DOB: REF Mortgage Capital - Sum Susp-Temp CD-NOI Rev-CD-CP

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IN THE MATTER OF:

REF MORTGAGE CAPITAL INC
NMLS # 1424304
("REF Mortgage Capital")

ROBERT ERNEST FIALA
NMLS # 70963
("Fiala")

    (collectively "Respondents")





 
 
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ORDER OF SUMMARY SUSPENSION

TEMPORARY ORDER TO
CEASE AND DESIST

NOTICE OF INTENT TO REVOKE
MORTGAGE BROKER LICENSE

NOTICE OF INTENT TO REVOKE
MORTGAGE LOAN ORIGINATOR
LICENSE

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-534b, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators”.
 
Pursuant to the authority granted by Sections 36a-17 and 36a-498f of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondents to determine if they have violated, are violating or are 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 . . . (1) 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 . . . .

(c)  For the purpose of any investigation, [or] examination . . . under this title the commissioner may . . . require the production of any records which the commissioner deems relevant or material. . . .

(f)  As used in this section, “records” includes, but is not limited to, books, papers, correspondence, memoranda, agreements, diaries, logs, notes, ledgers, journals, visual, audio, magnetic or electronic recordings, computer printouts and software, and any other documents.

Section 36a-498f of the Connecticut General Statutes provides, in pertinent part, that:

(a)  In addition to any authority provided under this title, the Banking Commissioner shall have the authority to conduct investigations and examinations as follows:

(1)  For purposes of . . . license suspension, license conditioning, license revocation or termination, or general or specific inquiry or investigation to determine compliance with sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, the commissioner may access, receive and use any books, accounts, records, files, documents, information or evidence including, but not limited to:  . . . (C) any other documents, information or evidence the commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control or custody of such documents, information or evidence. . . .

(c)  In making any examination or investigation authorized by this section, the commissioner may control access to any documents and records of the licensee or person under examination or investigation.  The commissioner may take possession of the documents and records . . . .

Section 36a-51 of the Connecticut General Statutes provides, in pertinent part, that:

(a)  The commissioner may . . . revoke . . . 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.  If the commissioner finds that public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in the notice, the commissioner may order summary suspension of a license in accordance with subsection (c) of section 4-182 and require the licensee to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section, pending proceedings for . . . revocation . . . .

(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 . . . revoke . . . 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 . . . revocation . . . .  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 . . . revoke . . . the license.  No such license shall be . . . revoked except in accordance with the provisions of chapter 54.

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

(a)  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, . . . 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 . . . 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.

(b)  If the commissioner finds that the public welfare requires immediate action, the commissioner may incorporate a finding to that effect in the notice sent in accordance with subsection (a) of this section and issue a temporary order requiring the person to cease and desist from the activity which constitutes such alleged violation and to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section.  Such temporary order shall become effective on receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the notice.

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, . . . 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 . . . 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 not later than fourteen days after 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.

Section 4-182(c) of the Connecticut General Statutes provides, in pertinent part, that:

If the agency finds that public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in its order, summary suspension of a license may be ordered pending proceedings for revocation or other action.  These proceedings shall be promptly instituted and determined.


II.  MATTERS ASSERTED

1.
REF Mortgage Capital is a Connecticut corporation located at 112 Southbury Road, Roxbury, Connecticut.
2.
REF Mortgage Capital is currently licensed on the Nationwide Multistate Licensing System and Registry (“NMLS”), through the Commissioner, to act as a mortgage broker in Connecticut.  REF Mortgage Capital first became licensed to act as a mortgage broker in Connecticut on January 20, 2016.
3.
Fiala is the control person and owner of REF Mortgage Capital.  He is also REF Mortgage Capital’s qualified individual for its main office, and REF Mortgage Capital’s only licensed mortgage loan originator.  At no point since REF Mortgage Capital first became licensed as a mortgage broker has Fiala not been REF Mortgage Capital’s owner, qualified individual, control person, and only licensed mortgage loan originator.
4.
Fiala is currently licensed by the Commissioner on NMLS to engage in the business of a mortgage loan originator in Connecticut and is sponsored by REF Mortgage Capital.
5.
On or about July 10, 2017, the Division advised REF Mortgage Capital, through Fiala, that it was going to perform an examination on August 8, 2017, into its mortgage brokerage activities for the period between January 20, 2016 until July 31, 2017 (“2017 Examination”).  The Division selected REF Mortgage Capital for review, in part, because it had not previously performed an examination of the company, having only recently become licensed.
6. In accordance with its advance notice to REF Mortgage Capital, on August 8 and 9, 2017, the Division attempted to conduct a routine examination of REF Mortgage Capital at the company’s office located in Roxbury, Connecticut (“Examination”).
7.
During the Examination, the Division asked REF Mortgage Capital to produce all of the closed loan files it acted as a mortgage broker for since the date it became licensed.  REF Mortgage Capital produced the loan files for 15 such files, 14 of which were funded and one which was not.
8. The Division reviewed the 15 loan files that REF Mortgage Capital produced.
9. As the only licensed mortgage loan originator sponsored by the company, Fiala was the mortgage loan originator on each of the 15 mortgage loan files.  Moreover, according to Fiala’s statements to the Division during the  Examination, REF Mortgage Capital does not and did not employ, retain or otherwise engage the services of any loan processors, secretaries or other personnel to assist in the brokering of the 15 mortgage loans.  Fiala was thus the only individual with access to REF Mortgage Capital’s mortgage loan files.
10.
In at least one of REF Mortgage Capital’s loan files originated by Fiala, the Division determined that documents had been fraudulently altered.  For example, the Division found that (a) borrowers’ signatures were physically or digitally cut from one document and taped or digitally pasted onto other documents to make document copies appear as originals or that the borrowers had signed or executed documents when they had not, and (b) REF Mortgage Capital, through Fiala, had fraudulently altered dates on documents with correction fluid or tape to make it appear as though mortgage-related documents had been timely given to borrowers when they had not.  Specifically, the Division found the following alterations, omissions and errors in REF Mortgage Capital mortgage loan files in which Fiala was the mortgage loan originator, identified below by borrower initials:

a.
In the loan file of K.B., Fiala (1) copied and pasted K.B.’s signature from one document onto no less than three other documents; and (2) used correction fluid on documents in an attempt to cover up his actions.
b.
In the loan file of J.C., Fiala (1) copied J.C.’s signature from one document on at least one other document; and (2) signed the borrower’s signature himself on at least one document.
c.
In the loan file of L.K. and a co-borrower, Fiala signed the borrowers’ signatures himself on at least one document.
d.
In the loan file of G.L., Fiala signed G.L.’s signature himself onto at least one document.
e.
In the loan file of D.L., Fiala (1) used correction fluid or tape to change dates on forms that D.L. allegedly previously signed in an attempt to make those forms appear as though they had been given within a certain timeframe or on a certain date, when they had not; (2) signed the borrower’s signature himself onto at least one document; (3) changed or attempted to add fees to disclosures after D.L. had allegedly signed those disclosures.
f. In the loan file of K.P. and a co-borrower, Fiala (1) copied and pasted K.P.’s signature from one document onto no less than three other documents; and (2) used correction fluid on documents in an attempt to cover up his actions.
g.
In the loan file W.P., Fiala (1) used correction fluid or tape to change dates on forms that W.P. allegedly previously signed in an attempt to make those forms appear as though they had been given within a certain timeframe or on a certain date, when they had not; and (2) signed W.P.’s signature himself on at least one document.
h. In the loan file of P.S., Fiala signed P.S.’s signature himself on at least one document, or, alternatively, copied and pasted P.S.’s signature from one document onto no less than one other document.
i. In the loan file of D.S., Fiala (1) signed D.S.’s signature himself on at least one document, or, alternatively, copied and pasted D.S.’s signature from one document onto no less than one other document; and (2) used correction fluid or tape to change dates on forms that D.S. allegedly previously signed in an attempt to make those forms appear as though they had been given within a certain timeframe or on a certain date, when they had not.
j.
In the loan file of C.V., Fiala (1) signed the C.V.; A s signature himself onto at least one document, or, alternatively, copied and pasted C.V.’s signature from one document onto no less than one other document; and (2) used correction fluid or tape to change dates on forms that C.V. allegedly previously signed in an attempt to make those forms appear as though they had been given within a certain timeframe or on a certain date, when they had not.
 

III.  STATUTORY BASIS FOR REVOCATION OF MORTGAGE BROKER LICENSE,
REVOCATION OF MORTGAGE LOAN ORIGINATOR LICENSE,
ORDER TO CEASE AND DESIST AND IMPOSITION OF CIVIL PENALTY

Section 36a-494 of the Connecticut General Statutes provides, in pertinent part, that:

(a)(1)  The commissioner may . . . revoke . . . any . . . mortgage broker license or take any other action, 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-498f, inclusive, 36a-534a and 36a-534b, or if the commissioner finds that the licensee, any control person of the licensee, the qualified individual . . . with supervisory authority, trustee, employee or agent of such licensee has done any of the following:  . . . (B) committed any fraud, misappropriated funds or misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any residential mortgage loan transaction . . . to anyone entitled to such information; [or] (C) violated any of the provisions of this title . . . .

(2)  The commissioner may . . . revoke . . . any mortgage loan originator license . . . or take any other action, 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-498f, inclusive, 36a-534a and 36a-534b, or if the commissioner finds that the licensee has committed any fraud, misappropriated funds, misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any residential mortgage loan transaction or has violated any of the provisions of this title . . . or any other law or regulation applicable to the conduct of such licensee’s business.

(b)  Whenever it appears to the commissioner that (1) 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, . . . (2) any person is, was, or would be a cause of the violation of any such provisions . . . due to an act or omission such person knew or should have known would contribute to such violation, or (3) any licensee has . . . committed any fraud, misappropriated funds or misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any residential mortgage loan transaction . . . to anyone entitled to such information, the commissioner may take action against such person or licensee in accordance with sections 36a-50 and 36a-52.

Section 36a-53b of the Connecticut General Statutes provides, in pertinent part, that:

No person shall, in connection with any activity subject to the jurisdiction of the commissioner:  (1) Employ any device, scheme or artifice to defraud; . . . or (3) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.

Section 36a-498e of the Connecticut General Statutes provides, in pertinent part, that:

No person or individual who is required to be licensed and who is subject to sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b may:

(1)  Directly or indirectly employ any scheme, device or artifice to defraud or mislead borrowers or lenders or to defraud any person; [or]

(2)  Engage in any unfair or deceptive practice toward any person . . . .

Section 36a-489(a)(1) of the Connecticut General Statutes provides, in pertinent part, that:

The commissioner shall not issue an initial license for a . . . mortgage broker unless the commissioner, at a minimum, finds that:  . . . (C) the applicant demonstrates that the . . . character and general fitness of the applicant, the control persons of the applicant and the qualified individual . . . having supervisory authority over the office for which the license is sought are such as to command the confidence of the community and to warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b . . . .  If the commissioner fails to make such findings, the commissioner shall not issue a license . . . .

Section 36a-489(b)(1) of the Connecticut General Statutes provides, in pertinent part, that:

The commissioner shall not issue an initial license for a mortgage loan originator . . . unless the commissioner, at a minimum, finds that the applicant has:  . . . (C) demonstrated . . . 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 purposes of sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b . . . .

1.
REF Mortgage Capital’s alteration of loan file documents, through Fiala, as more fully described in paragraph 10 of the Matters Asserted, constitutes (1) directly or indirectly employing a scheme, device or artifice to defraud or mislead borrowers or lenders or to defraud any person, in violation of Section 36a-498e(1) of the Connecticut General Statutes, and (2) engaging in an unfair or deceptive practice, in violation of Section 36a-498e(2) of the Connecticut General Statutes.  Such violations constitute sufficient grounds to revoke REF Mortgage Capital’s mortgage broker license in Connecticut pursuant to Sections 36a-494(a)(1)(B) and 36a-494(a)(1)(C) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist pursuant to subdivisions (1) and (3) of Section 36a-494(b) and Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to subdivisions (1) and (3) of Section 36a-494(b) 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 REF Mortgage Capital in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
2.
REF Mortgage Capital’s alteration of loan file documents, through Fiala, as more fully described in paragraph 10 the Matters Asserted, constitutes (1) employing a device, scheme or artifice to defraud, in violation of Section 36a-53b(1) of the Connecticut General Statutes, and (2) engaging in an act, practice or course of business which operates or would operate as a fraud or deceit upon any person, in violation of Section 36a-53b(3) of the Connecticut General Statutes.  Such violations constitute sufficient grounds to revoke REF Mortgage Capital’s mortgage broker license in Connecticut pursuant to Sections 36a-494(a)(1)(B) and 36a-494(a)(1)(C) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist pursuant to Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty 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 REF Mortgage Capital in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
3. Fiala’s alteration of loan file documents, as more fully described in paragraph 10 of the Matters Asserted, constitutes (1) directly or indirectly employing a scheme, device or artifice to defraud or mislead borrowers or lenders or to defraud any person, in violation of Section 36a-498e(1) of the Connecticut General Statutes, and (2) engaging in an unfair or deceptive practice, in violation of Section 36a-498e(2) of the Connecticut General Statutes.  Such violations constitute sufficient grounds to revoke Fiala’s mortgage loan originator license in Connecticut pursuant to Section 36a-494(a)(2) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist pursuant to subdivisions (1), (2) and (3) of Section 36a-494(b) and Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to subdivisions (1), (2) and (3) of Section 36a-494(b) 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 Fiala in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
4. Fiala’s alteration of loan file documents, as more fully described in paragraph 10 of the Matters Asserted, constitutes (1) employing a scheme, device or artifice to defraud, in violation of Section 36a-53b(1) of the Connecticut General Statutes, and (2) engaging in an act, practice or course of business which operates or would operate as a fraud or deceit upon any person, in violation of Section 36a-53b(3) of the Connecticut General Statutes.  Such violations constitute sufficient grounds to revoke Fiala’s mortgage loan originator license in Connecticut pursuant to Section 36a-494(a)(2) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist pursuant to Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty 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 Fiala in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
5. REF Mortgage Capital’s conduct, through Fiala, as more fully described in paragraphs 3 through 10, inclusive, of the Matters Asserted, renders the Commissioner unable to continue to find that REF Mortgage Capital, its control person and the qualified individual having supervisory authority demonstrate the character and general fitness such as to command the confidence of the community and to warrant a determination that REF Mortgage Capital will operate honestly, fairly and efficiently within the purposes of Sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b of the Connecticut General Statutes.  Such failure would be sufficient grounds for the Commissioner to deny an application for a mortgage broker license pursuant to Section 36a-489(a)(1)(C) of the Connecticut General Statutes, and would be sufficient grounds for the Commissioner to revoke REF Mortgage Capital’s mortgage broker license in Connecticut pursuant to Section 36a-494(a)(1) and subsections (a) and (b) of Section 36a-51 of the of the Connecticut General Statutes.
6.
Fiala’s conduct, as more fully described in paragraphs 3 through 10, inclusive, of the Matters Asserted, renders the Commissioner unable to continue to find that Fiala demonstrates character and general fitness so as to command the confidence of the community and to warrant a determination that Fiala will operate honestly, fairly and efficiently within the purposes of Sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b of the Connecticut General Statutes.  Such failure would be sufficient grounds for the Commissioner to deny an application for a mortgage loan originator license pursuant to Section 36a-489(b)(1)(C) of the Connecticut General Statutes, and would be sufficient grounds for the Commissioner to revoke Fiala’s mortgage loan originator license in Connecticut pursuant to Section 36a-494(a)(2) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes.
 

IV.  FINDINGS AND STATUTORY BASIS FOR TEMPORARY ORDER
TO CEASE AND DESIST AND ORDER OF SUMMARY SUSPENSION

The Commissioner finds that public safety and welfare imperatively require emergency action to summarily suspend REF Mortgage Capital’s mortgage broker license in Connecticut and to summarily suspend Fiala’s mortgage loan originator license in Connecticut under Sections 36a-51(a) and 4-182(c) of the Connecticut General Statutes and finds that public welfare requires immediate action to issue a temporary order requiring Respondents to cease and desist from violating the laws cited herein, pursuant to Section 36a-52(b) of the Connecticut General Statutes, in that Respondents’ (1) altering borrowers’ signatures by physically or digitally cutting them from one document and taping or digitally pasting them onto other documents to make document copies appear as originals or that the borrowers had signed or executed documents when they had not; and (2) altering dates on documents with correction fluid or tape to make it appear as though mortgage-related documents had been timely given to borrowers when they had not, or inserting dates onto documents submitted to them from borrowers that had no dates constitutes a basis for the Commissioner to be unable to continue to find that Respondents are demonstrating character and general fitness so as to command the confidence of the community and to warrant a determination that Respondents will operate honestly, fairly and efficiently within the purposes of Sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b of the Connecticut General Statutes.


V.  TEMPORARY ORDER TO CEASE AND DESIST, ORDER OF SUMMARY
SUSPENSION, NOTICE OF INTENT TO REVOKE MORTGAGE BROKER LICENSE,
NOTICE OF INTENT TO REVOKE MORTGAGE LOAN ORIGINATOR LICENSE,
NOTICE OF INTENT TO ISSUE ORDER TO CEASE AND DESIST, AND NOTICE OF
INTENT TO IMPOSE CIVIL PENALTY AND NOTICE OF RIGHT TO HEARING

WHEREAS, the Commissioner has reason to believe that REF Mortgage Capital has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke REF Mortgage Capital’s mortgage broker license in Connecticut pursuant to Sections 36a-494(a)(1), 36a-494(a)(1)(B), 36a-494(a)(1)(C) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist against REF Mortgage Capital pursuant to Sections 36a-494(b)(1), 36a-494(b)(3) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty upon REF Mortgage Capital pursuant to Sections 36a-494(b)(1), 36a-494(b)(3) and 36a-50(a) of the Connecticut General Statutes;
 
WHEREAS, the Commissioner has reason to believe that Fiala has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke Fiala’s mortgage loan originator license in Connecticut pursuant to Section 36a-494(a)(2) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist against Fiala pursuant to Sections 36a-494(b)(1), 36a-494(b)(2), 36a-494(b)(3) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty upon Fiala pursuant to Sections 36a-494(b)(1), 36a-494(b)(2), 36a-494(b)(3) and 36a-50(a) of the Connecticut General Statutes;
 
AND WHEREAS, the Commissioner has made the findings required under Sections 36a-52(b), 36a-51(a) and 4-182(c) of the Connecticut General Statutes.
 
THE COMMISSIONER THEREFORE ORDERS, pursuant to the authority granted in Section 36a-52(b) of the Connecticut General Statutes, that REF Mortgage Capital Inc immediately CEASE AND DESIST from further violations of Sections 36a-498e(1), 36a-498e(2), 36a-53b(1) and 36a-53b(3) of the Connecticut General Statutes.  This Temporary Order to Cease and Desist shall become effective upon receipt by REF Mortgage Capital Inc, and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order to Cease and Desist.
 
THE COMMISSIONER FURTHER ORDERS, pursuant to the authority granted in Section 36a-52(b) of the Connecticut General Statutes, that Robert Ernest Fiala immediately CEASE AND DESIST from further violations of Sections 36a-498e(1), 36a-498e(2), 36a-53b(1) and 36a-53b(3) of the Connecticut General Statutes.  This Temporary Order to Cease and Desist shall become effective upon receipt by Robert Ernest Fiala and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order to Cease and Desist.
 
THE COMMISSIONER FURTHER ORDERS, pursuant to Sections 36a-17(a) and 36a-52(b) of the Connecticut General Statutes, that:  Not later than fourteen (14) days from receipt of this Order of Summary Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Mortgage Broker License, Notice of Intent to Revoke Mortgage Loan Originator License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing, REF Mortgage Capital Inc shall provide to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov:

1.
Complete loan documents for all loans originated between January 20, 2016 to the present, specifically including those currently pending or in the pipeline; and
2.
All monthly bank statements for any accounts owned, operated or controlled by REF Mortgage Capital Inc from January 20, 2016 to the date of this Temporary Order to Cease and Desist.

THE COMMISSIONER FURTHER ORDERS, pursuant to the authority granted in Sections 36a-51(a) and 4-182(c) of the Connecticut General Statutes, that the license of REF Mortgage Capital Inc (NMLS # 1424304) to act as a mortgage broker in Connecticut be and is hereby SUMMARILY SUSPENDED pending proceedings for revocation.
 
THE COMMISSIONER FURTHER ORDERS, pursuant to the authority granted in Sections 36a-51(a) and 4-182(c) of the Connecticut General Statutes, that the license of Robert Ernest Fiala (NMLS # 70963) to engage in the business of a mortgage loan originator in Connecticut be and is hereby SUMMARILY SUSPENDED pending proceedings for revocation.
 
FURTHER, notice is hereby given to REF Mortgage Capital that the Commissioner intends to REVOKE REF Mortgage Capital’s license to act as a mortgage broker in Connecticut, issue an order requiring REF Mortgage Capital to CEASE AND DESIST from violating Sections 36a-498e(1), 36a-498e(2), 36a-53b(1) and 36a-53b(3) of the Connecticut General Statutes, and impose a CIVIL PENALTY upon REF Mortgage Capital as set forth herein, subject to REF Mortgage Capital’s right to a hearing on the allegations set forth above.
 
FURTHER, notice is hereby given to Fiala that the Commissioner intends to issue an order to REVOKE Fiala’s license to engage in the business of a mortgage loan originator in Connecticut, issue an order requiring Fiala to CEASE AND DESIST from violating Sections 36a-498e(1), 36a-498e(2), 36a-53b(1) and 36a-53b(3) of the Connecticut General Statutes, and impose a CIVIL PENALTY upon Fiala as set forth herein, subject to Fiala’s right to a hearing on the allegations set forth above.
 
A hearing will be granted to each 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 each Respondent’s receipt of this Order of Summary Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Mortgage Broker License, Notice of Intent to Revoke Mortgage Loan Originator License, 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 subsections (a) and (b) of Section 36a-51 and Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes.  This Order of Summary Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Mortgage Broker License, Notice of Intent to Revoke Mortgage Loan Originator License, 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.  To request a hearing, complete and return the enclosed Appearance and Request for Hearing Form to the above address.  If any 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 a 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 presiding 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 October 19, 2017, 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 any Respondent fails to appear at the requested hearing.  At such hearing, Respondents 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 REF Mortgage Capital does not request a hearing within the time prescribed or fails to appear at any such hearing, the allegations herein will be deemed admitted.  Accordingly, the Commissioner will issue an order revoking REF Mortgage Capital’s license to act as a mortgage broker in Connecticut and issue an order that REF Mortgage Capital cease and desist from violating Sections 36a-498e(1), 36a-498e(2), 36a-53b(1) and 36a-53b(3) of the Connecticut General Statutes, and may order a civil penalty not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon REF Mortgage Capital.
 
If Fiala does not request a hearing within the time prescribed or fails to appear at any such hearing, the allegations herein will be deemed admitted.  Accordingly, the Commissioner will issue an order revoking Fiala’s license to engage in the business of a mortgage loan originator in Connecticut, will issue an order that Fiala cease and desist from violating Sections 36a-498e(1), 36a-498e(2), 36a-53b(1) and 36a-53b(2) of the Connecticut General Statutes, and may order a civil penalty not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Fiala.


So ordered at Hartford, Connecticut
this 28th of August 2017.                             ________/s/_________
                                                               Jorge L. Perez
                                                               Banking Commissioner

 

CERTIFICATION

I hereby certify that on this 29th day of August 2017, I caused to be mailed by certified mail, return receipt requested, the foregoing Order of Summary Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Mortgage Broker License, Notice of Intent to Revoke Mortgage Loan Originator License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing to REF Mortgage Capital Inc, Attention:  Robert Fiala, President, 112 Southbury Road, Roxbury, Connecticut 06783, certified mail no. 70162070000104623054; and to Robert Ernest Fiala, P.O. Box 45, Roxbury, Connecticut 06783-0045, certified mail no. 70162070000104623061.

________/s/_________
 Amy B. Grillo
 Secretary


Administrative Orders and Settlements