DOB: Karen Lisa Cabral a/k/a Karen Cabral-Allen, Notice of Intent to Refuse to Renew Mortgage Loan Originator License

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IN THE MATTER OF:

KAREN LISA CABRAL
a/k/a KAREN CABRAL-ALLEN

    ("Respondent")

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NOTICE OF INTENT TO REFUSE
TO RENEW MORTGAGE
LOAN ORIGINATOR LICENSE

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 she 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.
Subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes provides, in pertinent part, that:
(a)  The commissioner may . . . refuse to renew 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 . . . 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. . . .
(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 . . . refuse to renew 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 . . . refusal to renew.  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 . . . refuse to renew the license. . . .
Section 4-182 of the Connecticut General Statutes provides, in pertinent part, that:
(b)  When a licensee has made timely and sufficient application for the renewal of a license . . . , the existing license shall not expire until the application has been finally determined by the agency . . . .
(c)  No revocation, suspension, annulment or withdrawal of any license is lawful unless, prior to the institution of agency proceedings, the agency gave notice by mail to the licensee of facts or conduct which warrant the intended action, and the licensee was given an opportunity to show compliance with all lawful requirements for the retention of the license.
 
II.  MATTERS ASSERTED

1.
Respondent is an individual whose address last known to the Commissioner is 67 Elmore Street, Warwick, Rhode Island.
2.
On June 14, 2005, Respondent pled nolo contendere to Larceny under $500 (a felony) in Kent County Superior Court, Rhode Island.  Such conviction has not been pardoned.
3.
On October 17, 2006, Homeland Funding Solutions, Inc., which at the time was licensed with the Commissioner as a first and secondary mortgage broker, filed a New Application for Registration of Loan Originators (“Application”) with the Commissioner, seeking to register Respondent as an originator.
4. In connection with the Application, Respondent filed a New Application Addendum Form (“Originator Addendum”) signed and dated October 2, 2006.  In response to Question 1 on the Originator Addendum, which asked “[h]ave you ever been convicted in any state or federal court of any crime (not including motor vehicle traffic misdemeanors)?”, Respondent answered “No.”
5. On November 13, 2006, the Department issued an originator registration to Respondent.
6.
Effective July 1, 2008, Section 36a-486(b) of the Connecticut General Statutes, as amended by Public Acts 07-156 and 08-176, replaced the registration requirement for originators with a licensing requirement for mortgage loan originators.
7.
On August 28, 2008, Respondent transitioned onto the Nationwide Mortgage Licensing System (“NMLS”).  On December 30, 2008, Respondent filed a Form MU4, “Uniform Individual Mortgage License/Registration & Consent Form” (“Form MU4”) on the NMLS seeking to renew Respondent’s originator registration in the required form of a mortgage loan originator license (“Renewal Request”).  In response to Disclosure Question (D) on the Form MU4, which asked, “[h]ave you ever:  (1) been convicted of or pled guilty or nolo contendere (‘no contest’) in a domestic, foreign, or military court to any felony?”, and “(2) been charged with any felony?”, Respondent answered “Yes” to both questions.
8. On March 4, 2009, Respondent submitted supplemental information dated February 3, 2009, explaining why she answered, “no” in response to Question 1 on the Originator Addendum, providing that her “no” response was in error, and provided a copy of the Kent County Superior Court record showing her nolo contendere plea.  The Commissioner was not persuaded by her explanation.
9. On March 11, 2009, the Division sent a letter by certified mail to Respondent, pursuant to Section 4-182(c) of the Connecticut General Statutes, indicating that Respondent’s “no” response to Question 1 on the Originator Addendum appeared to be inconsistent with her criminal history and giving Respondent an opportunity to show compliance with all lawful requirements for the retention of her mortgage loan originator license.  The letter was received by Respondent on March 16, 2009.  As of the date of this Notice, Respondent has provided no response to the issue raised by the March 11, 2009 letter beyond the information described in paragraph 8.
10.
On October 28, 2009, the Division sent a letter by certified mail to Respondent, pursuant to Section 4-182(c) of the Connecticut General Statutes, indicating that Respondent’s felony conviction disclosed in connection with her Renewal Request appeared to constitute a disqualifying felony under Section 36a-489(b)(1), as amended by Public Acts 09-208 and 09-209, and indicating that her “no” response to Question 1 on the Originator Addendum appeared to demonstrate a lack of character and general fitness so as to command the confidence of the community and to warrant a determination that Respondent will operate “honestly. . . within the purpose 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] . . .”, and giving Respondent an opportunity to show compliance with all lawful requirements for the retention and renewal of her mortgage loan originator license.  The letter was received by Respondent on November 13, 2009.  As of the date of this Notice, Respondent has failed to respond to the October 28, 2009 letter sent by the Division.
11.
On November 5, 2009, a request for renewal of Respondent’s mortgage loan originator license for the 2010 license period was submitted on NMLS.
 

III.  STATUTORY BASIS FOR REFUSAL
TO RENEW MORTGAGE LOAN ORIGINATOR LICENSE

Section 36a-494(a)(2) of the Connecticut General Statutes, as amended by Public Act 09-209, provides, in pertinent part, that:

The commissioner may . . . refuse to renew any mortgage loan originator license . . . , 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-498c, inclusive, . . . sections 36a-534a and 36a-534b, . . . and sections 9 and 19 to 21, inclusive, of . . . [Public Act 09-209], . . . , or if the licensee . . . has violated any of the provisions of this title . . . .

Section 36a-489(b)(1) of the Connecticut General Statutes, as amended by Public Acts 09-208 and 09-209, provides, in pertinent part:

The commissioner shall not issue an initial license for a mortgage loan originator unless the commissioner, at a minimum, finds that the applicant has: . . . (B) notwithstanding the provisions of section 46a-80, as amended by . . . [Public Act 09-209], not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign or military court during the seven-year period preceding the date of the application for licensing or at any time preceding such date of application if such felony involved an act of fraud, dishonesty, a breach of trust, or money laundering, provided any pardon of a conviction shall not be a conviction for purposes of this subdivision; [and] (C) demonstrated financial responsibility, character and general fitness so as to command the confidence of the community and to warrant a determination that the mortgage loan originator will operate honestly, fairly and efficiently within the purpose 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-489(b)(2) of the Connecticut General Statutes, as amended, provides, in pertinent part:

(A)  The minimum standards for license renewal for a mortgage loan originator shall include the following:  (i) The mortgage loan originator continues to meet the minimum standards for license issuance under subdivision (1) of this subsection; . . . .

(B)  The license of a mortgage loan originator that fails to satisfy the minimum standards for license renewal shall expire.

Section 36a-53a of the Connecticut General Statutes provides:

No person shall make or cause to be made . . . in any document filed with the commissioner. . . any statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect.

1.
Respondent’s plea of nolo contendere to a felony which has not been pardoned, as more fully described in paragraph 2 of the Matters Asserted, prevents the Commissioner from renewing Respondent’s license to act as a mortgage loan originator pursuant to Sections 36a-489(b)(2) and 36a-489(b)(1)(B) of the Connecticut General Statutes, as amended, which constitutes sufficient grounds to refuse to renew Respondent’s mortgage loan originator license pursuant to Section 36a-494(a)(2) of the Connecticut General Statutes, as amended, and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes.
2.
Respondent’s response to Question 1 on the Originator Addendum, as more fully described in paragraph 4 of the Matters Asserted, constitutes the making of a statement in a document filed with the Commissioner which is, at the time and in the light of the circumstances under which it is made, false or misleading in a material respect in violation of Section 36a-53a of the Connecticut General Statutes.  Such violation constitutes sufficient grounds to refuse to renew Respondent’s mortgage originator license under Section 36a-494(a)(2) of the Connecticut General Statutes, as amended, and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes.
3.
Respondent’s response to Question 1 on the Originator Addendum, as more fully described in paragraph 4 of the Matters Asserted, fails to demonstrate that Respondent has the character and general fitness so as to command the confidence of the community and to warrant a determination that Respondent will operate honestly, fairly and efficiently within the purpose of Sections 36a-485 to 36a-498c, inclusive, as amended, sections 36a-534a and 36a-534b, as amended, and sections 9 and 19 to 21, inclusive, of Public Act 09-209.  Such failure prevents the Commissioner from renewing Respondent’s license as a mortgage loan originator pursuant to Sections 36a-489(b)(2) and 36a-489(b)(1)(C) of the Connecticut General Statutes, as amended, which constitutes sufficient grounds to refuse to renew Respondent’s mortgage loan originator license pursuant to Section 36a-494(a)(2) of the Connecticut General Statutes, as amended, and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes.
 

IV.  NOTICE OF INTENT TO REFUSE TO RENEW MORTGAGE
LOAN ORIGINATOR LICENSE 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 refuse to renew Respondent’s license to act as a mortgage loan originator in Connecticut pursuant to Section 36a-494(a)(2) of the Connecticut General Statutes, as amended, and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes.
 
NOW THEREFORE, notice is hereby given to Respondent that the Commissioner intends to REFUSE TO RENEW Respondent’s license to act as a mortgage loan originator in Connecticut, 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 his receipt of this Notice of Intent to Refuse to Renew Mortgage Loan Originator License and Notice of Right to Hearing as set forth in subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes.  This Notice of Intent to Refuse to Renew Mortgage Loan Originator License 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 February 24, 2010, 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 refusing to renew Respondent’s license to act as a mortgage loan originator in Connecticut, and Respondent’s mortgage originator license in Connecticut shall be deemed expired.



So Ordered at Hartford, Connecticut
this 21st day of December 2009.                ________/s/_________
                                                            Howard F. Pitkin
                                                            Banking Commissioner

 

CERTIFICATION

I hereby certify that on this 21st day of December 2009, the foregoing Notice of Intent to Refuse to Renew Mortgage Loan Originator License and Notice of Right to Hearing was sent by registered mail, return receipt requested, to Karen Lisa Cabral a/k/a Karen Cabral-Allen, 67 Elmore Street, Warwick, Rhode Island 02886, registered mail no. RB028036813US.

                                                            ________/s/_________
                                                            Stacey Valerio
                                                            Prosecuting Attorney


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