DOB: Elm Tree Funding, LLC, Settlement Agreement

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IN THE MATTER OF:

ELM TREE FUNDING, LLC

    ("Elm Tree Funding")

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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, Elm Tree Funding is a corporation currently licensed as a mortgage broker under Part I of Chapter 668, Sections 36a-485 et seq. of the Connecticut General Statutes;
 
WHEREAS, on July 17, 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 Elm Tree Funding 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 Elm Tree Funding employed or retained, during the period of May 11, 2007 through June 23, 2009, one (1) individual as an originator without registering such individual in violation of Sections 36a-486(b) and 36a-511(b) of the then applicable Connecticut General Statutes, or without licensing such individual as a mortgage loan originator in violation of Section 36a-486(b) of the Connecticut General Statutes; 
 
WHEREAS, the Commissioner believes that such allegations would support initiation of enforcement proceedings against Elm Tree Funding, including proceedings to revoke Elm Tree Funding’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 Elm Tree Funding 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 Elm Tree Funding 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 Elm Tree Funding acknowledge the possible consequences of formal administrative proceedings;
 
WHEREAS, Elm Tree Funding 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, Elm Tree Funding herein represents to the Commissioner that the individual alleged to be an unregistered originator in violation of Sections 36a-486(b) and 36a-511(b) of then applicable Connecticut General Statutes, or alleged to be an unlicensed mortgage loan originator in violation of Section 36a-486(b), during the period of May 11, 2007 through June 23, 2009, is either currently licensed as a mortgage loan originator with Elm Tree Funding, or is no longer engaged in any mortgage-related activity with Elm Tree Funding that would require such individual to be licensed;
 
WHEREAS, Elm Tree Funding 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 Elm Tree Funding requires licensure from the Commissioner under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
 
AND WHEREAS, Elm Tree Funding, 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 Elm Tree Funding enter into this Settlement Agreement as follows:

1. No later than the date this Settlement Agreement is executed by Elm Tree Funding, Elm Tree Funding shall remit to the Department of Banking, by cashier’s or certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of One Thousand Dollars ($1,000) as a civil penalty; and
2. Upon entry of this Settlement Agreement, this matter will be resolved and the Commissioner will not take any future enforcement action against Elm Tree Funding 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 Elm Tree Funding based on the allegations contained herein if any representations made by Elm Tree Funding in this Settlement Agreement are subsequently discovered to be untrue or if Elm Tree Funding 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 Elm Tree Funding 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 Elm Tree Funding to enforce this Settlement Agreement if the Commissioner determines that Elm Tree Funding 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 22nd day of December 2009.         ________/s/_________
                                                     Howard F. Pitkin
                                                     Banking Commissioner



I, Scott Broder, state on behalf of Elm Tree Funding, LLC 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 Elm Tree Funding, LLC; that Elm Tree Funding, LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Elm Tree Funding, LLC voluntarily agrees to enter into this Settlement Agreement, expressly waiving any right to a hearing on the matters described herein.
                                            

                                            By:  ________/s/_________
                                                   Name:  Scott Broder
                                                   Title:  Member
                                                   Elm Tree Funding, LLC


State of:  Conn

County of:  Hartford


On this the 17 day of December 2009, before me, Barbara J. Kowalczyk, the undersigned officer, personally appeared Scott Broder who acknowledged himself to be the Member of Elm Tree Funding Group, LLC, a member managed/manager managed limited liability company, that he, as such Member, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company by himself as Member.

In witness whereof I hereunto set my hand.


                                         ________/s/_________
                                         Notary Public
                                         Date Commission Expires:  May 31, 2013


Administrative Orders and Settlements