DOB: Fidelity Mortgage Services, Inc., Settlement Agreement

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IN THE MATTER OF:

FIDELITY MORTGAGE
SERVICES, INC.

    ("Fidelity 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, 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, Fidelity Mortgage is a corporation currently licensed as a mortgage lender under Part I of Chapter 668, Sections 36a-485 et seq. of the Connecticut General Statutes;
 
WHEREAS, on April 27, 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 Fidelity 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 Fidelity Mortgage employed or retained, during the period of June 8 through November 13, 2007, two (2) individuals as 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 believes that such allegations would support initiation of enforcement proceedings against Fidelity Mortgage, including proceedings to revoke Fidelity Mortgage’s 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 Fidelity Mortgage 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 Fidelity Mortgage 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 Fidelity Mortgage acknowledge the possible consequences of formal administrative proceedings;
 
WHEREAS, Fidelity 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, Fidelity Mortgage herein represents to the Commissioner that the two individuals alleged to be unregistered originators in violation of Sections 36a-486(b) and 36a-511(b) of the then applicable Connecticut General Statutes, during the period of June 8 through November 13, 2007, are either currently licensed as mortgage loan originators with Fidelity Mortgage, or are no longer engaged in any mortgage-related activity with Fidelity Mortgage that would require such individuals to be licensed under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes; 
 
WHEREAS, Fidelity 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 Fidelity Mortgage 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, Fidelity 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, Fidelity 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, Fidelity Mortgage elected to make a voluntary contribution to SRR in lieu of a civil penalty;
 
AND WHEREAS, Fidelity 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 Fidelity Mortgage enter into this Settlement Agreement as follows:

1.
Fidelity Mortgage shall make voluntary contributions by cashier’s check, certified check or money order in the total amount of Two Thousand Dollars ($2,000) to SRR to support NMLS&R, in accordance with the following schedule:
$1,000 on or before December 31, 2009; and an additional
$1,000 on or before January 29, 2010;
2. Upon entry of this Settlement Agreement, this matter will be resolved and the Commissioner will not take any future enforcement action against Fidelity 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 Fidelity Mortgage based on the allegations contained herein if any representations made by Fidelity Mortgage in this Settlement Agreement are subsequently discovered to be untrue or if Fidelity 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 Fidelity 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 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 Fidelity Mortgage to enforce this Settlement Agreement if the Commissioner determines that Fidelity 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 4th day of December 2009.        ________/s/_________
                                                     Howard F. Pitkin
                                                     Banking Commissioner



I, ________________________________, state on behalf of Fidelity 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 Fidelity Mortgage Services, Inc.; that Fidelity Mortgage Services, Inc., agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Fidelity 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:  L. Edward Vescovi
                                                   Title:  President
                                                   Fidelity Mortgage Services, Inc.


State of:  Connecticut

County of:  New Haven


On this the 20 day of November 2009, before me, Kristine M. Cogan, the undersigned officer, personally appeared L. Edward Vescovi who acknowledged himself to be the President of Fidelity 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:  Nov. 30, 2013


Administrative Orders and Settlements