Judges: DIANE K. KIESLING
Agency: Department of Financial Services
Latest Update: Jun. 13, 1990
Summary: The issue is whether the licenses of the Respondents should be revoked or otherwise disciplined based on the acts alleged in the Administrative Complaint.Anticipation of compensation either direct or indirect, meets definition of mortgage broker. Acting as mortgage broker without a license.
88-5086STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
OFFICE OF THE COMPTROLLER, )
)
Petitioner, )
)
vs. ) CASE NO. 88-5086
)
EXPRESS FINANCIAL MORTGAGE ) SYSTEMS, INC., EXPRESS MORTGAGE ) CORPORATION, EXPRESS FINANCIAL ) GROUP OF FLORIDA, INC., JAMES C. ) SAUNDERS, and JAMES T. HINES, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was held in this case on March 23, 1990, in Tallahassee, Florida, before the Division of Administrative Hearings, by its designated Hearing Officer, Diane K. Kiesling.
APPEARANCES
For Petitioner: Paul C. Stadler, Jr.
Assistant General Counsel Office of the Comptroller The Capital, Suite 1302 Tallahassee, FL 32399-0350
For Respondent, James T. Hines, Pro Se James T. Hines: 2481 Arthurs Court
Marietta, GA 30062
For Respondents, Express Financial Mortgage Systems, Inc., Express Mortgage Corp., Express Financial Group of Florida, Inc., and
James C. Saunders: No Appearance STATEMENT OF ISSUES
The issue is whether the licenses of the Respondents should be revoked or otherwise disciplined based on the acts alleged in the Administrative Complaint.
PRELIMINARY STATEMENT
The Office of the Comptroller presented the testimony of Rita D. Poff and introduced Petitioners Exhibits 1-3 in evidence. James T. Hines presented his own testimony and had one exhibit admitted in evidence.
Until October 31, 1989, all the Respondents were represented by counsel. A Motion to Withdraw as Counsel for Respondents was filed on October 9, 1989, and was granted on October 31, 1989. In compliance with Rule 221-6.007(3), the Motion to Withdraw stated the addresses of the individual Respondents and was served on each. Copies of the Order granting the Motion to Withdraw and the Notice of Hearing issued on January 4, 1990, were mailed to each individual Respondent at the addresses provided by their former counsel and stated in the Administrative Complaint. Only one of these various documents were returned as undeliverable. The Notice of Hearing mailed to Express Mortgage Corporation was returned as having been refused by the addressee. Because the record contained no indication that the Respondents had no notice of the formal hearing, the hearing proceeded in the absence of the Respondents, except Dr. Hines.
No transcript was ordered by the parties. The Office of the Comptroller, Department of Banking and Finance, filed its proposed findings of fact and conclusions of law on May 14, 1990. Mr. Hines filed no proposed recommended order. James C. Saunders filed a seven page letter on May 31, 1990. The letter states that he had no notice of the hearing and it will be treated as a motion to reopen the case. The letter sets forth no good cause to reopen the case because the record contains no evidence that notice was returned except for the one notice that was refused. The request that the case be reopened is DENIED. Further, the letter also contains statements of fact and argument. To the extent that the statements of fact are not supported by the record, they are rejected. All timely filed proposed findings of fact and conclusions of law have been considered. A specific ruling on each proposed finding of fact is made in the Appendix attached hereto and made a part of this Recommended Order.
FINDINGS OF FACT
Express Financial Group of Florida, Inc., (EFGF) has never been licensed as a mortgage brokerage business pursuant to Chapter 494, Florida Statutes.
Express Financial Mortgage Systems- Inc., (EFMS) was first registered as a mortgage brokerage business on June 21, 1988, with registration NO. HB 133412124. James C. Saunders was the licensed principal broker. EFMS renewed its registration on September 1, 1988, and the registration is still active. Prior to the first registration of EFMS in Florida, a business also called Express Financial Mortgage Systems, Inc., with an address in White Plains, New York, operated in Florida using several unlicensed persons who are not parties to this action, specifically Heidi D. Clark, Rutherford Smith, Tom Quellhorst, and Matt Piazza.
Express Mortgage Corporation (ENC) was first registered as a mortgage brokerage business on May 9, 1988, registration NO. HB 592876630. The registration is still active subject to renewal by August 31, 1990.
James T. Hines first became licensed as a mortgage broker on January 12, 1988, license no. HA 252880288. He was a self-employed broker at 780 Bayou Drive, Destin, Florida, his home address. On May 9, 1988, Hines was licensed as the principal broker of EMC. Hines terminated his
registration with EMC on July 1, 1988. Effective July 11, 1988, Hines again became licensed as a self-employed mortgage broker. This license became inactive on September 1, 1989, because Hines failed to renew it by August 31, 1989. The license is still inactive.
James C. Saunders first became licensed as a mortgage broker on June 21, 1988, as the principal broker with EFMS. On November 14, 1988, Saunders also became the principal broker for EMC. The endorsements with both EFMS and EMC were terminated for failure to renew the licenses by August 31, 1989. On October 20, 1989, Saunders renewed his license as a self- employed broker. That license is still active.
At all times relevant to this case, Hines was also a licensed real estate broker with Express Listings, Inc. (Listings).
EFMS, EFG, EMC, and Listings all operated from office space at 1021 Highway 98 East, Gulfview Plaza, Destin, Florida.
On November 4, 1987, Clark, acting as representative of Express Financial Mortgage Systems, Inc., of White Plains, N.Y., signed a Customer Agency and Fee Agreement to assist Henry and Heidi Maclin in securing a mortgage loan with Cite Savings. A check for $1241.25 was written to Express Mortgage by Express Financial Mortgage Systems, Inc., of New York on January 27, 1988. While this check allegedly represented payment of a brokerage commission on the Maclin loan, no evidence was introduced to show that any of the parties named in this Administrative Complaint were involved in the Maclin loan or received any compensation from it.
On December 30, 1987, entities identified as Express Financial Systems or Express Financial Group were named as recipients of $660 brokerage fee on a mortgage loan for Carrie Moye. Again, no evidence was introduced to show that the parties in this case were involved in or received mortgage brokerage fees for the Moye mortgage loan. Listings was paid a real estate commission of $330 on the real estate portion of the transaction.
On March 1, 1988, Clark, acting as representative of Express Financial Group and Express Financial Mortgage Systems, Inc., of New York, agreed to assist William and Janice Bennett in seeking a mortgage loan from Prudential Home Mortgage Company. On the April 14, 1988, Settlement Statement, Express Financial Group was listed as being entitled to a $674.00 brokerage fee on the Bennett loan. Again, Clark and Express Financial Group are not parties to this case.
On March 23, 1988, Clark, as representative of Express Financial Group and Express Financial Mortgage Systems, Inc., of New York, agreed to assist Franklin and Priscilla Ford in securing a mortgage loan from Prudential Home Mortgage Company. Express Financial Group is shown as being entitled to receive a brokerage fee of $2,550.00 on the Ford loan. Again, no showing was made that any party to this case was involved in or received compensation from the Ford loan.
On March 22, 1988, James T. Hines signed a Customer Agency and Fee Agreement as representative to assist Jacqueline C. and William S. Ansley in securing a mortgage loan from Citisavings. The form which Hines signed is on letterhead of Express Financial Group, Inc., which is shown to include Express Listings Corporation, a licensed real estate brokerage firm, and Express Mortgage Corporation, a licensed mortgage brokerage firm. However, the form
also stated that the Ansleys agreed to allow Express Financial Mortgage Systems, Inc., of 1021 Highway 98 East, Suite I, Destin, Florida 32541, to receive mortgage commitments on their behalf.
The Ansley loan closed on April 21, 1988, and on April 26, 1988, Ansley wrote a check for $1,925.00 to Express Financial Group, but no competent evidence was introduced to show the purpose of this check. No evidence was introduced showing that any party to this case received any compensation or mortgage brokerage fee for the Ansley mortgage loan.
On December 29, 1987, Tom Quellhorst as a representative of Express Financial Group and Express Financial Mortgage Systems, Inc., of New York, agreed to assist William H. and Margaret C. Kinna in securing a mortgage loan from Prudential Home Mortgage Company. The February 5, 1988, Settlement Statement shows Express Financial Group to be entitled to a $1,260 brokerage fee for the Kinna loan. There is no showing that a brokerage fee was ever paid or that any party to this case was involved in the Kinna loan.
On December 1, 1987, Rutherford Smith, as representative of Express Financial Mortgage Systems, Inc., of New York, agreed to assist Robert Schonhut in securing a mortgage loan from Prudential Home Mortgage Company. A check dated January 29, 1988, from Express Financial Mortgage Systems, Inc., of New York, to Express Mortgage, Destin, for $126.63, allegedly for a quarter of a point of the Schonhut mortgage loan, was introduced into evidence. No evidence was presented that showed any involvement in or compensation received by any party to this case.
On February 8, 1988, Tom Quellhorst, as representative for Express Financial Group and Express Financial Mortgage Systems, Inc., of New York, agreed to assist Marion and Sylvia Howl and in securing a mortgage loan from Prudential Home Mortgage Company. The March 14, 1988, Settlement Statement shows Express Financial Group to be entitled to a brokerage fee of $1,239.75 for the Howland loan. There is no showing that any party to this case was involved in or received compensation for the Howland loan.
On January 22, 1988, James T. Hines signed a Customer Agency and Fee Agreement as representative for Express Financial Group, Inc., and Express Financial Mortgage Systems, Inc., of New York, to assist Tom and Sally Underwood in securing a mortgage loan from Prudential Home Mortgage Company. There is no showing that a loan was secured or a brokerage fee paid in connection with the Underwood agreement.
No competent evidence was introduced to show that James C. Saunders was connected with any of the transactions described above. Further, Hines denied ever soliciting for a mortgage loan or receiving any compensation for acting as a mortgage broker in connection with any of the transactions described above.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to and subject matter of these proceedings. Section 120.57(1), Florida Statutes.
Each of the five Respondents are charged with violating Section 494.055(1)(1) by acting as a mortgage broker or mortgage brokerage business without current, active license or registration. Hines is charged with violating
Section 494.055(1)(q) by failing to comply with or violating any provision of Chapter 494.
As relevant to this proceeding, Section 494.02 contains the following definitions:
"Mortgage broker" means any person who for compensation or gain, or in the expectation of compensation or gain, either directly or indirectly negotiates, acquires, sells, or arranges for, or offers to negotiate, acquire, sell, or arrange for, a mortgage loan or mortgage loan
commitment. .
"Mortgage brokerage business" means any person which employs a mortgage broker or mortgage brokers, or which, either directly or indirectly, makes, negotiates, acquires, sells, or arranges for, or offers to make, negotiate, acquire, sell, or arrange for, a mortgage loan or mortgage loan commitment for compensation or gain, or in the expectation of compensation or gain.
Further, Hines is charged with violating Section 494.055(1)(q) by violating or failing to comply with Section 494.0393(2) which states:
(2) Every registered mortgage brokerage business and self-employed licensee shall transact business from a principal place of business in the state. The registration shall specify the address of such principal place of business and shall be conspicuously displayed therein. . .
It is concluded that EFMS acted as a mortgage brokerage business on the Ansley loan and was represented in that transaction by Hines. Hines also acted as a mortgage broker in connection with the Ansley loan and he did so from 1021 Highway 98 East, Suite I, Destin, Florida, an address different than the place of business listed on his self-employed broker's license. It is further concluded that Hines acted as a mortgage broker when he signed the agreement with Underwood.
There is no competent evidence to show that EMC or EFGF acted as mortgage brokerage businesses without being licensed. The unlicensed entities which operated as mortgage brokerage businesses were Express Financial Mortgage Systems, Inc., of New York and Express Financial Group. Inc., neither of which are parties to this case.
Further, there is no competent evidence that Saunders acted as a mortgage broker. Not one of the transactions described in the Findings of Fact is tied to Saunders except by uncorroborated hearsay.
While Hines did not receive compensation from his involvement in the Ansley loan and Underwood agreement, he expected to receive compensation for his work either at the time of the transactions or later indirectly by being permitted to open and operate a licensed mortgage brokerage business in Destin,
Florida, as a part of the umbrella organization of Express Financial Group or Express Financial Mortgage Systems, Inc., of New York. The anticipation of compensation, either directly or indirectly, is sufficient to meet the definition in Section 494.02(3).
RECOMMENDATION
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Office of the Comptroller, Department of Banking and
Finance, enter a Final Order and therein:
Dismiss all charges against Express Mortgage Corporation, Express Financial Group of Florida, and James C. Saunders.
Find Express Financial Mortgage Systems, Inc., guilty of violating Section 494.055(1)(1) in connection with the Ansley loan.
Find James T. Hines guilty of violating Section 494.055(1)(1) in connection with the Ansley loan and guilty of violating Section 494.055(1)(q) by failing to comply with Section 494.0393(2).
Revoke the mortgage brokerage business license of Express Financial Mortgage Systems, Inc.
Impose a $500 fine on James T. Hines and place his mortgage broker license on probation for one year.
DONE and ENTERED this 13th day of June, 1990, in Tallahassee, Florida.
DIANE K. KIESLING
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 13th day of June, 1990.
APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-5086
The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted in this case.
Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Department of Banking and Finance
Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of
Fact which so adopts the proposed finding of fact: 1(1); 2a(2); 2b(3); 3a-d(4); 4a-d(5); and 6c(7).
Proposed findings of fact 5a, 6a-c, 7a & b, 1Ob, 11b, 12b, 13b, and 15 are rejected as being unsupported by the competent, substantial evidence.
Proposed findings of fact 5b, 8a & b, 9a & b, 10a, 11a, 12a, 13a, and 14 are subordinate to the facts actually found in this Recommended Order.
COPIES FURNISHED:
James T. Hines 2481 Arthurs Court
Marietta, GA 30062
Paul C. Stadler, Jr. Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, FL 32399-0350
James C. Saunders
60 Indian Bayou Drive Destin, FL 32541
Express Financial Mortgage Systems, Inc. 1021 Highway 98 East, Suite A
Destin, FL 32541
Express Financial Group of Florida, Inc. 1021 Highway 98 East, Suite A
Destin, FL 32541
Murai, Wald, Biondo, Matthews & Moreno, P.A. Registered Agent for Express Mortgage Corp. 9th Floor Ingraham Building
25 South Second Avenue Miami, FL 33131
Honorable Gerald Lewis Comptroller, State of Florida The Capitol
Tallahassee, FL 32399-0350
William G. Reeves General Counsel The Capitol
Plaza Level, Room 1302 Tallahassee, FL 32399-0350
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE
DIVISION OF FINANCE
OFFICE OF THE COMPTROLLER,
Petitioner, Administrative Proceed-
ing No. 1207-F-7/88
vs.
EXPRESS FINANCIAL MORTGAGE SYSTEMS, INC., EXPRESS MORTGAGE CORPORATION, EXPRESS FINANCIAL GROUP OF FLORIDA INC., JAMES C. SAUNDERS AND JAMES
HINES,
(DOAH Case No. 88-5086)
Respondents.
/
FINAL ORDER
The State of Florida Department of Banking and Finance, Division of Finance (hereinafter Department), being author- ized and directed to administer and enforce the Mortgage Brokerage Act, Chapter 494, Florida Statutes, hereby enters this Final Order regarding Respondents, Express Financial Mortgage Systems, Inc., Express Mortgage Corporation, Express Financial Group of Florida, Inc., James C. Saunders, and James T. Hines.
PRELIMINARY STATEMENT
The Department adopts and incorporates by reference the Preliminary Statement contained on pages 2-3 of the Recommended Order entered in this proceeding as if set forth at length.
FINDINGS OF FACT
The Department adopts and incorporates by reference the Findings of Fact contained in paragraphs 1-18 of the Recommended Order as if set forth at length with the minor exception that the Department rejects the factual findings in paragraph 11 that, "Again, no showing was made that any party to this case was involved in the Ford loan," as the Ford's Customer Agency and Fee Agreement form also stated that the Fords agreed to allow Express Financial Mortgage Systems, Inc. (hereinafter EFMS), of 1021 Highway 98 East, Suite I, Destin, Florida 32541, to receive mortgage commitments on their behalf. (PX2, Exhibit 20).
CONCLUSIONS OF LAW
The Department adopts and incorporates by reference the Conclusions of Law found in pages 8-10 of the Recommended Order and in paragraphs 2 and 3 of
the Recommendation on pages 10 and 11 of the Recommended Order with the minor exception that the Department concludes that EFMS also acted as a mortgage brokerage business on the Ford loan without being registered in violation of Fla. Stat. 494.055(1)(l).
FINAL ORDER
Based upon the foregoing findings of fact and conclusions of law, it is ORDERED:
The mortgage brokerage registration of ExpressFinancial Mortgage Systems, Inc., is revoked;
James T. Hines is placed on probation for one year on the condition that he not act as a self-employed principal mortgage broker or be an ultimate equitable owner of a Chapter 494 registrant;
James T. Hines is fined $500 payable to the Depart- ment within 30 days of the entry of this Final Order; and
The charges alleged in the Administrative Complaint with Notice of Rights issued on September 15, 1988, are dismissed against Express Mortgage Corporation, Express Financial Group of Florida, Inc., and James C. Saunders.
DONE and ORDERED in Tallahassee, Florida this 18th day of September, 1990.
GERALD LEWIS, as Comptroller of the State of Florida and Head of the Department of Banking and Finance.
NOTICE OF RIGHTS TO JUDICIAL REVIEW
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEED- INGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE (1) COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DEPARTMENT OF BANKING AND FINANCE AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN THIRTY (30) DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
Copies furnished to:
James T. Hines
2481 Arthurs Court
Marietta, GA 30062
Paul C. Stadler, Jr. Assistant General Counsel Office of the Comptrollor The Capitol, Suite 1302 Tallahassee, FL 32399
James C. Saunders
60 Indian Bayou Drive Destin, FL 32541
Express Financial Mortgage Systems, Inc.
1021 Highway 98 East, Suite A
Destin, FL 32541
Murai, Wald, Biondo, Matthews & Moreno, P.A.
Registered Agent for Express Mortgage Corp.
9th Floor Ingraham Building
25 South 2d Avenue Miami, Florida 33131
Docket for Case No: 88-005086
Orders for Case No: 88-005086
| Issue Date |
Document |
Summary |
|
Sep. 28, 1990 |
Agency Final Order
|
|
|
Jun. 13, 1990 |
Recommended Order
|
Anticipation of compensation either direct or indirect, meets definition of mortgage broker. Acting as mortgage broker without a license.
|
