DOB: Northern States Mortgage - SA

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IN THE MATTER OF:

NORTHERN STATES
MORTGAGE, LLC

    ("Northern States 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”;
 
WHEREAS, Northern States Mortgage is a Connecticut limited liability company 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 November 3, 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 Northern States 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 Northern States Mortgage employed or retained, during the period of January 12 through October 5, 2009, four (4) individuals as mortgage loan originators without licensing them, in violation of Section 36a-486(b) of the then applicable Connecticut General Statutes;
 
WHEREAS, the Commissioner believes that such allegation would support initiation of enforcement proceedings against Northern States Mortgage, including proceedings to revoke Northern States Mortgage’s license pursuant to Section 36a-494(a) and subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes, issue a cease and desist order against Northern States Mortgage 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 of up to one hundred thousand dollars ($100,000) per violation on Northern States Mortgage pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes 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 Northern States Mortgage acknowledge the possible consequences of formal administrative proceedings;
 
WHEREAS, Northern States Mortgage voluntarily agrees to enter into this Settlement Agreement without admitting or denying any allegation set forth herein, and solely for the purposes of obviating the need for formal administrative proceedings concerning the allegation described above;
 
WHEREAS, notwithstanding the foregoing, Northern States Mortgage acknowledges that this Settlement Agreement is a public record and constitutes, for the limited purposes of satisfying Northern States Mortgage’s disclosure obligations on its MU1, MU2 and MU4 Forms on the Nationwide Mortgage Licensing System, as applicable to Northern States Mortgage, a finding by the Commissioner that Northern States Mortgage has been involved in a violation of a financial services-related regulation or statute;
 
WHEREAS, Northern States Mortgage herein represents to the Commissioner that the individuals alleged to be unlicensed mortgage loan originators, in violation of Section 36a-486(b) of the then applicable Connecticut General Statutes, during the period of January 12, 2009 through October 5, 2009, are either currently licensed as mortgage loan originators under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes or are no longer engaged in any mortgage-related activity with Northern States Mortgage that would prohibit Northern States Mortgage from engaging the services of such individuals without licensure as mortgage loan originators under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
 
WHEREAS, Northern States 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 Northern States Mortgage requires licensure from the Commissioner under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
 
AND WHEREAS, Northern States Mortgage, through its execution of this Settlement Agreement, voluntarily agrees to waive any rights to a hearing upon the allegation 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 Northern States Mortgage enter into this Settlement Agreement as follows:

1. No later than the date this Settlement Agreement is executed by Northern States Mortgage, Northern States Mortgage shall remit to the Department of Banking by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of Four Thousand Dollars ($4,000) as a civil penalty;
2. Upon entry of this Settlement Agreement, this matter will be resolved and the Commissioner will not take any future enforcement action against Northern States Mortgage based upon the allegation contained herein; provided that entry of this Settlement Agreement is without prejudice to the right of the Commissioner to take enforcement action against Northern States Mortgage based on the allegation contained herein if any representations made by Northern States Mortgage in this Settlement Agreement are subsequently discovered to be untrue or if Northern States 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 Northern States 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 for its mortgage loan originators to apply for or obtain licensure 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 Northern States Mortgage to enforce this Settlement Agreement if the Commissioner determines that Northern States 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 11th day of January 2011.            ________/s/_________
                                                     Howard F. Pitkin
                                                     Banking Commissioner



I, Scott Rodgers, state on behalf of Northern States Mortgage, 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 Northern States Mortgage, LLC; that Northern States Mortgage, LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Northern States Mortgage, 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 M. Rodgers     
                                           Title:  Managing Partner
                                           Northern States Mortgage, LLC


State of:  PA

County of:  Butler

On this the 7th day of January 2011, before me, Florence K. Richard, the undersigned officer, personally appeared Scott M. Rodgers who acknowledged himself to be the Managing Partner of Northern States Mortgage, LLC, a member managed/manager managed limited liability company that he as such Managing Partner, 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 Managing Partner.

In witness whereof I hereunto set my hand.


                                     ________/s/_________
                                     Notary Public
                                     Date Commission Expires:  Jan. 7, 2014


Administrative Orders and Settlements