STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
B & B MORTGAGE EQUITY, INC., ) and BARRY YANKS, )
)
Petitioners, )
)
vs. ) CASE NO. 90-4722
)
DEPARTMENT OF BANKING AND ) FINANCE, DIVISION OF FINANCE, )
)
Respondent. )
) DEPARTMENT OF BANKING AND ) FINANCE, DIVISION OF FINANCE, )
)
Petitioner, )
)
vs. ) CASE NO. 90-6577
) B & B MORTGAGE INVESTORS, INC.; ) B & B EQUITY, INC.; BARRY YANKS, )
individually and as principal ) mortgage broker of B & B Mortgage ) Investors, Inc.; and ANA )
HERNANDEZ-YANKS, )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was held in this case on April 29 through May 1, 1992, in Miami, Florida, before J. Stephen Menton, a duly designated Hearing Officer of the Division of Administrative Hearings.
APPEARANCES
For Petitioner: Paul C. Stadler
Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399
For Respondent: George J. Lott, Esquire
5975 Sunset Drive, Suite 302
Miami, Florida 33143
STATEMENT OF THE ISSUES
The issue in Case No. 90-4722 was whether B & B Mortgage Equity, Inc. was entitled to licensure as a mortgage broker in the State of Florida. As discussed in more detail below, B & B Mortgage Equity subsequently withdrew its application for licensure and that case is now moot. The issue in Case No. 90- 6577 is whether Respondents committed the offenses alleged in the Amended Administrative Complaint filed in that case, and, if so, what disciplinary action should be imposed.
PRELIMINARY STATEMENT
In a letter dated June 4, 1990, the Department of Banking and Finance (the "Department") denied an application for registration as a mortgage brokerage business filed by Barry Yanks on behalf of B & B Mortgage Equity, Inc. The denial was based upon the Department's determination that the designated principal mortgage broker for the business, Barry Yanks, had violated Section 494.055(1), Florida Statutes, which prohibits fraud, misrepresentation, deceit, negligence or incompetence in any mortgage financing transaction. Barry Yanks filed a Petition for Formal Proceeding contesting the denial of the application. The case was referred to the Division of Administrative Hearings pursuant to Section 120.57, Florida Statutes, where it was assigned Case No. 90-4722 (the "Application Case").
On August 30, 1990, the Department filed an Administrative Complaint for a Cease and Desist Order, an Order of Refund, and for the Imposition of One or More Administrative Penalties and Notice of Rights (the "Administrative Complaint") against B & B Mortgage Investors, Inc. ("B & B Investors"), B & B Mortgage Equity, Inc. ("B & B Equity"), Barry Yanks ("Yanks") and Ana Hernandez- Yanks ("Hernandez-Yanks") (collectively referred to as Respondents).
Respondents filed an Answer to the Administrative Complaint and requested an administrative hearing on the charges. The case was transmitted to the Division of Administrative Hearings pursuant to Section 120.57, Florida Statutes, where it was assigned Case No. 90-6577 (hereinafter referred to as the "Violations Case").
Both cases were assigned to Hearing Officer Michael Parrish, who entered an Order of Consolidation on November 28, 1990. On September 13, 1990, the Department filed a Motion to Amend. That Motion sought to amend the grounds for denial in the Application Case to reflect the same allegations contained in the Violations Case. That Motion was granted by Hearing Officer Michael Parrish in an Order dated September 20, 1991.
Based on the unavailability of certain witnesses and bankruptcy proceedings involving two of the Respondents in the Violations Case, the hearing in this matter was continued several times. On October 5, 1990, a Motion to Dismiss or Abate was filed in the Violations Case on behalf of Hernandez-Yanks. That Motion alleged that Hernandez-Yanks filed a Petition for Relief under the U.S. Bankruptcy Code on March 15, 1990. The Motion also pointed out that Hernandez- Yanks was not licensed pursuant to Chapter 494, Florida Statutes. In the Administrative Complaint, the Department acknowledged the filing of the bankruptcy petition by Hernandez-Yanks as well as the filing of a separate petition for bankruptcy by B & B Investors. The Department argued that, notwithstanding the filing of the bankruptcy petitions, a government agency can still take action against a license held by a person or entity in bankruptcy and can still enter orders necessary to protect the public and assess fines which are nondischargable, provided that the agency makes no attempt to collect such
fines. Title 11 U.S.C. Section 362(b)(4) specifically recognizes that the automatic stay provisions of the Bankruptcy Code do not apply to "the commencement or continuation of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power...." Hearing Officer Parrish entered an Order Denying Motion to Dismiss or Abate on November 28, 1990. See, Board of Governors of The Federal Reserve System v. Mcorp.
Financial, Inc., 112 S.C. 459 (1991).
At the commencement of the hearing in these cases, counsel for Respondents took exception to Hearing Officer Parrish's prior Order Denying Motion to Dismiss or Abate and further argued that, since Hernandez-Yanks was a member of the Florida Bar, only the Bar could appropriately discipline her for her professional activities. Hernandez-Yanks did not appear at the hearing. The legal issues regarding the Department's authority to take action against Hernandez-Yanks are addressed in more detail in the Conclusions of Law below.
At the hearing, the parties were allowed to present all of the factual evidence relevant to the both the Violations Case and the Application Case.
On April 6, 1992, the Department filed a Second Motion to Amend. That Motion sought to amend the Administrative Complaint in the Violations Case and the Amended Notice of Intent in the Application Case to conform to the discovery that had taken place in the proceedings. By Order dated April 22, 1992, the Motion to Amend was granted.
The Amended Administrative Complaint contained 15 counts, however Count 15 was related to the Application Case. The allegations in the Amended Administrative Complaint arose from two separate transactions which are described in more detail in the Findings of Fact below.
In the April 22, 1992 Order, Hearing Officer Parrish also granted a Motion for Official Recognition which had been submitted by the Department on April 6, 1992 regarding a Final Order entered in a prior case. The Department also filed a Request for Official Notice on January 9, 1992 regarding certain rules of the Department. No ruling on that request was ever entered. That request is hereby granted.
The consolidated cases were ultimately rescheduled for hearing on April 29 through May 1, 1992. Prior to the hearing, the cases were transferred to the undersigned Hearing Officer who conducted the hearing as scheduled.
At the hearing, the Department presented the testimony of seven witnesses: John Thornton, a senior vice president with Ticor Title Insurance Company; Ana Vazquez; Marie Hall; Reverend Philip Hall; Robert Crespo, an investigator employed by the Department; Yolanda Lewis, a financial examiner employed by the Department; and Jan Hutchersion, a financial examiner analyst employed by the Department.
The Department had 35 exhibits marked for identification. The Department's Exhibits 1-32 and 35 were admitted into evidence. Ruling on the Department's exhibits 33 and 34 was reserved. The Department's Exhibit 33 was a deposition of Barry Yanks taken in a related circuit court proceeding. The Department's Exhibit 34 was a deposition of Ana Hernandez-Yanks. As discussed above, Hernandez-Yanks filed a Petition for Relief in federal bankruptcy court and did not appear at the hearing. The parties were given an opportunity to address the admissibility of these depositions in their proposed recommended orders. After
considering the arguments made by the parties at the hearing and in their Proposed Recommended Orders, the depositions are accepted in accordance with the provisions of Section 90.803(18) and 120.58(1), Florida Statutes.
Respondent Barry Yanks testified on behalf of Respondents, who also called the Reverend Frank Lloyd and Salvador Busquets to testify. Respondents had 15 exhibits marked for identification, all of which were accepted except Respondent's Exhibit 14. Respondent's Exhibit 14 was a letter dated May 19, 1989. The letter was never properly authenticated at the hearing and was not accepted into evidence. During the course of the hearing, one of the witnesses utilized the letter to refresh his recollection. Counsel for Respondents indicated during the hearing that the letter would be authenticated through the deposition of the author of the letter. Respondents were granted an opportunity at the conclusion of the hearing to supplement the record with proper authentication of Respondent's Exhibit 14. As of the date of this Recommended Order, no such documentation has been submitted. Consequently, Respondent's Exhibit 14 is rejected.
At the conclusion of the hearing, the parties agreed that proposed recommended orders should be filed within 30 days of the filing of the transcript of the proceedings. The parties subsequently requested a delay in submitting the transcript in order to allow them an opportunity to explore settlement possibilities. On July 15, 1992, the Department filed a Notice of Filing Transcript of Administrative Hearing. That Notice states that the parties were unable to reach a settlement. The Department subsequently filed a proposed recommended order in accordance with the schedule agreed to at the conclusion of the hearing. Respondents filed several motions for extensions of time for filing a proposed recommended order. Those extensions were granted with the proviso that the Department would have an opportunity to file a response to Respondents' proposed recommended order.
Respondents filed a Notice of Voluntary Dismissal with respect to the Application Case on November 9, 1992. Respondents' Notice of Voluntary Dismissal was mistakenly filed in both cases and both files were erroneously closed. It was subsequently determined that the Violations Case should not have been dismissed and this Recommended Order was prepared to reflect the recommended disposition of both cases. No conclusions are reached herein as to the legal issues raised in the Application Case.
Both parties have submitted proposed findings of fact. A ruling on each of the parties' proposed findings of fact is included in the Appendix to this Recommended Order.
FINDINGS OF FACT
At all times pertinent hereto, B & B Investors was registered with the Department as a mortgage broker pursuant to Chapter 494, Florida Statutes. Until June 15, 1990, the business address for B & B Investors was 1481 N.W. 7th Street #1, Miami, Florida 33125. B & B Investors' registration number is HB 592369518.
On or about July 5, 1990, B & B Investors filed a petition for relief under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Florida, Case No. 9090-14587-SMW.
Yanks was the president and principal mortgage broker for B & B Investors until May 10, 1989. Yanks is a licensed mortgage broker in Florida having been issued license number was 262788177. He has been licensed since 1980 or 1981. There is no evidence of any prior disciplinary action against him or B & B Investors.
At all times pertinent hereto, Yanks was also the President of B & B Equity. B & B Equity has never been registered pursuant to Chapter 494, Florida Statutes. Until June 15, 1990, the business address for B & B Equity was also 1481 N.W. 7th Street #1, Miami, Florida 33125.
At all times pertinent hereto, Hernandez-Yanks was married to Yanks and was the Vice President and Secretary of B & B Equity. Hernandez-Yanks is an attorney, but she has never been licensed pursuant to Chapter 494, Florida Statutes. On or about March 15, 1990, Hernandez-Yanks filed a Petition for Relief under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Florida, Case No. 90-11654-BKC-AJC.
On or about January 1, 1990, B & B Equity filed an Application for Registration as a Mortgage Brokerage Business (the "Registration Application"). Paragraph 6 of the Registration Application stated in part:
List all officers, directors, partners,
joint-ventures, and ultimate equitable owners. Ultimate equitable owner means natural person who owns 10 percent or more of applicant.
NAME ADDRESS TITLE
Barry Yanks 1481 NW 7 St. Pres. Ana Hernandez-Yanks 1481 NW 7 St. VP/Scty
Yanks was designated as the principal mortgage broker on the Registration Application. The Department denied the Registration Application by notice dated June 4, 1990.
CALVARY CHAPEL TRANSACTION
At the time of the hearing in this matter, Marie Hall was 66 years old. She was last employed in 1988 by the Broward County School System as an adult vocational education instructor teaching students how to operate sewing machines. Her husband, the late Reverend Arthur Hall, died on March 22, 1988, at the age of 75. Because of health problems, he had been unable to work since 1962. The late Reverend Hall had very little education. Prior to the transactions involved in this case, the only other real estate deal in which the late Reverend and Mrs. Hall had been involved was the purchase of their home many years ago.
In the summer of 1987, the late Reverend and Mrs. Hall sought to purchase Mount Bethel Baptist Church (the "Church"). To assist in their effort to purchase the Church, the Halls contacted Reverend Frank Lloyd. Reverend Frank Lloyd was the pastor of Hope Outreach, Church of God in Christ and the Chairman of the State of Florida Prison Ministry. Reverend Lloyd was also engaged in a consulting business through a company called Professional Proposal and Financial Consultants, Inc. ("PPFC").
In the summer of 1987, the Halls entered into an agreement with PPFC pursuant to which they paid PPFC $800 for PPFC's assistance in securing a loan of $250,000 to purchase the church. The agreement called for an interest rate of approximately 11 3/4 percent.
The Halls deposited a total of $15,000 in escrow with Reverend Lloyd and/or PPFC. At the time the first $10,000 was deposited with PPFC, the parties entered into an agreement which provided as follows:
...This money is not to be used for down payment, or services rendered. It is to be escrowed only. At the closing of the loan this entire amount is to be returned to Elder Hall or his designate. If in the event no loan is secure [sic] all funds is [sic] to be returned to Elder Arthur Hall, President Calvary Chapel Church of God in Christ or his designate.
Reverend Lloyd attempted to obtain a mortgage for the Halls from several companies including Ft. Lauderdale Mortgage and Horizon Development Mortgage ("Horizon"). The Halls decided not to pursue a loan from Horizon because Horizon wanted a non-refundable $3,000 up-front fee. There was also some question whether either company would handle a loan for a church.
Reverend Lloyd introduced the late Reverend and Mrs. Hall to Yanks because Reverend Lloyd knew that Yanks had successfully obtained loans for other churches.
The Halls met with Yanks on a couple of occasions in late 1987 and early 1988. Other members of the Hall's congregation attended some of these meetings. During those meetings, the need for some of the other church members to sign on the loan and/or pledge additional collateral was discussed. Yanks advised the late Reverend and Mrs. Hall that he might be able to secure a loan for them to purchase the Church, but the amount of the loan would be smaller and the interest rate would be higher than they had anticipated in their agreement with PPFC. Yanks did not require an up-front loan application fee.
On January 14, 1988, the late Reverend and Mrs. Hall met with Reverend Lloyd and Yanks at the office of B & B Investors in Miami. As noted above, the Halls were initially seeking a loan of $250,000. During the January 14, 1988 meeting, Yanks advised the representatives of Calvary Chapel that he could arrange a loan of $162,000 at 17 percent if additional collateral was provided.
At the January 14 meeting, the late Reverend and Mrs. Hall executed a mortgage loan application (the "Loan Application") with B & B Investors. The Halls executed the Loan Application on behalf of Calvary Chapel Church of God in Christ, Inc. (hereinafter Calvary Chapel). Yanks executed the Loan Application on behalf of B & B Investors.
The Loan Application was for a $162,000 loan and stated that the loan origination fee would be $4,860.00 and the loan discount fee would be $4,860.00. The Loan Application did not indicate when those fees would be due or to whom they would be paid. The Loan Application noted that there would be an appraisal fee of $600.00 and attorneys' fees of $750.00.
The evidence established that, in the mortgage brokerage business, a loan origination fee is often considered synonymous with a broker's fee. The origination fee is traditionally charged at closing. However, the agreement between a mortgage broker and a client determines when the mortgage broker is entitled to his fee. In certain circumstances, a mortgage broker may be entitled to payment upon obtaining a firm commitment for a loan irrespective of whether the loan closes.
Although there was no statutory or rule requirement at the time of this transaction, it was customary in the industry for a mortgage broker to set forth in writing the terms as to when he is to be paid. The Application in this case did not state when the fees were to be considered as earned.
The Loan Application also provided in part:
If the above commitment or a commitment in an amount and/or upon terms acceptable to
the undersigned is obtained and said mortgage loan is not closed because (I)(We) have not fulfilled our part of this agreement. (I)(We) agree to pay $ , the application deposit being a part, for obtaining said commitment.
If an acceptable commitment is not obtained, the mortgage application deposit will be refunded, except $ to cover expenses actually incurred.
A loan discount fee is the cost to the lender to discount the interest rate on a mortgage loan for sale in the secondary market. The discount fee is owed to the lender or investor and was collected at closing. A broker is not entitled to a loan discount fee.
Yanks tries to ignore the terminology used in the Loan Application he prepared and claims that all parties knew that he and/or B & B Investors would receive both the loan origination fee and loan discount fee. He contends that he explained to the late Rev. Hall and Mrs. Hall that the loan origination fee and the loan discount fees were fees that would be paid to him when he arranged a firm commitment for a loan at the agreed upon terms. However, the more persuasive evidence established that the late Rev. Hall and Mrs. Hall did not understand that the loan origination fee and/or discount fee would be paid to Yanks irrespective of whether the loan actually closed. Moreover, Yanks has provided no credible explanation as to why he would ever be entitled to receive the loan discount fee.
At the January 14, 1988 meeting, Yanks orally arranged a deal with Alan Greenwald, a private investor with whom Yanks had worked in the past, to fund a $162,000 loan at 17 percent. At the time of this transaction, there was no statutory requirement that loan commitments be made in writing. No written confirmation of the commitment was provided even though it was common in the industry for commitments to be given in writing in order to bind the lender to the transaction and to provide evidence of the terms of the commitment.
The only written evidence of the loan commitment is a letter from Yanks to the attorney for Alan Greenwald. That letter states that Mr. Greenwald had asked for additional collateral. During the January 14, 1988 meeting, the late Rev. and Mrs. Hall agreed to put up their house as additional collateral. In addition, two other members of the congregation who were present at the
meeting, Effie Davis and Cleveland Foreman, agreed in principal to permit a mortgage to be placed on their houses as additional collateral to secure the loan.
Yanks contends that, as a result of his efforts in securing a commitment from Alan Greenwald as noted above, he was entitled to receive the loan origination fee and loan discount fee set forth in the Loan Application. After the January 14, 1988 meeting, Rev. Lloyd released to Yanks $10,000 of the
$15,000 that he had been holding in escrow for the late Rev. and Mrs. Hall. The
$10,000 check was made payable to B & B Investors. The $10,000 was not placed in an escrow or trust account upon receipt. Yanks apparently arranged for
$1,000 of the money to be paid to Debbie Landsberg, the attorney for Alan Greenwald, as an advance on the legal fees and costs that were expected to be incurred in closing the transaction.
At the time the $10,000 was transferred to B & B Investors, all of the parties to the transaction expected the loan to close and no one contemplated or anticipated that the loan would not go through. While both Yanks and Rev. Lloyd claim that the late Rev. Hall approved the release of the $10,000 as payment to Yanks for services in securing a commitment from Alan Greenwald, this testimony is rejected as not credible. The more persuasive evidence clearly established that at no time did the late Rev. and Mrs. Hall understand that if the loan did not close Yanks would keep the $10,000.
After the January 14, 1988 meeting, the parties initiated the steps necessary to close the deal. These efforts were complicated by the illness of the attorney for the seller, the marriage of the attorney for the lender and the difficulty in locating the abstracts for the properties involved. Moreover, a number of title deficiencies regarding the Church were discovered and had to be corrected.
The arrangements for financing the purchase of the Church changed several times. Initially, the Seller had indicated that it would take back a second mortgage for $50,000 in order to facilitate a closing. However, as the parties got closer to closing, the Seller changed its mind regarding the second mortgage. Ultimately, in September of 1988, the Seller agreed to take back a second mortgage of $35,000.
Sometime during the summer of 1988, Greenwald reduced to $110,000 the amount he was willing to lend on the deal. That amount was to be secured solely by the Church property. Yanks claims that he arranged for another investor to lend between $40,000 to $45,000 with the residences of certain congregation members, including the Halls, Effie Davis and Cleveland Foreman, serving as collateral. These modifications were never memorialized in writing.
As preparations for a closing proceeded, it became apparent that Effie Davis' house could not be used as security for the loan. While there is conflicting evidence as to why Effie Davis' house could not be used for additional collateral, the more persuasive evidence indicates that the presence of one or more existing liens on the property rendered it of minimal value as additional collateral.
As a result of the inability to use Ms. Davis' house as part of the collateral for the loan, Yanks advised Calvary Chapel that the amount of the loan would have to be decreased from $162,000 to $150,000. Yanks also advised Calvary Chapel that an additional cash deposit of $14,000 was necessary to demonstrate to the lender that sufficient funds were available to conclude the
deal. The additional money was paid in two parts. On or about August 23, 1988, Calvary Chapel paid $10,000 to the Ana-Hernandez-Yanks Trust Account. Shortly thereafter, on or about September 1, 1988, Calvary Chapel paid an additional
$4,000 to the Ana Hernandez-Yanks Trust Account. These sums were received by Ana Hernandez-Yanks in trust as the attorney for the B & B Investors. No written escrow agreement was executed.
No written amendment to the Loan Application was provided to reflect the new terms for the anticipated loan nor was there any written commitment letter.
As noted above, the late Rev. Hall died in March of 1988. Reverend Phillip Hall, the son of the late Rev. Hall, was appointed the pastor of Calvary Chapel in April of 1988. At the time of his appointment, Rev. Phillip Hall was living in Nashville. He commuted between Nashville and Fort Lauderdale for a while before moving to Fort Lauderdale on July 31, 1988.
Yanks suggests that the Reverend Philip Hall did not like the deal his parents had entered into and refused to honor it. More specifically, Yanks contends that Calvary Chapel and the seller made alternate arrangements for the sale of the property in order to avoid paying him. The evidence does not support such a conclusion.
The Seller was obligated to provide clear title before the sale could close. The evidence established that the Seller was never able to provide all of the documents necessary to clear title. There is no persuasive evidence that Calvary Chapel failed to meet its obligations under the contract to purchase the Church. Instead, it appears that Calvary Chapel did everything in its power to go through with the transaction.
Sometime in the fall of 1988, the seller, Mount Bethel Baptist Church, rescinded the contract to sell the Church. At some point thereafter, Calvary Chapel began occupying the Church under a lease/purchase arrangement, the terms of which have not been established in this case.
As noted above, there is no persuasive evidence that the Rev. Phillip Hall and/or Calvary Chapel conspired to cheat Yanks out of his fees. In any event, even if Calvary Chapel decided for economic reasons not to go forward with the loan that Yanks was trying to arrange, it is concluded that neither Yanks nor B & B Investors had the contractual right to retain any of the money that had been advanced.
After the deal failed to close, Rev. Lloyd returned to Calvary Chapel the remaining $5,000 he had been holding in escrow for the Halls.
By letter dated September 19, 1988, Holly Eakin Moody, an attorney for Calvary Chapel, wrote to Yanks demanding the return of all the money that had been advanced. The letter stated:
Please be advised that I have been retained
by Calvary Chapel Church of God in Christ, Inc., to begin the appropriate legal action against you and your wife, Ana Hernandez-Yanks, for return of my clients [sic] escrow funds in the amount of $24,000.
On or about December 24, 1988, Hernandez-Yanks tendered a check in the amount of $14,000 to Calvary Chapel. On the back of the check, the following release language was written:
Full and Final Settlement of all claims against B & B Mortgage and Barry Yanks or Ana Hernandez- Yanks.
Hernandez-Yanks wrote a letter dated February 7, 1989 to Holly Eakin Moody stating in part:
Please be advised that as per your client's request, on December 24, 1988 I mailed them
my trust account check in the amount of $14,000.
I have checked numerous times with the bank and said check has not been presented for payment.
I am hereby depositing said monies with the Registry of the Court.
If you should have any questions, please contact me.
It does not appear that Hernandez-Yanks ever deposited any money in the Registry of the Court in accordance with that February 7 letter.
By letter dated March 14, 1989, Holly Eakin Moody returned the check containing the accord and satisfaction language to Hernandez-Yanks and reiterated a demand for a return of the entire $24,000.
Ultimately, Hernandez-Yanks paid Calvary Chapel $14,000 by check dated March 6, 1990 on account number 020051156008 at the TransAtlantic Bank.
A review of the bank records indicates that the $14,000 advanced by Calvary Chapel to B & B Investors in late August and early September of 1988 was not held in escrow. On or about September 1, 1988, $10,000 was deposited in the trust or escrow account of Hernandez-Yanks at Continental Bank (the "Continental Trust Account"). An additional $4,000 was deposited in the Continental Trust Account on or about September 6, 1988. On or about October 4, 1988, the Continental Trust Account was closed with a closing balance of or about
$13,553.06.
On or about October 4, 1988, Hernandez-Yanks opened a trust or escrow account at Ocean Bank (the "Ocean Trust Account"). The beginning balance of the Ocean Trust Account on or about October 4, 1988, was $13,000. On or about December 7, 1988, the balance in the Ocean Trust Account was $2,437.
On or about December 15, 1988, Hernandez-Yanks opened a trust or escrow account at United National Bank (the "United Trust Account"). On or about January 19, 1990, the cash balance in the United Trust Account was
$2,236.29.
On or about January 5, 1990, Hernandez-Yanks opened a trust or escrow account at TransAtlantic Bank (the "TransAtlantic Trust Account"). The beginning balance of the TransAtlantic Trust Account on or about January 5, 1990, was $10,000. By check dated March 6, 1990, Calvary Church was paid
$14,000 from the TransAtlantic Trust Account.
There is no evidence that Yanks, Hernandez-Yanks and/or B & B Investors had any other escrow accounts.
Based upon the foregoing, it is concluded that Yanks failed to ensure that monies received in trust were properly placed in escrow in a transaction wherein he acted as a mortgage broker. Moreover, Yanks failed to ensure that the $14,000 received by Hernandez-Yanks was returned expeditiously to Calvary Chapel. Yank's explanation that he does not tell his wife, who is an attorney, "how to run her business" does not excuse his failure to ensure that money placed in escrow with his company was promptly returned when the transaction was terminated.
Yanks refused to repay any of the remaining $10,000 that was paid to B & B Investors claiming that he was entitled to keep the money as fees earned for processing a mortgage commitment from Allan Greenwald. As set forth above, the contention that the late Rev. Hall authorized payment in full of Yanks' fees is rejected as not credible. The more persuasive evidence established that the principals of Calvary Chapel did not understand that Yanks and/or B & B Investors were to be paid their fee even if the loan did not close. Since there was no agreement specifying when Yanks was to be paid, he had no legal right to retain the $10,000. Arguably, Yanks was entitled to some reimbursement for the expenses he incurred, including perhaps the $1,000 he supposedly paid to the investor's attorney. However, the evidence clearly established that Yanks was not entitled to retain the entire $10,000.
52 After the Department began its investigation of this case, Yanks offered to repay the loan discount fee of $4,860 to Calvary Chapel. As of the date of the hearing, Yanks was still refusing to repay the $4,860 loan origination fee which he claims he has earned.
While Yanks' claim to the $10,000 was legally insufficient and should have been recognized as such, the evidence did not establish that Yanks was attempting to defraud the Halls and/or Calvary Chapel. There were clearly some misunderstandings between the parties. Many of these problems could have been avoided if Yanks had properly documented his fee arrangement in writing. Yanks spent a good bit of time trying to put the deal together and felt slighted when the transaction he structured fell apart, especially when Calvary Chapel ended up occupying the Church anyway. Yanks overreacted in his attempts to obtain compensation for his services. The evidence was insufficient to establish that his actions should be characterized as fraudulent.
VAZQUEZ-CASTILLO TRANSACTION
In approximately mid-December of 1988, Ana Vazquez began working for Yanks. Vazquez was hired by Yanks to assist in the processing of mortgages. Prior to becoming employed by Yanks, she had little experience in real estate transactions. Vazquez was employed by Yanks for only about two or three weeks. Thereafter, she was employed by Hernandez-Yanks as a secretary. Both Yanks and Hernandez-Yanks occupy space in the same building. As noted above, Hernandez- Yanks is an attorney.
On or about February 27, 1989, Pura Castillo entered into a contract (the "Sales Contract") with Vazquez for the purchase of a condominium owned by Vazquez and located in Dade County, Florida, at 7440 Harding Avenue, Unit 301, Miami Beach, Florida (the "Condominium"). The sales price was $70,000. Pursuant to the Sales Contract, Vazquez was to convey title free and clear of
all encumbrances, by a good and sufficient Warranty Deed. "Free and clear of all encumbrances" meant that the title being transferred from Ana Vazquez to Pura Castillo was not to be encumbered by any mortgages, judgments or other liens. The Sales Contract was not made contingent upon Pura Castillo obtaining new financing.
The relationship between Ana Vazquez and Pura Castillo is not entirely clear. They were obviously well acquainted with each other. The evidence suggests that Pura Castillo's common law husband, Joseph Hardisson, was a close friend of the father of Ana Vazquez. While Pura Castillo and Joseph Hardisson were visiting with Vazquez, they began discussing the possible purchase of the Condominium by Pura Castillo.
Yanks first learned about the possible sale of the Condominium to Pura Castillo when Vazquez asked Hernandez-Yanks to represent her. Hernandez-Yanks indicated that she would represent Vazquez in the sale. Vazquez also requested Yanks' assistance in obtaining a loan for Pura Castillo. Yanks advised Vazquez that he did not process loan applications for employees. He suggested that she contact one of the mortgage lenders with whom he did business. Vazquez contacted one such company, Inter-Mortgage Corporation, and obtained a loan application package.
Shortly thereafter, a loan application was submitted with InterMortgage Corporation in the name of Pura Castillo. The circumstances surrounding the completion and submittal of that loan application are not entirely clear nor are they necessarily pertinent to this proceeding. The evidence did establish that the loan application contained some false information regarding Pura Castillo's residence and employment.
InterMortgage contacted Yanks' office and advised that there were some problems with the application. Vazquez went to InterMortgage's office and retrieved the application. The evidence did not establish that Yanks was aware of the filing of the application with InterMortgage and/or that he knew the application contained any false information.
It appears that a similar application with false information may also have been filed with another lender, Dixie Mortgage. There is no indication that Yanks was aware of the filing of this application and/or that he knew it contained false information.
The Condominium was subject to a $42,000 mortgage from Standard Federal to Vazquez (the "Standard Federal Mortgage"). The Standard Federal Mortgage was a typical Fannie Mae mortgage and included a commonly used due-on- sale clause in Clause 17. That clause provided for a default by the borrower upon sale of the property unless the mortgagee had consented to the assumption of the mortgage by the purchaser. There were no federal or state laws in existence at the time prohibiting the enforceability of Clause 17.
Vazquez had a contract to purchase another home which was contingent upon the sale of her Condominium. Thus, she was under some time pressure to close the sale of the Condominium. When it became apparent that a quick loan could not be arranged for Pura Castillo, Ana Vazquez turned to Yanks for advice.
While there is conflicting evidence as to the discussions that took place, the more persuasive evidence established that Yanks agreed to structure a deal that would enable Ana Vazquez to sell the Condominium to Pura Castillo.
As discussed in more detail below, Yanks structured a complicated and confusing arrangement whereby Pura Castillo was to make her monthly payments to B & B Equity, which was to play the role of a servicing agent and distribute the payments to the first mortgagee, Standard Federal. While Yanks now claims that after the Standard Federal Mortgage payment was made, the remainder of the monthly payments received by B & B Equity were going to be paid to Vazquez, there is no written agreement confirming this arrangement.
It is the usual practice in the industry for mortgage brokers to determine whether there are outstanding mortgages on the property to be sold and to see to it that an existing mortgage is paid off or otherwise taken care of at the time of closing. It is the responsibility of the mortgage broker to contact the institution holding the mortgage to find out if it is assumable. If an existing mortgage has a due-on-sale clause, the mortgage broker would characteristically contact the first lien holder and get an estoppel letter to determine the balance of the loan. The mortgage broker might also seek a waiver from the lender so that the sale could be made without paying off the loan. Without such a waiver, a due-on-sale clause would entitle the original lender to declare the entire original loan due upon sale of the property. Yanks never obtained an estoppel letter or a waiver of the due-on-sale clause from Standard Federal. While Yanks claims that he contacted various persons regarding the enforceability of due-on-sale clauses, he never contacted Standard Federal about the specific clause in its mortgage to Vazquez.
There is conflicting evidence regarding the discussions between Yanks and Vazquez regarding the structuring of the transaction. It is clear that Vazquez was more concerned with concluding the transaction rather than understanding the intricacies of it. As discussed in more detail below, the transaction structured by Yanks included several unexplained and/or inappropriate charges. In addition, the loan documentation was confusing and sometimes conflicting and/or contradictory. Vazquez indicated to Yanks that Pura Castillo was prepared to go forward with the sale and a closing was scheduled for June 16, 1989.
In preparation for the closing of the sale of her condominium, Vazquez incurred several expenses. On or about March 31, 1989, she paid $275 to have the condominium appraised. On or about April 5, 1989, Vazquez paid $200 to National Title Abstract Company for an update of the abstract. On or about June 15, 1989, she paid $150 to Ticor Title Co. She also paid for a credit report on Pura Castillo.
On June 16, 1989, Pura Castillo arrived at the office of Yanks and B & B Investors at 1481 N.W. 7th Street, Miami, Florida, to close on the purchase of the Condominium in accordance with the Sales Contract. Yanks and/or Hernandez- Yanks prepared the closing documents used at the closing.
Much of the closing was conducted in Spanish. Yanks is not fluent in Spanish. Hernandez-Yanks, who speaks Spanish, acted as the closing agent and remained throughout the process. Yanks and Vazquez were in and out of the room throughout the closing. During the closing, Pura Castillo was told that B & B Equity was going to be the lender for the transaction.
Pura Castillo inquired whether it was necessary for her to have her own attorney. Hernandez-Yanks replied that she could represent all parties and that it was not necessary for Pura Castillo to have her own attorney.
At the closing, Pura Castillo presented cashiers checks for $5,800,
$7,250 and $5,900 all made payable to the order of Ana Hernandez-Yanks, Trust Account. In addition, either Yanks or Hernandez-Yanks was given a check from Parker Realty in the amount of $2,800 which was the balance of the $7,000 deposit after payment of the $4,200 real estate commission.
From the $21,750 brought to the closing, $14,000 was disbursed to Ana Vazquez. As noted above, Vazquez had already paid for the abstract, appraisal and credit report. In addition, as part of her mortgage payment, she had contributed approximately $1,281 to an escrow for taxes and insurance for which she was entitled to be reimbursed. Thus, the net cash that she received from the closing was less than $12,000 from the sale of a $70,000 condominium with a
$42,000 mortgage.
At the closing, Vazquez executed an "Agreement for Deed" in favor of Pura Castillo. An agreement for deed is a conditional sales contract pursuant to which a seller agrees to sell property to a buyer over a period of time. The seller retains the legal ownership of the property until the full consideration for the purchase is paid. After all the conditions have been met, the seller delivers a deed conveying ownership of the land to the buyer.
The Agreement for Deed in this transaction provided as follows:
That if said Buyers shall first make the payments and perform the covenants herein mentioned on their part to be performed, the said Sellers hereby covenant and agree to convey and assure to the Buyers or their heirs or assigns, in fee simple, clear of all encumbrances whatever, by good and
sufficient Warranty Deed...[the condominium]
And the Buyers hereby covenant and agree to pay to the Sellers the sum of $70,000 to be paid as follows: $19,073.12 cash in hand, the receipt of which is hereby acknowledged, and $704.32 or more per month on or before the 16th day of each
and every month after the date of this instrument, to be mailed to the Sellers' address given herein, with interest at the rate of 11 percent, per annum
on the whole sum remaining from time to time unpaid,...
Arguably, the Agreement for Deed required Pura Castillo to make monthly payments to Vazquez of $704.32 plus interest on the outstanding balance. However, at the closing, Yanks provided Pura Castillo with a letter which explained that her monthly payments of $704.32 included $499.97 for principal and interest, $142.35 for real estate taxes and $62 for insurance.
At the closing, Pura Castillo executed a mortgage (the "Mortgage") in favor of B & B Equity as mortgagee. The Mortgage stated that it secured an indebtedness of $52,500 and a promissory note for that amount was executed by Pura Castillo to B & B Equity at the closing.
The Mortgage was similar in form and content to a Fannie Mae or a Freddie Mac mortgage form, except it included some additional provisions stating that it was a "Wraparound Mortgage." A wraparound mortgage is a financing device that is sometimes used when a seller of a piece of property agrees to
take back and finance a portion of the difference between an existing first mortgage which is not being assumed or satisfied and the sales price for the property. Typically, the mortgagor on the first mortgage is the seller of the property and the mortgagee on the wraparound mortgage. The wraparound mortgage becomes a second or other junior mortgage behind the existing mortgage. The mortgagee of the wraparound mortgage agrees to continue making payments on the existing primary mortgage, at least so long as payments are made under the wraparound mortgage.
Page 8 of the Mortgage included the following language:
This is a Wraparound Mortgage.
This wraparound mortgage is a second mortgage. It is inferior to certain mortgage [sic], herein called the first mortgage which
covers the above described property at the time of execution of this wraparound mortgage.
The wraparound mortgagee shall be excluded from any terms or conditions of the prior mortgagees.
The wraparound mortgagee's obligation to pay the prior mortgages is limites [sic] to funds received from the wraparound mortgagor.
For a number of reasons, the use of a wraparound mortgage in this transaction was totally inappropriate. The first page of the mortgage included a number of warranties including the following:
The mortgagor hereby covenants with and warrants
to the Mortgagee that the Mortgagor is indefeasibly seized with the absolute and fee simple title to said property.
This warranty is inconsistent with the ownership interest that the Mortgagor, Pura Castillo, had as a result of this transaction. Pura Castillo's
only claim to title was via the Agreement for Deed and she was not indefeasibly seized with the fee simple title.
As noted above, the Mortgage states that it secures an indebtedness of
$52,500 and a promissory note (the "Note") for that amount was executed by Pura Castillo to B & B Equity at the closing. That Note required Pura Castillo to make payments directly to B & B Equity. However, the Agreement for Deed calls for Pura Castillo to make payments to Vazquez. Moreover, Pura Castillo signed the Note obligating herself to make payments on a $52,500 indebtedness to B & B Equity even though the Standard Federal Mortgage was not satisfied and had a remaining balance of $42,000. In other words, the result of this transaction, at least as it appeared on the public records, is that a $70,000 condominium was encumbered by two separate mortgages (the Standard Federal Mortgage and the "Wraparound Mortgage") securing separate promissory notes totalling more than
$94,000.
At no time prior to or during the closing did Yanks or Hernandez-Yanks explain to Pura Castillo that an Agreement for Deed was being utilized in this transaction and that she would not obtain full legal title until all of the
mortgages were paid off. Furthermore, neither Yanks or Hernandez-Yanks explained to Pura Castillo that the mortgage she signed in favor of B & B Equity was a wraparound second mortgage.
While Yanks contends that Pura Castillo had plenty of opportunity to review the documents and ask questions regarding them, she was clearly an unsophisticated buyer who was incapable of deciphering the confusing and ambiguous documentation for this clumsily crafted transaction.
In sum, the use of an agreement for deed and a wraparound mortgage in the same transaction was redundant, confusing and illogical. Moreover, Yanks' efforts in this transaction clearly violated the due-on-sale clause (Clause 17) in Standard Federal's existing first mortgage.
The Department has suggested that the transaction was a calculated fraud with some undefined goal. After considering all the evidence, the transaction can more accurately be described as an awkward attempt at creative financing which included a number of hidden and inappropriate charges for the benefit of Yanks and/or B & B Equity.
Yanks contends that Vazquez was desperate to close the sale and authorized him to proceed with whatever financing he could arrange so long as she netted $14,000 from the sale. He claims that she agreed to the wraparound mortgage as the only way to proceed with the deal under the circumstances. Under this arrangement, he contends that B & B was authorized to retain any additional proceeds as compensation for serving as a servicing agent on the wraparound mortgage. Even if this explanation is accepted, there are a number of problems with the actions of Yanks and B & B Equity in this transaction.
First of all, there was no written servicing agreement setting forth the obligations of the servicing agent nor is there any delineation of the amount of money to be paid for servicing the wraparound mortgage. Moreover, the Agreement For Deed and the Promissory Note call for Pura Castillo to make payments of slightly more than $700 per month. These payments exceed the monthly payments due under the Standard Federal Mortgage. However, there is no written delineation of how the additional payments received each month were to be disbursed. Finally, the servicing arrangement was never explained to Pura Castillo and the documentation for the transaction was very confusing and often contradictory.
There is no closing statement for the transaction that accurately reflects all of the disbursements made from the proceeds of the closing. Petitioner's Exhibit 23 is a closing statement signed by both Vazquez and Pura Castillo and purports to delineate certain expenses paid from the proceeds of the sale. Petitioner's Exhibit 7 is an unsigned closing statement which Yanks contends he prepared for use at the closing of the loan. He claims that, after the closing, he found out that Vazquez substituted Petitioner's Exhibit 23 for the closing statement that he intended to be used because she thought it more accurately depicted the fees as she had discussed them with Pura Castillo. This explanation is rejected as not credible. Petitioner's Exhibit 23 was the only closing statement signed by both the buyer and seller. As noted above, Vazquez was in and out during the closing. Hernandez-Yanks was present throughout the closing. The more credible evidence established that Petitioner's Exhibit 23 was the closing statement presented at the closing and executed by the participants.
Neither closing statement accurately explains how all of the funds from the sale were disbursed. Thus, it is impossible to determine conclusively how much money Yanks and/or B & B Equity received from the closing. Both statements include some charges which are inappropriate or questionable. Furthermore, it is clear that Yanks and/or B & B received more than either statement indicated.
Both closing statements reflect a payment of $600 for title insurance. However, the evidence established that no title insurance policy was ever issued. Vazquez paid for a title insurance commitment prior to the closing. Such a commitment is typically issued by a title insurance company prior to a real estate transaction and is a contractual agreement by the title insurer to issue a policy of title insurance upon compliance with certain terms and conditions. The actual title insurance policy is not issued until after the transaction has closed. The title insurance policy, not the commitment, insures the main insured against certain defects in title. The $600 charge for title insurance reflected on both closing statements was totally inappropriate in this case since no title policy was ever issued.
Petitioner's Exhibit 23 includes a number of charges assessed to the buyer which were wholly inappropriate to this transaction. For example, the closing statement included a $500 charge for FNMA underwriting. This fee is charged by the institution underwriting a mortgage loan for compliance with Fannie Mae guidelines. Since the Mortgage in this case was clearly not intended to be sold to a Fannie Mae pool, the FNMA charge was not appropriate.
Similarly, the closing statement included a $250 charge for a warehouse fee. This is a fee paid to institutions to cover the cost of a warehouse line of credit and is totally inapplicable to the transaction involved in this case. The closing statement also included a photo fee of $25, a lender's inspection fee of $150 and a survey fee of $225. There is no indication that any photos were taken, an inspection was conducted or a survey was prepared. Petitioner's Exhibit 23 also included a loan origination fee of $1,375 and brokerage fees of
$1,575. Petitioner's Exhibit 7 included a lump sum brokerage fee of $5000, but did not include any of the other charges listed in this paragraph.
There is no dispute that Yanks and/or his firm were paid mortgage brokerage fees out of the proceeds of the closing. These fees are reflected on both of the closing statements (Petitioner's Exhibits 7 and 23). A mortgage broker is paid a fee to negotiate a mortgage loan transaction for another party. In other words, he is retained to find a lender for a potential borrower. Under a mortgage servicing agreement, the servicer is paid a fee to handle the collection and disbursement of payments on a mortgage loan. Any fees paid for servicing a loan should be separately itemized and disclosed. It is not appropriate for a person who is to service a loan to receive what has been disclosed as a broker fee.
Irrespective of which closing statement is deemed authentic, the evidence established that Yanks and/or B & B Equity received significantly more money from the closing than was reflected on either closing statement. As indicated above, $21,750 cash was presented at the closing, of which $14,000 was paid to Vazquez. According to Petitioner's Exhibit 7, there was $6,123.35 in closing costs (including a $5,000 brokerage fee). Thus, there is at least
$1,626.65 in cash that is not reflected on the closing statement. Yanks contends that Vazquez told him to keep this money in return for servicing the loan. This contention is rejected as not credible.
Similarly, Petitioner's Exhibit 23 indicates closing costs of $6,379 (including the charges in paragraph 89 above). Thus, there is $1371 unaccounted for. Moreover, it is clear that Yanks and/or B & B received in excess of $6,500 which is not readily discernible from the face of the closing statement.
Subsequent to the closing, B & B Equity received at least five monthly payments of $704.32 on the Wraparound Mortgage from Joseph L. Hardisson, the common law husband of Pura Castillo. B & B Equity apparently distributed some of these funds in accordance with its claimed role of "servicing agent." However, on at least one occasion in late 1989, a check issued by B & B Equity to pay the Standard Federal Mortgage was returned for insufficient funds. In addition, a check issued by B & B Equity in the amount of $700 to Ana Vazquez in December of 1989 bounced.
At some point in late 1989 or early 1990, Pura Castillo became concerned when she learned that the Standard Federal Mortgage had not been paid off. In January or February 1990, Pura Castillo and her husband came to Florida and attempted to contact Yanks regarding the transaction and the irregularities surrounding it. Ultimately, Pura Castillo filed a complaint with the Department and also filed a civil suit in Circuit Court seeking cancellation of the Mortgage and the issuance of a warranty deed in her favor.
On April 17, 1990, Vazquez executed a warranty deed to Pura Castillo. Vazquez states that she felt obligated to convey all of her interest in the property to Pura Castillo in view of the confusing and unfair circumstances surrounding the initial transaction.
On October 23, 1990, Yanks and B & B Equity entered into a Settlement Agreement with Pura Castillo pursuant to which they paid Pura Castillo $12,000 and the wraparound mortgage was cancelled of record. The Settlement Agreement also resulted in the dismissal of the civil suit and called for Pura Castillo to withdraw her complaint filed with the Department. Despite this withdrawal, the Department has chosen to proceed with this administrative action.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this proceeding pursuant to Section 120.57(1), Florida Statutes.
Pursuant to Section 494.052, Florida Statutes, the Department is empowered to revoke, suspend, or otherwise discipline the license of any mortgage broker in the State of Florida who is found to have committed any of the acts enumerated in Section 494.055, Florida Statutes.
Hernandez-Yanks and B & B Equity are not registered mortgage brokers under Chapter 494, Florida Statutes. However, their involvement in the transactions discussed in this case arguably contravene certain provisions of Chapter 494, Florida Statutes. The Department contends that it can enter cease and desist orders and fine unlicensed persons who have violated Chapter 494.
Section 494.072(1), Florida Statutes (1987), provides:
The Department shall have the power to issue and serve upon any person a cease and desist order whenever there is reason to believe the person is violating, has violated, or is about
to violate any provision of this chapter. . . .
All procedural matters relating to issuance and enforcement of the cease and desist order shall
be in accordance with the Administrative Procedure Act. 1/
Section 494.02(1), Florida Statutes, defines a "person" for purposes of the statute as a "individual, partnership, corporation, association, and any other group, however organized." Thus, the Statute does not limit the Department's cease and desist authority or its enforcement powers to those individuals or groups registered pursuant to Chapter 494. Accordingly, the Department's interpretation is accepted. See Florida Public Service Commission v. Bryson, 569 So.2d 1253, 1255 (Fla. 1990).
As set forth in the Preliminary Statement above, Hernandez-Yanks did not personally appear at the hearing in this matter. Counsel for Respondents took exception to the earlier ruling of Hearing Officer Parrish that the Violations Case could proceed notwithstanding the filing of a bankruptcy petition by Hernandez-Yanks. Counsel for Respondents also argued that, since Hernandez-Yanks is an attorney, only the Florida Bar can take disciplinary action against her for professional violations.
Hearing Officer Parrish's ruling on the Motion to Dismiss or Abate is hereby adopted and incorporated herein. Enforcement actions are exempt from the automatic stay provisions of the Bankruptcy Code by virtue of 11 U.S.C. Section 362(b)(4). See, Board of Governors of the Federal Reserve System v. Mcorp Financial, Inc., 112 S.Ct. 459 (1991). While sanctions may be imposed, collection of any monetary fines requires application to the bankruptcy court. National Labor Relations Board v. 15th Avenue Iron Works, Inc., 964 F. 2d 1336 (2d Circuit 1992).
Respondents have provided no authority for the contention that Hernandez-Yanks' status as an attorney provides her immunity from proceedings initiated by the Department to halt violations under Chapter 494. To the extent that the Department seeks a determination that Hernandez-Yanks' representation of both parties in the Pura Castillo closing was improper, such matters are only properly reviewed by the Florida Bar and should not be considered as part of this proceeding. However, to the extent the Department seeks to enforce the provisions of Chapter 494, it is concluded that such efforts are appropriate.
As noted in the Preliminary Statement, B & B Equity has withdrawn its application for licensure under Chapter 494. Consequently, the Application Case is dismissed as moot.
With respect to the Violations Case, the Department has the burden of proving the allegations in the Amended Administrative Complaint by clear and convincing evidence. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987). 2/ As noted in Smith v. Department of Health and Rehabilitative Services, 522 So.2d 956 (Fla. 1st DCA 1988);
"clear and convincing evidence" is an intermediate standard of proof, more than the "preponderance
of the evidence" standard used in most civil cases, and less than the "beyond a reasonable doubt" standard used in criminal cases.
Respondents are charged with violations of the following provisions of Chapter 494, Florida Statutes (1987):
494.055 Grounds for Disciplinary action.
(1) The following acts shall constitute grounds for which the disciplinary actions specified in Section 494.052 may be taken:
* * *
(b) Fraud, misrepresentation, deceit, negligence,
or incompetence in any mortgage financing transaction;
* * *
Failure to place, immediately upon receipt,
any money, fund, deposit, check, or draft entrusted to him by a person dealing with him as a broker, in
escrow with an escrow agent located and doing business in this state, pursuant to a written agreement, or to deposit said funds in a trust or escrow account maintained by him with a bank or savings and loan association located and doing business in this state, wherein said funds shall be kept until disbursement thereof is properly authorized;
* * *
Failure to account or deliver to any person any personal property, such as any money, fund, deposit, check, draft, mortgage, or other document or thing of value, which has come into his hands and which is not his property or which he is not in law or equity entitled to retain, under the circumstances and at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting
and delivery;
* * *
Failure to disburse funds in accordance with agreements;
* * *
Any breach of trust funds or escrow funds, or any misuse, misapplication, or misappropriation of personal property, such as any money, fund, deposit, check, draft, mortgage, or other document or thing of value, entrusted to his care to which he had no current property right at the time of entrustment regardless of actual injury to any person;
* * *
(q) Failure to comply with, or violation of, any other provision of this chapter.
* * *
Section 494.08, Florida Statutes (1987) provides as follows:
494.08 Requirements and Prohibitions.
* * *
(5) No person shall enter into a contract for mortgage brokerage services without delivering to the borrower a statement in writing setting forth the total maximum costs to be charged,
incurred, or disbursed in connection with processing and closing the mortgage loan. The contract for mortgage brokerage services shall indicate the financing terms, interest rate, and loan origination fees which are acceptable to the borrower. The maximum estimated costs may be expressed as a range of possible costs. In the
event the total actual costs, excluding the mortgage brokerage fee, loan origination fee, and prepaid items, including taxes, hazard insurance, prepaid interest, and mortgage insurance, exceed the estimate by more than 10 percent or $100, whichever is greater, the broker shall be required to obtain a written agreement from the borrower acknowledging that, although the borrower is under no obligation to conclude the transaction, the borrower has elected
to do so notwithstanding the increase over estimated costs. This subsection shall apply only to brokerage agreements on loans to be secured by residential properties containing four or less units.
* * *
494.093 Prohibited Practices
* * *
In any practice or transaction or course of business relating to the sale, purchase, negotiation, promotion, advertisement, or hypothecation of mortgage transactions, including any transaction consummated
by parties under the provisions of Section 494.03, directly or indirectly:
To knowingly or willingly employ any device, scheme, or artifice to defraud.
To engage in any transaction, practice, or course of business which operates as a fraud upon any person in connection with the purchase or sale of any mortgage loan.
To obtain property by fraud, willful misrepresentation of a future act, or false promise.
In any matter within the jurisdiction of the department, to knowingly and willfully falsify, conceal, or cover up by any trick, scheme, or device a material fact, or make any false or fraudulent statement or representation, or make or use any false writing or document, knowing the same to contain any false or fraudulent statement or entry.
The failure of B & B Investors and Yanks to return the loan discount fee received in the Calvary Chapel transaction clearly violated Sections 494.055(1)(b), (f), (g) and (h)(1987) since that fee was only payable to the lender if the loan closed. It is also concluded that the failure to return the loan origination fee was a violation of these statutory provisions.
The borrowers were not clearly advised that the loan origination fee would be retained by Yanks and B & B Investors irrespective of whether the loan closed. While Yanks and B & B Investors expended efforts in attempting to arrange a loan, numerous changes were made to the proposed transaction after the January 14, 1988 meeting. None of these transactions are reflected in writing even though these changes resulted in the borrowers having to seek additional
collateral and a second mortgage from the sellers after they executed their Loan Application. Notwithstanding the efforts of Calvary Chapel, the loan failed to close.
The evidence clearly established that the late Rev. and Mrs. Hall wanted to minimize any expenses prior to the loan closing. They clearly specified that the initial $15,000 that they delivered to Rev. Lloyd was to be held in escrow. While $10,000 of that money was delivered to Yanks and B & B Investors, it is concluded that the late Rev. and Mrs. Hall did not agree that Yanks and B & B Investors had fully earned this sum. The money should have been retained in escrow until the loan closed or written authorization was received from the borrowers to use the money to pay expenses.
The evidence also clearly established that Yanks and Hernandez-Yanks violated Section 494.055(1)(e) (1987) by failing to deposit the $10,000 received on August 23, 1988 and the $4,000 received on September 1, 1988 in an escrow account with a written escrow agreement.
With respect to the Pura Castillo transaction, the evidence also clearly established that Yanks and Hernandez-Yanks failed to explain to Pura Castillo the extremely confusing and unusual financing arrangement. In addition, the loan documentation was negligently prepared. The Respondents also attempted to deliberately circumvent the requirements of Clause 17 of the Standard Federal Mortgage. Finally, the evidence clearly established that the buyer in that transaction was charged a number of inappropriate and excessive fees. Consequently, Yanks and Hernandez-Yanks have violated Section 494.055(1)(b),(f),(g) and (h) (1987 and 1989) as alleged in the Amended Administrative Complaint. In addition, Yanks has violated Section 494.055(1)(q) by failing to comply with the requirements of Section 494.08, Florida Statutes.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that:
A Final Order be entered finding Respondents B & B Investors, Yanks and Ana Hernandez-Yanks guilty of the violations alleged in Counts I, II, III, and IV of the Amended Administrative Complaint, finding them not guilty of Count VI and imposing an administrative fine of $5,000 which should be payable jointly and severally. Yanks and B & B Investors should also be required to repay
$9,000 to Calvary Chapel within 30 days after the rendition of the Final Order. Failure to repay this sum should be a basis for the imposition of additional penalties, including revocation. The mortgage brokerage licenses of Yanks and B & B Investors should be suspended for one (1) year for their actions in connection with the Calvary Chapel transaction.
A Cease and Desist Order should also be entered against Ana Hernandez- Yanks prohibiting her from any future violations of Chapter 494, Florida Statutes, from engaging in any act within the jurisdiction of the Department pursuant to Chapter 494, Florida Statutes, and from being an ultimate equitable owner of a business license pursuant to Chapter 494, Florida Statutes. The facts surrounding her trust account should be reported to the Florida Bar for investigation.
A Final Order should also be entered finding Yanks, Hernandez-Yanks, and B & B Equity guilty of the violations alleged in Counts VIII, IX, and XI, finding Yanks and B & B Equity guilty of the violations alleged in Counts XII and finding Hernandez-Yanks guilty of violations alleged in Count XIII of the Amended Administrative Complaint. The Final Order should find the Respondents not guilty of the violations alleged in Counts X and XIV. Based upon the foregoing, the Department should impose an administrative fine of $5,000. The mortgage brokerage license of Yanks should be suspended for a period of three
years to run consecutively with the suspension issued in connection with the Calvary Chapel transaction. Respondents should also be required to repay
$6,040.12 to Ana Vazquez for inappropriate and undisclosed charges made at the closing.
The collection of all fines and/or assessments against Ana Hernandez- Yanks and/or B & B Investors should be suspended pending approval of the Bankruptcy Court.
In view of the Voluntary Dismissal filed on November 9, 1993, the Final Order should formally dismiss the Application Case.
DONE AND ENTERED in Tallahassee, Leon County, Florida, this 18th day of August 1994.
J. STEPHEN MENTON Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 18th day of August 1994.
ENDNOTES
1/ The present statute includes similar cease and desist authority. See Section 494.0014(1), Florida Statutes.
2/ While there is some authority for the position that a preponderance of the evidence standard should be used in a cease and desist case which does not involve the loss of a license, see Southport Pharmacy v. Department of Health and Rehabilitative Services, 596 So.2d 106,109 (Fla. 1st DCA 1992); Allen v.
Dade County School Board, 571 So.2d 568, 569 (Fla. 3d DCA 1990), the clear and convincing standard has been applied to all aspects of the Violations Case.
APPENDIX TO RECOMMENDED ORDER
Both parties have submitted Proposed Recommended Orders. The following constitutes my rulings on the proposed findings of fact submitted by the parties.
Petitioner's Proposed Findings of Fact.
Preliminary Facts
Adopted in substance in Findings of Fact 1 and 2.
(a) Adopted in substance in Findings of Fact 4 and 5.
(b) Adopted in substance in Findings of Fact 6.
Adopted in substance in Findings of Fact 3.
Adopted in substance in Findings of Fact 5.
Calvary Chapel Church of God and Christ, Inc. Transaction
Adopted in substance in Findings of Fact 8.
Adopted in substance in Findings of Fact 9 and 11.
Adopted in substance in Findings of Fact 12.
Adopted in substance in Findings of Fact 13.
Adopted in substance in Findings of Fact 15.
Adopted in substance in Findings of Fact 16, 17 and 20.
Adopted in substance in Findings of Fact 18 and 21.
Subordinate to Findings of Fact 17, 18 and 22.
Subordinate to Findings of Fact 23.
Adopted in substance in Findings of Fact 25.
Adopted in substance in Findings of Fact 33.
Adopted in substance in Findings of Fact 31.
Adopted in substance in Findings of Fact 31.
Adopted in substance in Findings of Fact 31.
Subordinate to Findings of Fact 34, 35, 36 and 37.
Adopted in substance in Findings of Fact 36.
Adopted in substance in Findings of Fact 38, 39 and 51.
Adopted in substance in Findings of Fact 40.
Adopted in substance in Findings of Fact 41, 42 and 43.
Adopted in substance in Findings of Fact 44.
Subordinate to Findings of Fact 50.
(a)-(d) Adopted in substance in Findings of Fact 45-48.
Adopted in substance in Findings of Fact 50.
Pura Castillo Transaction
Subordinate to Findings of Fact 56.
(a) Adopted in substance in Findings of Fact 61.
Adopted in substance in Findings of Fact 65.
Rejected as ambiguous and unnecessary.
Adopted in substance in Findings of Fact 54 and 57.
Adopted in substance in Findings of Fact 55.
Adopted in substance in Findings of Fact 67.
Subordinate to Findings of Fact 63 and 68.
Adopted in substance in Findings of Fact 68 and 69.
Adopted in substance in Findings of Fact 70.
Adopted in substance in Findings of Fact 71.
Adopted in substance in Findings of Fact 72 and 75.
Adopted in substance in Findings of Fact 76-78, 81 and 85.
Subordinate to Findings of Fact 93-94.
Adopted in substance in Findings of Fact 88.
Rejected as unnecessary.
Adopted and pertinent in part in Findings of Fact 73.
(a)-(d) Adopted and pertinent in part in Findings of Fact 79 and 80.
(a)-(f) Adopted and pertinent in part in Findings of Fact 79-80, 84 and 85.
(a)-(c) Adopted in substance in Findings of Fact 86 and 89.
Adopted in substance in Findings of Fact 90-92.
(a)-(d) Adopted in substance in Findings of Fact 67, 72, 91 and 92.
Respondent's Proposed Findings of Fact.
Preliminary Facts
Adopted and pertinent in part in Findings of Fact 1-3.
Adopted in substance in Findings of Fact 4-7.
Addressed in the preliminary statement and in Findings of Fact 5.
Calvary Chapel Church of God and Christ, Inc. Transaction
Adopted in substance in Findings of Fact 8-11.
Subordinate to Findings of Fact 12.
Subordinate to Findings of Fact 13-14.
Subordinate to Findings of Fact 14 and 15.
Rejected as vague, ambiguous and unnecessary.
Adopted and pertinent in part in Findings of Fact 16 and 17.
Adopted in substance in Findings of Fact 18.
Subordinate to Findings of Fact 18 and 22.
Adopted in substance in Findings of Fact 23.
Adopted in substance in Findings of Fact 23.
Rejected as argumentative.
Rejected as argumentative and ambiguous.
Rejected as argumentative and ambiguous.
Rejected as argumentative and subordinate to Findings of Fact 51.
Subordinate to Findings of Fact 22 and 51.
Subordinate to Findings of Fact 25 and 26.
Subordinate to Findings of Fact 25 and 26.
Subordinate to Findings of Fact 25 and 26.
Adopted in substance in Findings of Fact 21 and 22. Subordinate to Findings of Fact 24 and 30-31.
Subordinate to Findings of Fact 30 and 31.
Adopted in substance in Findings of Fact 31.
Adopted in substance in Findings of Fact 35.
Adopted in substance in Findings of Fact 36.
Adopted in substance in Findings of Fact 39.
Adopted in substance in Findings of Fact 44.
Subordinate to Findings of Fact 51 and 52.
Adopted in substance in Findings of Fact 3.
Pura Castillo Transaction
Adopted in substance in Findings of Fact 54.
Adopted in substance in Findings of Fact 55.
Adopted in substance in Findings of Fact 61.
Adopted in substance in Findings of Fact 57.
Subordinate to Findings of Fact 57.
Subordinate to Findings of Fact 57 and 58.
Subordinate to Findings of Fact 59.
Subordinate to Findings of Fact 59.
Subordinate to Findings of Fact 59.
Subordinate to Findings of Fact 60.
Subordinate to Findings of Fact 62 and 66.
Subordinate to Findings of Fact 59, 60, 62 and 66.
Subordinate to Findings of Fact 63 and 66.
Subordinate to Findings of Fact 63, 64 and 66.
Subordinate to Findings of Fact 66, 81, and 83-85.
Rejected as vague, ambiguous and unnecessary.
Subordinate to Findings of Fact 79, 80 and 83.
Subordinate to Findings of Fact 77.
Rejected as vague and ambiguous.
Subordinate to Findings of Fact 84.
Rejected as argumentative.
Rejected as vague and argumentative.
Adopted in substance in Findings of Fact 73 and 76.
Adopted in substance in Findings of Fact 78.
Subordinate to Findings of Fact 86.
Subordinate to Findings of Fact 86.
Subordinate to Findings of Fact 86, 87, 91 and 92.
Subordinate to Findings of Fact 74, 75, 86, 87 and 91.
Subordinate to Findings of Fact 71 and 72.
Adopted in substance in Findings of Fact 71.
Subordinate to Findings of Fact 86, 87 and 91.
Rejected as contrary to the weight of the evidence. See Findings of Fact 91.
Subordinate to Findings of Fact 82.
Adopted and pertinent in part in Findings of Fact 94.
Subordinate to Findings of Fact 96.
COPIES FURNISHED:
Paul C. Stadler, Jr. Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399
George J. Lott, Esquire Lott and Levine
5975 Sunset Drive, Suite 302
Miami, Florida 33143
Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level
Tallahassee, Florida 32399-0350
William G. Reeves General Counsel
The Capitol Room 1302 Tallahassee, Florida 32399-0350
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
| Issue Date | Proceedings |
|---|---|
| Jul. 25, 1995 | Final Order And Notice of Rights filed. |
| Aug. 23, 1994 | Letter to G. Lewis from JSM (RE: correcting page 50 of recommended order) filed. |
| Aug. 18, 1994 | Recommended Order sent out. CASE CLOSED. Hearing held April 29 through May 1, 1992. |
| Aug. 31, 1993 | Notice of Filing Supplemental Authority filed. (From Paul C. Stadler,Jr.) |
| Jun. 15, 1993 | Notice of Filing Supplemental Authority filed. |
| Dec. 07, 1992 | Reply to Petitioner's Response to Respondents' Proposed Recommended Order filed. |
| Nov. 18, 1992 | Response to Respondents' Proposed Recommended Order filed. |
| Nov. 09, 1992 | (Respondents) Notice of Filing Proposed Recommended Order w/Proposed Recommended Order filed. |
| Nov. 09, 1992 | (Petitioners) Notice of Voluntary Dismissal filed. |
| Oct. 28, 1992 | Letter to JSM from George J. Lott (re: response to Motion for issurance of a recommended order) filed. |
| Oct. 23, 1992 | Motion for The Issuance of A Recommended Order, When Time Permits filed. (From Paul C. Stadler, Jr.) |
| Oct. 09, 1992 | Notice of Filing Respondents' Answer to the Department's Request for Admissions filed. |
| Aug. 28, 1992 | Response to Motion for Extension of Time For Filing Proposed Recommended w/Exhibits A-G filed. (From Paul C. Stadler, Jr.) |
| Aug. 25, 1992 | (Respondents) Motion for Extension of Time For Filing Proposed Recommended Order filed. |
| Aug. 14, 1992 | Notice of Filing Proposed Recommended Order w/Proposed Recommended Order (unsigned); Motion filed. (From Paul C. Stadler, Jr.) |
| Jul. 15, 1992 | (original & copy) Transcript (Vols 1-3); Notice of Filing Trancript of Administrative Hearing filed. (From Paul C. Stadlet, Jr.) |
| Apr. 22, 1992 | Order sent out. (motion to amend granted; motion for official recognition granted) |
| Apr. 06, 1992 | (Respondent) Motion for Official Recognition w/Certificate of Clerk & Final Order and Notice of Rights filed. |
| Apr. 06, 1992 | Motion to Amend; Amended Administrative Complaint for a Cease and Desist Order, an Order of Refund, and for the Imposition of One or More Administrative Penalties and Notice of Rights; Second Amended Notice ofIntent to Deny the Ap plication for Registra |
| Feb. 13, 1992 | Third Notice of Hearing sent out. (hearing set for April 29-30, 1992; 9:00am; Miami). |
| Feb. 13, 1992 | Letter to Parties of Record from MMP sent out. (RE: Notice of Hearing). |
| Feb. 06, 1992 | Letter to MMP from Paul C. Stadler, Jr. (re: scheduling hearing) filed. |
| Jan. 28, 1992 | Request to Reschedule Hearing filed. (From Paul C. Stadler, Jr.) |
| Jan. 17, 1992 | (Petitioners) Motion for Continuance filed. |
| Jan. 13, 1992 | Order sent out. (Hearing continued). |
| Jan. 09, 1992 | (Respondent) Request for Official Notice filed. |
| Jan. 09, 1992 | (joint) Motion for Continuance filed. |
| Dec. 24, 1991 | CC Letter to George J. Lott from Paul C. Stadler (re: written proposal to settle case filed. |
| Nov. 15, 1991 | CC Letter to George J. Lott from Paul C. Stadler, Jr. (re: Continuance) filed. |
| Nov. 15, 1991 | Order Granting Continuance and Rescheduling Hearing sent out. (hearing rescheduled for Jan. 16, 1992; 9:00am; Miami). |
| Nov. 05, 1991 | Notice of Taking Deposition Duces Tecum (4) filed. (From Paul C. Stadler, Jr.) |
| Aug. 07, 1991 | Respondents' Response to Hearing Officer's Inquiry Regarding Hearing Dates filed. (From George J. Lott) |
| Aug. 05, 1991 | Second Notice of Hearing sent out. (hearing set for Nov. 20, 1991; 9:00am; Miami). |
| Aug. 05, 1991 | Order sent out. (Re: Rulings on Motions). |
| Jul. 30, 1991 | Department's Response to Hearing Officer's Inquiry Regarding Hearing Dates filed. (From Paul Stadler, Jr.) |
| Jul. 26, 1991 | Department's Reply to Respondents' Response to Motion to Take Depositions by Telephone filed. (From Paul C. Stadler, Jr.) |
| Jul. 22, 1991 | Respondents' Response to Motion to Take Depositions by Telephone filed. (From George J. Lott) |
| Jul. 08, 1991 | Second Amended Response to Order Entered June 24, 1991 filed. (From Paul C. Stadler, Jr.) |
| Jul. 05, 1991 | (respondent) Amended Response to Order Entered June 24, 1991 filed. |
| Jul. 03, 1991 | (respondent) Response to Order Entered June 24, 1991 filed. |
| Jul. 03, 1991 | Department's Motion to Take Depositions by Telephone filed. |
| Jun. 24, 1991 | Order sent out. (status due in 10 days) |
| Mar. 18, 1991 | Order Granting Continuance (status report due as soon as the subject witness is able to travel to hearing) sent out. |
| Mar. 15, 1991 | Departments Motion to Continue The Hearing to Be Held on March 27, 1991 filed. |
| Feb. 11, 1991 | Order Granting Continuance and Rescheduling Hearing sent out. (hearing rescheduled for March 27, 1991: 9:00 am: Miami) |
| Feb. 08, 1991 | (Petitioners) Motion for Continuance filed. (From George J. Lott) |
| Dec. 12, 1990 | Notice of Hearing sent out. (hearing set for 2/22/91; 9:00am; Miami) |
| Nov. 28, 1990 | Order of Consolidation sent out. Consolidated case are: 90-4722 and 90-6577 |
| Nov. 28, 1990 | Order Denying Motion to Dismiss or Abate sent out. |
| Nov. 16, 1990 | (Respondents) Response to Requests For Production From B&B Mortgage Investers, Inc., B. &B Mortgage Equity, Inc., Barry S. Yanks Individually and as Principal Mortgage Broker of B&B Mortgage Investors, Inc., and ANA Hernandez-Yanks filed. (From George J. |
| Nov. 16, 1990 | Answers to the Department of Banking and Finance's Request For Admissions to B&B Mortgage Investors, Inc., B&B Mortgage Equity, Inc., BarryS. Yanks, Individually and As Principal Mortgage Broker of B&B Mortgage Investors, IN., and ANA Hernandez-Yanks rec |
| Oct. 16, 1990 | (Respondent) Motion to Consolidate filed. (From Paul C. Stadler, Jr.) |
| Oct. 16, 1990 | (Respondent) Motion to Consolidate & cover ltr filed. (From Paul C. Stadler) |
| Oct. 05, 1990 | (Respondents) Answer to Administrative Complaint & Motion to Dismiss or Abate filed. (From George J. Lott) |
| Oct. 01, 1990 | The Department of Banking And Finance's Request For Admissions to B&BMortgage Investors, Inc.; Interrogatories to B&B Mortgage Investors, Inc.; Request For Production; Certificate of Service filed. (From PaulC. Stadler, Jr.) |
| Oct. 01, 1990 | The Department of Banking and Finance's Request For Admissions to AnaHernandez-Yanks; Certificate of Service; Request For Production filed. (from Paul C. Stadler, Jr.) |
| Oct. 01, 1990 | The Department of Banking and Finance's Request For Admissions to B&BMortgage Equity, Inc.; Request For Production; Certificate of Service; Interrogatories to B&B Mortgage Equity, Inc.; Interrogatories to AnaHernandez-Yanks w/exh ibits 1-34 filed. (From |
| Sep. 20, 1990 | Order (department's motion to amend granted) sent out. |
| Sep. 18, 1990 | Department's Response to Request to Produce and Objection filed. |
| Sep. 13, 1990 | (Respondent) Motion to Amend filed. (From Paul C. Stadler, Jr.) |
| Sep. 07, 1990 | (Petitioners) Response to Request For Production filed. (From George J. Lott) |
| Aug. 31, 1990 | Notice of Filing Administrative Complaint; Administrative Complaint for A Cease and Desist Order, An Order of Refund, and for the Imposition of One of More Administrative Penalties and Notice of Rights filed. |
| Aug. 23, 1990 | (Respondent) Amended Response to Order Entered on August 3, 1990 filed. (From Paul C. Stadler, Jr.) |
| Aug. 16, 1990 | Response to Initial Order of Assignment to HO; Request to Produce filed. |
| Aug. 16, 1990 | Notice of Appearance filed. |
| Aug. 15, 1990 | Notice of Substitution of Counsel and Response to Order Entered on 8-3-90 filed. |
| Aug. 08, 1990 | CC Letter to MMP from Randy L. Rubin (re: reassignement of attorney for Respondent) filed. |
| Aug. 03, 1990 | Initial Order issued. |
| Jul. 30, 1990 | Petition of Barry Stephen Yanks; Agency Denial Letter; Petitioner's First Request for Production of Documents; & Agency Referral Letter filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Nov. 18, 1994 | Agency Final Order | |
| Aug. 18, 1994 | Recommended Order | Mortgage broker did put deposit in escrow and failed to timely return when deal fell through; inappropriate closing charges and improper loan documentation. |
