DOB: Cornerstone Capital Mortgage & Real Estate Services, Inc., Settlement Agreement

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IN THE MATTER OF:

CORNERSTONE CAPITAL
MORTGAGE & REAL ESTATE
SERVICES, INC.

    ("Cornerstone Capital")

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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, Cornerstone Capital 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 July 28, 2008, 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 Cornerstone Capital 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 Cornerstone Capital employed or retained, during the period of February 2006 through February 2008, three (3) 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 Cornerstone Capital, including proceedings to revoke Cornerstone Capital’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 Cornerstone Capital 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 Cornerstone Capital 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 Cornerstone Capital acknowledge the possible consequences of formal administrative proceedings;
 
WHEREAS, Cornerstone Capital 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, Cornerstone Capital herein represents to the Commissioner that two of the three individuals alleged to be unregistered originators in violation of the then applicable Sections 36a-486(b) and 36a-511(b) of the Connecticut General Statutes, during the period of February 2006 through February 2008, are currently licensed as mortgage loan originators under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes and that the other such individual is no longer engaged in any mortgage-related activity with Cornerstone Capital 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, Cornerstone Capital 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 Cornerstone Capital 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, Cornerstone Capital was provided the option to pay a civil penalty in the amount of Three Thousand Dollars ($3,000) 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, Cornerstone Capital was provided an alternative option to make a voluntary contribution in the amount of Three Thousand Dollars ($3,000) to the State Regulatory Registry LLC (“SRR”), a wholly-owned subsidiary of CSBS, to support NMLS&R;
 
WHEREAS, Cornerstone Capital elected to make a voluntary contribution to SRR in lieu of a civil penalty;
 
AND WHEREAS, Cornerstone Capital, 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 Cornerstone Capital enter into this Settlement Agreement as follows:

1.
No later than the date this Settlement Agreement is executed by Cornerstone Capital, Cornerstone Capital shall make a voluntary contribution by cashier’s check, certified check or money order in the amount of Three Thousand Dollars ($3,000) 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 Cornerstone Capital 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 Cornerstone Capital based on the allegations contained herein if any representations made by Cornerstone Capital in this Settlement Agreement are subsequently discovered to be untrue or if Cornerstone Capital 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 Cornerstone Capital 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 Cornerstone Capital to enforce this Settlement Agreement if the Commissioner determines that Cornerstone Capital 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 31st day of December 2009.         ________/s/_________
                                                     Howard F. Pitkin
                                                     Banking Commissioner



I, Wende Foreman, state on behalf of Cornerstone Capital Mortgage & Real Estate 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 Cornerstone Capital Mortgage & Real Estate Services, Inc.; that Cornerstone Capital Mortgage & Real Estate Services, Inc., agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Cornerstone Capital Mortgage & Real Estate 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:  Wende Foreman
                                                   Title:  Secretary
                                                   Cornerstone Capital Mortgage &
                                                   Real Estate Services, Inc.


State of:  Connecticut

County of:  Fairfield


On this the 30th day of December 2009, before me, Alexis Billie Koulouris, the undersigned officer, personally appeared Wende Foreman who acknowledged herself to be the Secretary of Cornerstone Capital Mortgage & Real Estate Services, Inc., a corporation that she, as such _____________________, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company by herself as Wende Foreman.

In witness whereof I hereunto set my hand.


                                         ________/s/_________
                                         Notary Public:  
                                         Date Commission Expires:  October 31, 2011


Administrative Orders and Settlements