DOB: Shorepoint Mortgage-LLC-CD-CP

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IN THE MATTER OF:

SHOREPOINT MORTGAGE, LLC
d/b/a SHORE POINTE MORTGAGE

    ("Respondent")

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NOTICE OF INTENT TO ISSUE
ORDER TO CEASE AND DESIST

NOTICE OF INTENT TO IMPOSE
CIVIL PENALTY

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”.
 
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 it 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 of the Connecticut General Statutes provides, in pertinent part, that:

(a)  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. . . .

Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that:

Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of the general statutes within the jurisdiction of the commissioner, or any . . . order . . . issued thereunder, the commissioner may send a notice to such person 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 person 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 . . . or orders alleged to have been violated; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.  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 person fails to appear at the hearing.  After the hearing, the commissioner shall determine whether an order to cease and desist should be issued against the person named in the notice.  If the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person.  No such order shall be issued except in accordance with the provisions of chapter 54.

Section 36a-50(a) of the Connecticut General Statutes provides, in pertinent part, that:

(1)  Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, or any . . . order . . . issued thereunder, the commissioner may send a notice to such person 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 person on the earlier of the date of actual receipt or seven days after mailing or sending.  Any such notice shall include:  (A) A statement of the time, place, and nature of the hearing; (B) a statement of the legal authority and jurisdiction under which the hearing is to be held; (C) a reference to the particular sections of the general statutes . . . or orders alleged to have been violated; (D) a short and plain statement of the matters asserted; (E) the maximum penalty that may be imposed for such violation; and (F) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.

(2)  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 such person fails to appear at the hearing.  After the hearing, if the commissioner finds that the person has violated any such provision, . . . the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by law, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.  If such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.

(3)  Each action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54.


II.  MATTERS ASSERTED
 
 
1. Respondent is a Connecticut limited liability company with an office at 180 Post Road East, Westport, Connecticut.
2.

At all times relevant hereto, Respondent was licensed to act as a mortgage broker in Connecticut.

3. On January 10, 2007, Respondent entered into a Settlement Agreement (“Settlement Agreement”) with the Commissioner wherein Respondent agreed not to act as a first or secondary mortgage broker in Connecticut without obtaining a license for each location where the business is to be conducted as required by the then applicable Sections 36a-490(a) and 36a-515(a) of Part I of Chapter 668 of the Connecticut General Statutes.  The Settlement Agreement states that “a violation of this Settlement Agreement shall be deemed to be a violation of an order of the Commissioner”.
4. Effective October 1, 2007, Respondent changed the address of its licensed location from 1255 Middlebury Road, Middlebury, Connecticut, to 564 Middlebury Road, Middlebury, Connecticut.
5. Effective July 31, 2008, Respondent voluntarily surrendered its mortgage broker license for an office at 180 Post Road East, Westport, Connecticut.
6. During the period of August through October 2008, Respondent acted as a mortgage broker from 1255 Middlebury Road, Middlebury, Connecticut, and 180 Post Road East, Westport, Connecticut, which locations were no longer licensed.
7.
During the period of January 2007 through October 2008, Respondent employed or retained three (3) individuals as originators or mortgage loan originators without registering or licensing them.
 

III.  STATUTORY BASIS FOR ORDER TO CEASE AND DESIST
AND IMPOSITION OF CIVIL PENALTY

Section 36a-486(b) of the Connecticut General Statutes, in effect as of January 1, 2007, provided, in pertinent part, that:
No licensee shall employ or retain an originator without first registering such originator under sections 36a-485 to 36a-498a, inclusive, provided such registration shall not be required for any originator who is registered by such licensee under sections 36a-510 to 36a-524, inclusive.
Section 36a-486 of the 2008 Supplement to the General Statutes, as amended by Public Acts 07-156 and 08-176, provided, in pertinent part, that:
(a)  No person shall engage in the business of making mortgage loans or act as a mortgage broker in this state unless such person has first obtained the required license for its main office and each branch office where such business is conducted in accordance with the provisions of sections 36a-485 to 36a-498a, inclusive. . . .
(b)  No person licensed as a . . . mortgage broker shall employ or retain a mortgage loan originator unless such mortgage loan originator is licensed under sections 36a-485 to 36a-498a, inclusive. . . .
Section 36a-511(b) of the Connecticut General Statutes, in effect as of January 1, 2007, provided, in pertinent part, that:
No licensee shall employ or retain an originator without first registering such originator under sections 36a-510 to 36a-524, inclusive, provided such registration shall not be required for any originator who is registered by such licensee under sections 36a-485 to 36a-498a, inclusive.
Section 36a-494(b) of the 2010 Supplement to the General Statutes provides, in pertinent part, that:
Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any of the provisions of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, . . . the commissioner may take action against such person or licensee in accordance with sections 36a-50 and 36a-52.
1. Respondent’s acting as a mortgage broker at or from two (2) locations that were not licensed, as more fully described in paragraphs 4 through 6 of the Matters Asserted, constitutes two separate violations of Section 36a-486(a) of the 2008 Supplement to the General Statutes, as amended.  Such violations form a basis to issue an order to cease and desist against Respondent pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty upon Respondent pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed Seven Thousand Five Hundred Dollars ($7,500), subject to its right to a hearing on the allegations set forth above.
2.

Respondent’s failure to comply with the Settlement Agreement, as more fully described in paragraphs 3 though 6 of the Matters Asserted, forms a basis to issue an order to cease and desist against Respondent pursuant to Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty against Respondent pursuant to Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed Ten Thousand Dollars ($10,000), subject to its right to a hearing on the allegations set forth above.

3.
Respondent’s employing or retaining three (3) individuals as originators or mortgage loan originators without registering or licensing them, as more fully described in paragraph 7 of the Matters Asserted, constitutes three separate violations of Sections 36a-486(b) and 36a-511(b) of the then applicable Connecticut General Statutes.  Such violations form a basis to issue an order to cease and desist against Respondent pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty upon Respondent pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed Three Thousand Dollars ($3,000), subject to its right to a hearing on the allegations set forth above.
 

IV.  NOTICE OF INTENT TO ISSUE ORDER TO CEASE AND DESIST,
NOTICE OF INTENT TO IMPOSE CIVIL PENALTY
AND NOTICE OF RIGHT TO HEARING
 
WHEREAS, the Commissioner has reason to believe that Respondent has engaged in acts or conduct which form a basis to issue an order to cease and desist against Respondent pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes and impose a civil penalty against Respondent pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes.
 
NOW THEREFORE, notice is hereby given to Respondent that the Commissioner intends to issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-486(b) of the Connecticut General Statutes, in effect as of January 1, 2007; Sections 36a-486(a) and 36a-486(b) of the 2008 Supplement to the General Statutes, as amended; and Section 36a-511(b) of the Connecticut General Statutes, in effect as of January 1, 2007, and an order issued by the Commissioner, and to impose a CIVIL PENALTY upon Respondent as set forth herein, 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 its receipt of this Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes.  This Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty 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 July 8, 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 that Respondent cease and desist from violating Section 36a-486(b) of the Connecticut General Statutes, in effect as of January 1, 2007; Sections 36a-486(a) and 36a-486(b) of the 2008 Supplement to the General Statutes, as amended; and Section 36a-511(b) of the Connecticut General Statutes, in effect as of January 1, 2007, and an order issued by the Commissioner, and may order the maximum civil penalty of Twenty Thousand Five Hundred Dollars ($20,500) be imposed upon Respondent.

 

Dated at Hartford, Connecticut
this 7th day of June 2010.                 ________/s/_________
                                                    Howard F. Pitkin
                                                    Banking Commissioner




CERTIFICATION

I hereby certify that on this 8th day of June 2010, the foregoing Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing was sent by registered mail, return receipt requested, to Shorepoint Mortgage, LLC d/b/a Shore Pointe Mortgage, c/o Daniel Shepro, Esq., Shepro & Blake, LLC, 2051 Main Street, Stratford, Connecticut 06615, registered mail no. RB028037116US.

________/s/_________
Doniel Kitt
Prosecuting Attorney


Administrative Orders and Settlements