STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BOYER MORTGAGE CORPORATION, )

)

Petitioner, )

)

vs. ) CASE NO. 92-2942

) [Licensure Application DEPARTMENT OF BANKING AND FINANCE, ) Case]

)

Respondent. )

) DEPARTMENT OF BANKING AND FINANCE )

)

Petitioner, )

)

vs. ) CASE NO. 92-2943

) [Licensure Discipline

FREDDIE Z. BOYER and BOYER ) Case]

MORTGAGE CORPORATION, )

)

Respondents. )

)

RECOMMENDED ORDER

Upon due notice, these causes came on for formal hearing on July 10, 1992 in Tallahassee, Florida, before Ella Jane P. Davis, a duly assigned Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Freddie Z. Boyer Freddie Z. Boyer, pro se

and 1234 Airport Road, Suite 214 Boyer Mortgage Corp. Destin, Florida 32541

For Department of Margaret S. Karniewicz, Esquire Banking & Finance Department of Banking and Finance

Suite 1302, The Capitol Tallahassee, Florida 32399-0350

STATEMENT OF THE ISSUES

The issue in (License) Case No. 92-2942: Whether or not the application for licensure as a correspondent mortgage lender filed by BOYER MORTGAGE CORPORATION should be granted or denied.

The issues in (Disciplinary) Case No. 92-2943: Whether or not any disciplinary action should be taken against the individual mortgage broker's license held by FREDDIE Z. BOYER and BOYER MORTGAGE CORPORATION for violating various sections of Chapter 494 F.S. pertaining to mortgage brokers and correspondent mortgage lenders.

PRELIMINARY STATEMENT

On April 13, 1992, the Department of Banking and Finance (DBF) notified Boyer Mortgage Corporation of the agency's intent to deny Boyer Mortgage Corporation's application for licensure as a correspondent mortgage lender. On April 15, 1992, the Department issued an Administrative Complaint against Freddie Z. Boyer and Boyer Mortgage Corporation. On April 29, 1992, Mr. Boyer, on his own behalf and on behalf of the corporation, requested an informal hearing on both the denial of the application and the Administrative Complaint. On May 17, 1992, after determining that the petition for informal hearing disputed material issues of fact, DBF transmitted the request to the Division of Administrative Hearings (DOAH) for the assignment of a hearing officer to conduct a formal hearing pursuant to Section 120.57(1) F.S.

By Order dated May 22, 1992, these two cases were consolidated and set for formal hearing on July 10, 1992. That order also charged the parties with developing an order of proof for the consolidated cases which would accommodate the cases' respective and different burdens of proof. The parties were unable to articulate an order of proof, so on the day of formal hearing, the cases were tried sequentially, with the disciplinary case going first.

At the close of the disciplinary case, [DOAH Case No. 92-2943], the parties stipulated that no additional evidence was necessary for the license application case, [DOAH Case No. 92-2942], and that all evidence and testimony from the disciplinary case would be adopted and incorporated into the licensing case for all purposes. Accordingly, a single recommended order has been entered.

At formal hearing, DBF presented the testimony of Freddie Z. Boyer, Chris Hancock and Rita Poff. DBF's Exhibits 1 through 13 were admitted into evidence. DBF-11 is the deposition of John M. Chancellor, Jr. Mr. Boyer testified on his own behalf and on behalf of Boyer Mortgage Corporation. Mr. Boyer's Exhibits 1 through 4 and Exhibit 6 were admitted into evidence.

No transcript of the hearing was provided and the parties were given 15 days from the date of hearing in which to submit their proposed recommended orders.

Both parties filed their proposals timely and all timely-filed proposed findings of fact have been ruled upon in the appendix to this recommended order pursuant to Section 120.59(2) F.S.

To the extent the items attached to Mr. Boyer's and Boyer Mortgage Corporation's July 27, 1992 post-hearing proposal were not admitted in evidence at the time of formal hearing, they are hereby struck. The unadmitted exhibits have not been considered.

FINDINGS OF FACT

1. The time frame material to both cases is November 1991 through January 1992. At all times material, and currently, Freddie Z. Boyer was licensed with DBF as an individual mortgage broker, but he was and is not currently formally associated with any licensed mortgage brokerage business, mortgage lender, or correspondent mortgage lender. Mr. Boyer was formerly associated with First Coastal Mortgage Corporation, Inc. (First Coastal) as its principal and qualifying broker. The foregoing facts are found despite Mr. Boyer's testimony that he considered himself associated with First Coastal at all times material

   and considered himself still associated with First Coastal as of the date of formal hearing. In making the foregoing findings of fact, the undersigned has not relied on Mr. Hancock's and Ms. Poff's testimony to the effect that they "had been told" that First Coastal no longer exists or went out of business; this was unsubstantiated hearsay. Nonetheless, Mr. Boyer's testimony is clear that he, personally, ceased to function as an individual mortgage broker for First Coastal in October 1991, after an internal dispute with the two other owners of First Coastal who hold/held two-thirds of the stock of First Coastal. Mr. Boyer was/is a one-third stockholder of First Coastal. Mr. Boyer also testified that he had used his individual mortgage broker license to apply for First Coastal's corporate mortgage broker or mortgage lender license (it is not clear which) and that such a license had been issued to First Coastal upon his application and that thereafter that license was converted to the name and use of his two other partners because he had withdrawn as qualifying broker for First Coastal. He has left his individual mortgage broker's license on record with First Coastal but admittedly was not brokering loans through First Coastal at any time material to the instant cases. Mr. Boyer further testified that he incorporated and commenced business operations of Boyer Mortgage Corporation on October 17, 1991 to originate, sell, service, and transfer residential mortgages in Florida. All of the exhibits in evidence involving solicitation of mortgage loans name Boyer Mortgage Corporation, not First Coastal, as the mortgage lender or as the entity making inquiries and list Freddie Z. Boyer as the loan officer or broker.

   
   

2. On December 27, 1991, DBF received an application from Boyer Mortgage Corporation for licensure as a correspondent mortgage lender. The application disclosed that Mr. Boyer is the President-Secretary of Boyer Mortgage Corporation. At formal hearing, Mr. Boyer confirmed this to be true and that he also owns one-third of Boyer Mortgage Corporation.

   
   

3. Question 7 on the application asks:

   
   

   Does the applicant have net worth of at least

   $25,000? (Documentation of net worth must be filed with this application. Audited financial statements prepared in accordance with generally accepted accounting principles by an independent certified public accountant are required.)

   
   

   This question was answered in the affirmative.

   
   

4. The application filed by Respondent Boyer on behalf of Boyer Mortgage Corporation was accompanied by an October 15, 1991 audit letter and financial statements to show that the corporation had the required $25,000 net worth.

   
   

5. The October 15, 1991 audit letter which was submitted with the application contained the alleged signature of John M. Chancellor, Jr., Certified Public Accountant (CPA). The audit letter and financial statements were prepared on letterhead stationery purportedly that of Mr. Chancellor and predated incorporation of the corporate applicant, Boyer Mortgage Corporation.

   
   

6. Mr. Chancellor testified by deposition that he did not conduct an audit of Boyer Mortgage Corporation and did not prepare the audit letter or financial statements which were submitted by Mr. Boyer and Boyer Mortgage Corporation with the corporation's correspondent mortgage lender application to DBF. There is no dispute on this issue. Mr. Boyer testified that he, personally, prepared the

   audit letter and financial statements and signed John M. Chancellor, Jr.'s name to the audit letter. He also admitted he never contacted Mr. Chancellor to receive permission to sign his name.

   
   

7. Mr. Boyer is a licensed CPA in the State of Florida. Although Mr. Boyer claimed at hearing that he had a current CPA business relationship with Mr. Chancellor which would permit Mr. Boyer to sign his "partner's" name to audits, Mr. Chancellor denied that any business relationship or any partnership existed between them as of the date of the audit, the financial statements, or the application for licensure by Boyer Mortgage Corporation. Although Mr. Chancellor admitted he had formed some type of CPA firm with Mr. Boyer in Louisiana in 1974 or earlier, Mr. Chancellor also testified that he, personally, had ceased to be licensed as a CPA in Louisiana in 1989. Mr. Chancellor has never been licensed as a CPA in Florida.

   
   

8. Upon the foregoing, it is found that Mr. Boyer's assertion that he believed he had the legal right to audit his own business (Boyer Mortgage Corporation) and to sign Mr. Chancellor's name to the audit and financial statements upon which Boyer Mortgage Corporation's application for Florida correspondent mortgage lender licensure was based is neither credible nor legally correct. The fact that Boyer and Chancellor apparently never actually ran any CPA business out of a common location and had only sporadically seen each other over the last several years renders incredible Mr. Boyer's protestations that he always had a legal right to sign a partner's name to anything. Assuming, arguendo, that Mr. Boyer did not have actual knowledge that Mr. Chancellor had ceased to be licensed as a CPA when he signed Mr. Chancellor's name to the audit and financial statements submitted with Boyer Mortgage Corporation's application for licensure, Mr. Boyer still was not excused at law or by the dictates of common business sense from making reasonable inquiry to determine that fact. When Mr. Chancellor ceased to be licensed as a CPA in 1989, that fact alone terminated any CPA association he had with Mr. Boyer as of that date, and it is not necessary for the undersigned to go further and unravel all the non-dispositive sub-issues raised herein concerning whether or not Mr. Boyer or another person forged Mr. Chancellor's signature on a 1974 partnership agreement for the CPA firm or whether or not Mr. Chancellor was bound by that agreement to give Mr. Boyer 30 days written notice of Mr. Chancellor's withdrawal from their Louisiana CPA firm.

   
   

9. The fact that Mr. Boyer and Mr. Chancellor may have had some other business relationship or operated out of some other corporation or partnership in the past is immaterial. Their other active business relationship also ended many years prior to the time frame and events relevant to this proceeding and has nothing to do with it.

   
   

10. Mr. Boyer's self-serving testimony that some CPA Board authorized him to sign Mr. Chancellor's name is mere hearsay upon which no finding of fact may be based.

    
    

11. Signing someone else's name in order to lead the DBF licensing authority to believe that an "independent certified public accountant" had audited Boyer Mortgage Corporation's financial statements when, in fact, Mr. Boyer himself merely "rubber stamped" his own work is clearly misleading and constitutes a material misstatement in connection with the application. Despite Mr. Boyer's protestations that generally accepted principles of CPA practice (GAAP) permit such camouflaging of the truth, no persuasive evidence to that effect was presented at formal hearing to rebut the clearly misleading nature of the materials themselves.

12. It is noted that the accuracy or falsity of the financial statements themselves was not proven at formal hearing, but the falsification of the licensure application by way of Mr. Boyer's deliberately misleading the licensing agency into believing independent CPA materials were being submitted when these materials were not independent at all has been clearly and convincingly proven.

    
    

13. During the period of November 1991 through January 1992, Boyer Mortgage Corporation and Mr. Boyer solicited and accepted approximately thirty-four applications for mortgage loans without Boyer Mortgage Corporation being licensed as a mortgage brokerage business, a mortgage lender, or a correspondent mortgage lender, and without Mr. Boyer being associated with First Coastal or any other mortgage brokerage business.

    
    

14. As previously noted, all applications in evidence show involvement of Boyer Mortgage Corporation; none show involvement of First Coastal. Also, Boyer Mortgage Corporation's application for correspondent mortgage lender was not even filed with DBF until December 27, 1991 (See, Findings of Fact 1-2 supra). It is further noted, however, that upon being warned by the Comptroller's Office that he could not do business, Mr. Boyer was cooperative and did not "close" thirty-three of these potential loans.

    
    

15. One loan was closed for Marc and Janice Gillard in November 1991, and Boyer Mortgage Corporation received an origination fee and a portion of the discount points therefor. Despite the prior warning from the Comptroller's Office, Mr. Boyer authorized one of his Boyer Mortgage Corporation subordinates to close the Gillard loan through another lending institution because "Mr. Gillard was a friend" and Mr. Boyer "did not want them to lose their home."

    
    

16. Boyer Mortgage Corporation and Mr. Boyer charged and received fees for credit reports and appraisals on two of the thirty-four loan applications. With regard to those fees, Mr. Boyer and his corporation were essentially only a conduit to appraisers and credit reporting services for small amounts of money. Perhaps $150, at most, was retained by Respondents. Although the evidence falls short of any fraud against any of the loan applicants during that three month period of time, Boyer Mortgage Corporation and Mr. Boyer were also providing good faith estimates to applicants, obtaining appraisals and credit reports, submitting invoices, requesting verification of deposits from banks, and requesting verification of employment on the mortgage loan applicants. As such, Boyer Mortgage Corporation was acting as a mortgage broker without a current active license and Mr. Boyer was acting as a mortgage broker without being associated with a mortgage brokerage business in contravention of statute.

    
    

17. The evidence, however, does not establish that either Respondent acted as a correspondent mortgage lender.

    
    

    CONCLUSIONS OF LAW FOR DOAH CASE NOS. 92-2942 and 92-2943

    
    

18. The Division of Administrative Hearings has jurisdiction over the subject matter of, and the parties to, both cases in this proceeding. See, Section 120.57(1) F.S.

    
    

19. DBF is the state agency charged with the administration and enforcement of Chapter 494, F.S., and the rules promulgated thereunder.

20. The Administrative Complaint in DOAH Case No. 92-2943 is not a model of clarity. In summation, it charges that:

    
    

    ... Respondent FREDDIE Z. BOYER has violated Sections 494.0033, 494.0072(j) and (p) [sic]; 494.0025(4)(b); 494.0041(j) [sic] F.S. by

    acting as a mortgage broker without being associated with a mortgage brokerage business.

    
    

    ...that the RESPONDENTS have violated Sections 494.0063; 494.0025(5); 494.0072(c),

    (j), and (p) [sic]; 494.0062(1)(c) F.S. and Rule 3D-40.250 F.A.C., by submitting an application for licensure as a correspondent mortgage lender, which Respondents falsely attested were audited financial documents created by an independent CPA.

    
    

    ... that the RESPONDENT BOYER MORTGAGE

    CORPORATION has violated Section 494.0072(j) and (k) [sic] F.S., by acting as a mortgage broker in this State without a current active license under Sections 494.006--494.0077 F.S.

    
    

    ... that the Respondent BOYER MORTGAGE CORPORATION has violated Sections 494.0025(3)--(5); 494.0072(p) [sic] F.S. by

    processing mortgage loan applications in expectation of compensation thereof.

    
    

    ... Each separate application for a mortgage loan set forth ... is considered a separate violation of Chapter 494 F.S.

    
    

21. The issue in license application Case No. 92-2942 is whether or not Mr. Boyer's signing John M. Chancellor's name to the audited financial statements/letter submitted with Boyer Mortgage Corporation's application for licensure rendered them false and the application thereby contained a material misstatement.

    
    

22. With regard to both cases, the following statutes and rule are controlling.

    
    

23. Section 494.001 F.S., provides in part:

    
    

    As used in Section 494.001 - 494.007, the term:

    
    

    * * *

    
    

    1. "Act as a correspondent mortgage lender" means to make a mortgage loan.

       
       

    2. "Act as a mortgage broker" means, for compensation or gain, or in the expectation of compensation or gain, either directly or indirectly, accepting or offering to accept an application for a mortgage loan,

       soliciting or offering to solicit a mortgage loan on behalf of a borrower, or negotiating or offering to negotiate the terms or conditions of a mortgage loan on behalf of a lender. [Emphasis supplied]

       
       

       * * *

       
       

       (13) "Mortgage brokerage business" means a person acting as a mortgage broker.

       
       

       * * *

       
       

       1. "Person" means an individual partnership, corporation, association, or other group, however organized.

          
          

       2. "Principal broker" means a licensee in charge of, and responsible for, the operation of the principal place of business and all branch brokers.

       
       

24. Section 494.0072 F.S., authorizes DBF to impose the following administrative penalties against mortgage lenders under the following circumstances:

    
    

    1. Whenever the department finds a person in violation of an act specified in subsection (2), it may enter an order imposing one or more of the following penalties against that person:

       
       

       1. Revocation of a license or registration.

          
          

       2. Suspension of a license or registration subject to reinstatement upon satisfying all reasonable conditions that the department specifies.

          
          

       3. Placement of the licensee or applicant on probation for a period of time and subject to all reasonable conditions that the department specifies.

          
          

       4. Issuance of a reprimand.

          
          

       5. Imposition of a fine in an amount not exceeding $5,000 for each count or separate offense.

          
          

       6. Denial of a license or registration.

       
       

    2. Each of the following acts constitutes a ground for which the disciplinary actions specified in subsection (1) may be taken:

       
       

       * * *

       (c) A material misstatement of fact on an initial or renewal application.

       
       

       * * *

       
       

       1. Failure to comply with any department orders or rule made or issued under the provisions of Section 494.001--494.0077.

          
          

          * * *

          
          

       2. Acting as a mortgage lender or correspondent mortgage lender without a current, active license issued under Section 494.006--494.0077.

       
       

       * * *

       
       

       (p) Failure to comply with, or violations of, any other provision of Section 494.001 - 494.0077.

       
       

25. Section 494.0025 F.S., provides in part: It is unlawful for any reason:

    * * *

    
    

    1. To act as a mortgage broker in this state without a current, active license issued by the department pursuant to Section 494.003 - 494.0043.

       
       

       * * *

       
       

    2. In any practice or transaction or course of business relating to the sale, purchase, negotiation, promotion, advertisement, or hypothecation of mortgage transactions, directly or indirectly:

       
       

       1. 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.

          
          

    3. In any matter within the jurisdiction of the department, to knowingly and willfully falsify, conceal, or cover up by a trick, scheme, or device a material fact, 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.

26. Section 494.0062 F.S., provides in part:

    
    

    1. The department shall issue an initial correspondent mortgage lenders license to any person who submits:

       
       

       * * *

       
       

       1. Audited financial statements, which document that the application has bona fide and verifiable net worth pursuant to generally accepted accounting principles of

       $25,000 or more, which must be continuously maintained as a condition of licensure;

       
       

27. Section 494.0063, F.S. provides:

    
    

    All audited financial statements required by Section 494.001 - 494.0077 must be prepared by an independent licensed certified public accountant. [Emphasis supplied]

    
    

28. Rule 3D-40.250, F.A.C., provides in part:

    
    

    1. Each licensee under 91-245, Section

       31-49, Laws of Florida,, shall document and verify the required net worth with audited financial statements, prepared in accordance with generally accepted accounting principles, by an independent licensed certified public accountant. [Emphasis supplied]

       
       

29. Section 494.0033, F.S., provides in part:

    
    

    1. Each natural person who acts as a mortgage broker for a mortgage brokerage business must be licensed pursuant to this section. To act as a mortgage broker, an individual must be an associate of a mortgage brokerage business. A mortgage broker is prohibited from being an associate of more than one mortgage brokerage business. [Emphasis supplied]

       
       

30. Section 494.0041 F.S., authorizes DBF to impose the following administrative penalties against mortgage brokers under the following circumstances:

    
    

    1. Whenever the department finds a person in violation of an act specified in subsection (2), it may enter an order imposing one or more of the following penalties against the person:

       
       

       1. Revocation of a license or registration.

       2. Suspension of a license or registration subject to reinstatement upon satisfying all reasonable conditions that the department specifies.

          
          

       3. Placement of the licensee, registrant, or applicant on probation for a period of time and subject to all reasonable conditions that the department specifies.

          
          

       4. Issuance of a reprimand.

          
          

       5. Imposition of a fine in an amount not exceeding $5,000 for each count or separate offense.

          
          

       6. Denial of a license or registration.

       
       

    2. Each of the following acts constitutes a ground for which the disciplinary actions specified in subsection (1) may be taken:

       
       

       * * *

       
       

       (c) A material misstatement of fact on an initial or renewal application.

       
       

       * * *

       
       

       1. Failure to comply with any department order or rule made or issued under Section 494.001 - 494.0077.

          
          

       2. Acting as a mortgage broker or mortgage brokerage business without a current, active license issued under Section 494.003 - 494.0043.

       
       

       * * *

       
       

       (p) Failure to comply with, or violation of, any other provision of Section 494.001- 494.0077.

       
       

31. The foregoing statutes and rule became effective October 1, 1991. (See Chapter 91-245 Laws of Florida). Mr. Boyer and Boyer Mortgage Corporation have asserted they are protected therefrom via a "grandfather clause," but have not cited any statute or shown that any such "protection" exists. Sections 494.003(3) F.S., pertaining to mortgage brokers, and 494.006(3) F.S., pertaining to mortgage lenders and correspondent mortgage lenders, specifically provide that it is unnecessary to negate any statutory exemptions and that the burden of establishing the right to any exemption is upon the party claiming the benefit of the exemption.

    
    

32. In DOAH Case No. 92-2943, the license discipline case, DBF bears the duty to go forward and the burden of proof is on DBF to show by clear and convincing evidence that Respondents Boyer Mortgage Corporation and Freddie Z.

    Boyer committed the violations alleged in the administrative complaint. See, Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

33. DBF has shown with the requisite proof that Mr. Boyer acted as a mortgage broker without being associated with a duly licensed mortgage brokerage business. At all times material, his association as a mortgage broker with First Coastal was terminated, even if he still owned stock in the First Coastal corporation, and Boyer Mortgage Corporation was not yet licensed either as a mortgage broker, a mortgage lender, or a correspondent mortgage lender. Mr. Boyer's argument, made at formal hearing, that his individual mortgage broker's license permitted him to act statewide at will as a mortgage broker prior to Boyer Mortgage Corporation becoming licensed as a correspondent mortgage lender is without merit. Mr. Boyer's assertion, in his post-hearing proposals, that he remained associated with First Coastal for all thirty-four of the mortgage loan applications discussed herein is likewise without merit. Section 494.0033, F.S., requires each natural person to be an associate of a mortgage brokerage business before acting as a mortgage broker and also prohibits an individual from being an associate of more than one mortgage brokerage business at any time. Pursuant to the prayer for relief of the Administrative Complaint, (see Conclusion of Law 20) Respondent Boyer is charged pursuant to Sections 494.0033 [requirement that a natural person as a mortgage broker be associated with a firm and associated with only one firm]; 494.0072(2)(j) and (p) [permits discipline pursuant to 494.0072(1) against mortgage lenders, not brokers, for failure to comply with DBF orders, rules and statutes]; 494.0025(4)(b) [prohibits fraud in connection with the purchase or sale of a mortgage loan] and 494.0041(2)(j) [permits discipline pursuant to Section 494.0041(1) of mortgage brokers, not mortgage lenders, for failure to comply with DBF orders or rules]. Upon the facts clearly and convincingly proven, Mr. Boyer is guilty of a violation of statutory Section 494.0033 F.S., but the agency may discipline a mortgage broker for violation of a statute only pursuant to Section 494.0041(2)(p) [failure to comply with, or violation of any other provision of Sections 494.001--494.0077 F.S.]. Although the agency failed to cite the correct statute subsections in the prayer for relief of its administrative complaint, it is concluded that Respondent Boyer was on notice of what the agency would attempt to prove and had adequate opportunity to defend against it and that Freddie Z. Boyer should be found guilty of violating Sections 494.0033, and 494.0041(2)(p) F.S. The corporation is not a "natural person," only a "person" by statutory definition.

    
    

34. DBF also has clearly and convincingly shown that both Respondents Mr. Boyer and Boyer Mortgage Corporation submitted audited financial statements that were admittedly prepared by Mr. Boyer and to which he appended Mr. Chancellor's signature so as to mislead the agency that the statements and audits were independent and that they conformed to generally accepted accounting principles (GAAP). Although Mr. Boyer is licensed as a Florida CPA, Section 494.0063 F.S. and Rule 3D-40.250, F.A.C., require that the audited financial statements in connection with these license applications be prepared by an independent CPA. Mr. Boyer could in no way be considered an independent for purposes of conducting an audit of a corporation of which he is one-third owner and is also President and Secretary. See, Rule 21A-21.001, F.A.C. defining "independence" of CPAs. Upon the facts, as clearly and convincingly proven, Freddie Z. Boyer and Boyer Mortgage Corporation violated Sections 494.0063, 494.0025(5), 494.0041(2)(c), (j), and (p), 494.0072(2)(c), (j) and (p) F.S. and Rule 3D-

    40.250 F.A.C. by submitting an application for licensure as a correspondent mortgage lender which Respondents falsely attested were audited financial documents created by an independent CPA. Boyer Mortgage Corporation, as the correspondent mortgage lender applicant, is subject to discipline under Sections

    494.0072(1) and (2)(c), (j), and (p) cited in the administrative complaint, but Freddie Z. Boyer is subject to discipline only as an individual mortgage broker pursuant to Sections 494.0041(1) and (2)(c), (j) and (p), which statutes were not cited in this part of the administrative complaint's prayer for relief.

    Nonetheless, there has been sufficient notice of charges and due process to discipline Freddie Z. Boyer under Sections 494.0041(1) and (2)(c), (j) and (p), as well as Sections 494.0072(2)(c), (j) and (p) F.S. and he should be found guilty thereof as well.

    
    

35. DBF has also clearly and convincingly shown that Boyer Mortgage Corporation has processed mortgage loan applications in expectation of compensation therefor, albeit only one of such applications resulted in a real estate transaction closing. See, Section 494.001(1) and (2) defining "acting as a mortgage broker" and "acting as a correspondent mortgage lender." Section 494.0073 F.S. provides, in pertinent part, that Sections 494.006--494.0077 "do not prohibit a mortgage lender from acting as a mortgage broker." Upon the express language of that statute and since Boyer Mortgage Corporation was unlicensed as a correspondent mortgage lender at all times material, it is concluded that Section 494.0073 F.S. does not protect Boyer Mortgage Corporation from being found guilty of violating Section 494.0025 F.S. and that it is subject to discipline pursuant to Sections 494.041(1) and (2) (p) F.S. The foregoing acts constitute violations of Sections 494.0025(3) and 494.0041(2) (k) and (p). Although the administrative complaint's prayer for relief only cited Section 494.0072(2)(p) instead of 494.0041(2)(p), it is concluded that such a flaw does not prohibit a conclusion of Boyer Mortgage Corporation's guilt under Section 494.0041(2)(p).

    
    

36. It is noted that some statutory violations were proven which were not named in the charging document and others which were named were not proven.

37. Sections 494.0041(1) and (2) and 494.0072(1) and (2) F.S. and Rule 3D-

40.250 F.A.C. constitute grounds for revoking the individual mortgage broker's license held by Mr. Boyer.

1. It is also noted that the agency has not affirmatively demonstrated that Respondents benefited by more than the few dollars not actually transmitted to other potential lenders, appraisers, or credit reviewers, except for the amount realized in the Gillard closing, and that there were extenuating circumstances associated with the Gillard closing. It also is noted that Respondents attempted some cooperation with the agency by not placing and closing other loans. Therefore, a fine of $15,000 in addition to revocation as requested by the agency is excessive and unreasonable for the penalty in Case No. 92-2943.

   
   

   CONCLUSIONS OF LAW APPLICABLE ONLY TO DOAH CASE NO. 92-2942

   
   

2. The burden of proof in a license application case is upon the applicant. See, Florida Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981). Herein, the parties adopted all of the evidence from DOAH Case No. 92-2943, the disciplinary case, and therefore all of the foregoing findings of fact and conclusions of law (except for the burden of proof) set out supra for DOAH Case No. 92-2943 are applicable to to DOAH Case No. 92-2942 as well.

   
   

3. Boyer Mortgage Corporation's audit and financial statements were neither proven accurate nor inaccurate, so Boyer Mortgage Corporation cannot prevail in the license application case for that reason alone. Also, DBF has

   affirmatively proven that there was a material misstatement with regard to the independence of the CPA performing the audit and signing the financial statement and that these documents do not meet generally accepted accounting principles (GAAP).

   
   

4. The foregoing findings of fact and conclusions of law constitute sufficient grounds for denying, in DOAH Case No. 92-2942, the application for licensure as a correspondent mortgage lender filed by Freddie Z. Boyer o/b/o Boyer Mortgage Corporation pursuant to Section 494.0072(1)(f) F.S.

RECOMMENDATION IN CASE 92-2943

It is RECOMMENDED that the Department of Banking and Finance enter a final order:

1. Finding Respondent Freddie Z. Boyer guilty of violating Sections 494.0033 and Section 494.0041(2)(p) and subject to discipline as provided in Section 494.0041(1) F.S.

   
   

2. Finding Respondent Freddie Z. Boyer, guilty of violating Sections 494.0063, 494.0025(5), 494.0041(2)(c), (j) and (p) and 494.0072(2)(c), (j) and

   (p) F.S. and Rule 3D-40.250 F.A.C. and subject to discipline pursuant to Section 494.0041(1) and 494.0072(1) F.S. and revoking his individual mortgage broker's license;

   
   

3. Finding the Respondent Boyer Mortgage Corporation, guilty of violating Section 494.0063, 494.0025(3) and (5), 494.0041(2) (k) and (p), 494.0072(2)(c) (j), and (p), and Rule 3D-40.250 F.A.C. and subject to discipline pursuant to Section 494.0041(1), 494.072(1) F.S. and ordering it to cease and desist all mortgage brokerage business.

RECOMMENDATION IN CASE NO. 92-2942

It is RECOMMENDED that the Department of Banking and Finance enter a final order denying the application for licensure as a correspondent mortgage lender filed by Boyer Mortgage Corporation.

DONE and RECOMMENDED this 29th day of September, 1992, at Tallahassee, Florida.

ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The De Soto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 25th day of September, 1992.

APPENDIX TO RECOMMENDED ORDER DOAH CASE NOS. 92-2942 and 92-2943

The following constitute specific rulings, pursuant to Section 120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF)

DBF's PFOF:

1-14 Accepted except to the degree they are unnecessary, subordinate or cumulative to the facts as found in the Recommended Order. The date in the PFOF has been corrected to correspond to the record.

Boyer and Boyer Mortgage Corp.'s PFOF:

Response to Post-hearing Order

1-2, 4-5 Accepted.

3, 6-7 Rejected as either not supported by the record or as unnecessary, subordinate, or cumulative to the facts as found in the Recommended Order.

1. Rejected as legal argument.

2. Rejected as not supported by the record and/or legalarguement.

Statement One This seems to be legal argument or

conclusions of law and has been treated as such without rulings pursuant to Sections 120.59(2) F.S.

Statement Two Rejected as statements of another state's

law, materials not in evidence, and misstatements concerning the content of John

M. Chancellor's deposition. Statement Three Rejected as legal argument.

COPIES FURNISHED:

Margaret S. Karniewicz, Esquire Department of Banking and Finance Suite 1302, The Capitol Tallahassee, Florida 32399-0350

Freddie Z. Boyer

Boyer and Boyer Mortgage Corporation

P. O. Box 5560

Destin, Florida 32540-5560

Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350

William G. Reeves General Counsel

Room 1302, The Capitol 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 cleast 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.

Docket for Case No: 92-002942

Orders for Case No: 92-002942