public
                                         Date Commission Expires:  4/30/2013


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