DOB: Allied Home Mortgage Capital Corporation, Settlement Agreement

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IN THE MATTER OF:

ALLIED HOME MORTGAGE
CAPITAL CORPORATION

  ("Allied Home 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, Allied Home Mortgage is a Texas corporation currently licensed as a Connecticut mortgage lender under Part I of Chapter 668, Sections 36a-485 et seq. of the Connecticut General Statutes;
 
WHEREAS, on March 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 Allied Home 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 Allied Home Mortgage employed or retained, during the period of February 2006 through December 2008, fifty-three (53) individuals as originators or mortgage loan originators without registering or licensing 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 Allied Home Mortgage, including proceedings to revoke Allied Home 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 Allied Home 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 Allied Home 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 Allied Home Mortgage acknowledge the possible consequences of formal administrative proceedings;
 
WHEREAS, Allied Home 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, Allied Home Mortgage herein represents to the Commissioner that five (5) of the individuals alleged to be unregistered originators or unlicensed mortgage loan 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 December 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 forty-eight (48) such individuals are no longer engaged in any mortgage-related activity with Allied Home Mortgage that would require such individuals to be registered or licensed under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
 
WHEREAS, Allied Home 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 Allied Home 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, Allied Home Mortgage was provided the option to pay a civil penalty in the amount of Fifty Thousand Dollars ($50,000) 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, Allied Home Mortgage was provided an option to make a voluntary contribution in the amount of Fifty Thousand Dollars ($50,000) to the State Regulatory Registry LLC (“SRR”), a wholly-owned subsidiary of CSBS, to support NMLS&R;
 
WHEREAS, Allied Home Mortgage elected to make a voluntary contribution to SRR;
 
AND WHEREAS, Allied Home 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 Allied Home Mortgage enter into this Settlement Agreement as follows:

1. No later than the date this Settlement Agreement is executed by Allied Home Mortgage, Allied Home Mortgage shall make a voluntary contribution by cashier’s check, certified check or money order in the amount of Fifty Thousand Dollars ($50,000) 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 Allied Home 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 Allied Home Mortgage based on the allegations contained herein if any representations made by Allied Home Mortgage in this Settlement Agreement are subsequently discovered to be untrue or if Allied Home 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 Allied Home 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 Allied Home Mortgage to enforce this Settlement Agreement if the Commissioner determines that Allied Home 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 7th day of January 2010.             ________/s/_________
                                                     Howard F. Pitkin
                                                     Banking Commissioner



I, ___________________________, state on behalf of Allied Home Mortgage Capital Corporation, 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 Allied Home Mortgage Capital Corporation; that Allied Home Mortgage Capital Corporation agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Allied Home Mortgage Capital Corporation voluntarily agrees to enter into this Settlement Agreement, expressly waiving any right to a hearing on the matters described herein.                                       

                                            By:  ________/s/_________
                                                   Name:  
                                                   Title:  
                                                   Allied Home Mortgage Capital Corporation


State of:  Texas

County of:  Harris


On this the 28 day of December 2009, before me, Cynthia A. Coogler, the undersigned officer, personally appeared F. Anthony Musgrave who acknowledged himself to be the Exec, VP / General Counsel of Allied Home Mortgage Capital Corporation, a corporation, and that he, as such EVP / General Counsel, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as EVP / General Counsel.

In witness whereof I hereunto set my hand.


                                         ________/s/_________
                                         Notary Public
                                         Date Commission Expires:  6-27-13


Administrative Orders and Settlements