DOB: Siwell, Inc - NOI CD-CP

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IN THE MATTER OF:

SIWELL, INC. d/b/a
CAPITAL MORTGAGE
SERVICES OF TEXAS
NMLS # 149169

     ("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-534b, 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(a) of the Connecticut General Statutes provides, in pertinent part, that:

The commissioner, in the commissioner’s discretion, may, subject to the provisions of section 36a-21 and the Freedom of Information Act, as defined in section 1-200, (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 . . . .

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 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 . . . or order, 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 Texas corporation with an office at 4212 50th Street, Lubbock, Texas (“Main Office”).
2. Respondent was licensed by the Commissioner through the Nationwide Multistate Licensing System and Registry (“NMLS”) to act as a mortgage lender in Connecticut from its Main Office for the January 1 to December 31, 2016 licensing period, and is presently so licensed for the January 1 to December 31, 2017 licensing period.
3. On October 17, 2016, the Commissioner issued a Consent Order against Respondent.  The Consent Order resolved a Notice of Intent Not to Renew Mortgage Lender License and Notice of Right to Hearing issued on March 22, 2016 (“Notice”) and resolved certain additional allegations set forth in the Consent Order.  The Consent Order and the Notice are incorporated herein by reference.
4.
Through the Consent Order, Respondent voluntarily agreed to consent to the entry of certain sanctions without admitting or denying any allegation contained in the Notice or the additional allegations set forth in the Consent Order.
5.
Among other sanctions, the Consent Order imposed the following on Respondent:
In connection with any subsequent license it seeks to obtain or obtains from the Commissioner that requires either a QI or a branch manager (“BM”), Capital Mortgage Services shall be required, from the date this Consent Order is executed by the Commissioner until December 31, 2019, to:  (a) respond to any inquiry from the Department about such QI or BM within fifteen (15) business days from the date of such inquiry, whether the inquiry is made by e-mail, by deficiency posted to NMLS, or in other written form; (b) notify the Commissioner on NMLS within ten (10) business days of any change to the designated QI or BM; and (c) in the event of a change to the QI or BM, designate a qualified replacement on NMLS within thirty (30) calendar days from the date of the notification required in item (b) above.  In the event that the law governing notice requirements relating to QIs and BMs is amended during the period of time contemplated by this paragraph to include requirements that are more stringent than the requirements imposed on Capital Mortgage Services by this paragraph, Capital Mortgage Services shall be bound by those requirements and shall be deemed to be in compliance with this provision if it is in compliance with more stringent requirements imposed by law.
6. On May 9, 2017, Respondent removed sponsorship of its qualified individual (“QI”) for Connecticut on NMLS.
7.
On May 12, 2017, the Division posted a deficiency to Respondent’s NMLS account that provided:
On 5/9/2017, the company removed the sponsorship for the company’s CT qualifying individual. . . .  1. By 6/2/2017, please (a) update the MU1 form to reflect the removal of the qualifying individual and (b) provide documentation by email to Allison.ryan@ct.gov which confirms the date that the qualifying individual was no longer serving in the capacity of the qualifying individual for CT.  2. By 6/8/2017: please (a) update the MU1 form to recognize a new CT qualifying individual; (b) upload a work experience form to that individual’s MU2 form; and (c) submit an MLO application for that individual, if applicable.
8. On May 23, 2017, Respondent updated its MU1 form on NMLS to reflect the removal of the QI.  No new QI was designated at that time.
9. On May 31, 2017, Respondent e-mailed the Division confirming that the relationship between Respondent and the QI ended effective May 8, 2017, and that “the MU1 filing dated 5/23/2017 removed her as the QI.”
10. Respondent’s email described in paragraph 9 above also stated:  “We will have a new QI in place, who has a CT license and upload the information into NMLS by 6/8/2017.”
11. To date, Respondent has not updated its MU1 form on NMLS to designate a new QI or submitted any of the other information requested by item 2 in the deficiency set forth in paragraph 7, above.
12.
The Consent Order described in paragraph 3 above provided:
Upon issuance of this Consent Order by the Commissioner, this matter will be resolved and the Commissioner will not take any future enforcement action against Capital Mortgage Services based upon the allegations set forth in the Notice and contained herein; provided that issuance of this Consent Order is without prejudice to the right of the Commissioner to take enforcement action against Capital Mortgage Services based upon a violation of this Consent Order or the matters underlying its entry, if the Commissioner determines that compliance with the terms herein is not being observed or if any representation made by Capital Mortgage Services and reflected herein is subsequently discovered to be untrue . . . .

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

Respondent’s failure to designate a new QI, as more fully described in paragraphs 6 to 11, inclusive, of the Matters Asserted, constitutes a violation of an order of the Commissioner, as more fully described in paragraphs 3 to 5, inclusive, of the Matters Asserted.  Such violation forms the 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 Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.


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 forms the 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 upon Respondent pursuant to 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 an order of the Commissioner, and that the Commissioner intends to impose a CIVIL PENALTY upon Respondent as set forth herein, subject to Respondent’s right to a hearing on the allegation 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.  To request a hearing, complete and return the enclosed Appearance and Request for Hearing Form 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 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 24, 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 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 or fails to appear at any such hearing, the allegation herein will be deemed admitted.  Accordingly, the Commissioner will issue an order that Respondent cease and desist from violating an order of the Commissioner and may order that the maximum civil penalty be imposed upon Respondent.

Dated at Hartford, Connecticut
this 7th day of September 2017.           ________/s/_________
                                                      Jorge L. Perez
                                                      Banking Commissioner



Administrative Orders and Settlements