FILED JAN 23 2014 TERATWATER ———-_Docketed by_ ELL STATE OF FLORIDA IN THE MATTER OF: CASE NO.: 121779-14-AG GSS TITLE, LLC ADMINISTRATIVE COMPLAINT TO: GSS TITLE, LLC 1990 Main Street, Suite 750 Sarasota, FL 34236-8000 GSS TITLE, LLC c/o Richard Fee 1227 N, Franklin St. Tampa, FL 33602 GSS TITLE, LLC, license 1.D. #P065973, is hereby notified that the Chief Financial Officer of the State of Florida has caused to be made an investigation of your activities while licensed as a title insurance agency in this state, as a result of which it is alleged: GENERAL ALLEGATIONS 1. Pursuant to Chapter 626, Florida Statutes, GSS TITLE, LLC (“GSS TITLE”) is currently licensed in this state as a title insurance agency (4-12). 2. At all times pertinent to the dates and occurrences referred to herein, GSS TITLE is licensed in this state as a title insurance agency. 3, Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial _ Services has jurisdiction over your insurance license and appointments, 4. GSS TITLE is an active Florida company registered with the Department of State, Division of Corporations. COUNT I 5. The above general allegations are hereby re-alleged and fully incorporated herein by reference, 6. GSS TITLE advertised and/or marketed services to realtors. 7. GSS TITLE offered or caused to be offered free short sale processing services to homeowners, real estate agents, and/or brokers from 2010-2013. - . 8. At all times relevant to this Count, GSS TITLE performed short sale services for free on condition that it would be the party performing title and closing services on the transaction, 9. While conducting title insurance business, GSS TITLE offered these free short sale processing services to obtain referral of business and as an inducement to obtain title insurance business directly or through representatives of GSS TITLE. IT IS THEREFORE CHARGED that, GSS TITLE has violated or is accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of its licenses and appointments: (a) Section 626.954 1(1)(h)3a, Florida Statutes, which provides that no title insurer, or any member, employee, attorney, agent, or agency thereof, shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, as inducement to title ... any monetary consideration or inducement whatever. (b) — Section 626.844(5), Florida Statutes, which provides that it is unlawful to engage in unfair methods of competition or in unfair or deceptive acts or practices in the conduct of business, as prohibited under part IX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public or to be detrimental to the public interest. (c) Rule 690-186.003(11)(c), Florida Administrative Code, which provides that it is a violation for any title agency or agent to provide an ongoing or standing offer of gifts, compensation or special services to the same person or customer on a continuing basis as an inducement to referring title insurance transactions. COUNT II 10. The allegations in paragraphs 1-4 are hereby realleged and fully incorporated herein by reference. 11. The guiding principle of the Real Estate Settlement Procedure Act (RESPA) is to protect home buyers from material nondisclosures in settlement and to protect consumers from unnecessary settlement charges and abusive practices in the settlement process. ] 12. Pursuant to 24 C.F.R. Pt. 3500, the settlement agent is required to use the U.S. Department of Housing and Urban Development Settlement Statement (HUD-1) in every settlement involving a federally related mortgage loan in which there is a borrower and a seller. 13. The instructions for completing a HUD-1 are contained in 24 C.F.R. Pt. 3500, Appendix A. (Instructions). 14, GSS TITLE, on or about March 23, 2010, acted as settlement agent in the sale of residential property located on 8400 Topeka Circle, Port Charlotte, Florida. '12 U.S.C.A. § 2601(a) 15. The transaction involved a federally related mortgage loan and as part of the transaction, GSS TITLE prepared a HUD-1. 16. GSS TITLE utilized an obsolete version of the HUD-1 to complete the settlement transaction. 17, The instructions mandate that lines 1108-1110 are to be used for information regarding title insurance. 18. Per the HUD-1, line 1108, in the seller’s transaction, listed is a cost of $1020 for title insurance. 19, Per the HUD-1, line 1112, in the seller’s transactions, listed is a fee of $795 for exam and other core title services, 20. However, exam and other core title services are part of the premium on line 1108. 21, The HUD-1 was executed by the borrowers and sellers of the property. 22, Onor about March 22, 2010, GSS TITLE received funds in conjunction with the closing and settlement fees of the residence located on Topeka Circle, 23. GSS TITLE was compensated for its services as indicated in the HUD-land GSS TITLE’s file ledger. 24. GSS TITLE’s actions resulted in a financial loss to the lender and/or seller. IT IS THEREFORE CHARGED that GSS TITLE has violated or is accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of its licenses and appointments: (a) Section 627.711(2), Florida Statutes, defines premium as the charge, as specified by rule of the commission, that is made by a title insurer for a title insurance policy, including the charge for performance of primary title services by a title insurer ot title insurance agent or agency...” (b) Section 627.7711(1)(b), Florida Statutes, defines primary title services as determining insurability in accordance with sound underwriting practices based upon evaluation of a reasonable title search or a search of the records of a Uniform Commercial Code filing office and such other information as may be necessary, determination and clearance of underwriting objections and requirements to eliminate risk, preparation and issuance of a title insurance commitment setting forth the requirements to insure, and preparation and issuance of the policy. Such services do not include closing services or title searches, for which a separate charge or separate charges may be made. (c) . Section 626,8437(6), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to exhibit fraudulent or dishonest practices in the conduct of business under the license or appointment. (d) Section 626,8437(5), Florida Statutes, which provides that it is a violation to demonstrate lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by a license or appointment. COUNT III 25. The allegations in paragraphs 1-4 are hereby realleged and fully incorporated herein.by reference. 26. The guiding principle of the Real Estate Settlement Procedure Act (RESPA) is to protect home buyers from material nondisclosures in settlement and to protect consumers from unnecessary high settlement charges and abusive practices in the settlement process. 27. Pursuant to 24 C.F.R. Pt. 3500, the settlement agent is required to use the U.S. Department of Housing and Urban Development Settlement Statement (HUD-1) in every settlement involving federally related mortgage loan in which there is a borrower and a seller. 28, The instructions for completing a HUD-1 are contained in 24 C.F.R, Pt, 3500, Appendix A. 29, GSS TITLE, on or about March 26, 2010, acted as settlement agent in the sale of residential property located on 1227 Birchcrest Blvd., Port Charlotte, Florida, rial . 30. The transaction involved a federally related mortgage loan and as a part of the transaction, GSS TITLE prepared a HUD-1. 31. GSS TITLE utilized an obsolete version of the HUD-1 form to complete the settlement transaction. * 32. Per the HUD-1, line 1101, in the borrower’s and seller’s transactions, listed is the settlement or closing fee of $249. 33, Per the HUD-1, line 1112, in the seller’s transactions, listed is a fee of $955 for title services. 7 12US.CA, § 2601(a) 3 The instructions, including the HUD-1 form pertinent to this matter are embodied in 24 C.F.R, Pt. 3500, App. A., effective Jan. 16, 2009 through Aug. 8, 2011, GSS TITLE utilized an obsolete form and instructions that were compulsory until Jan. 16, 2009, 34. Title services are part of the settlement and closing fee on line 1101 of the HUD- 35. | The HUD-1 was executed by the borrowers and sellers of the property. 36. On or about March 26, 2010, GSS TITLE received funds in conjunction with the closing and settlement fees of the residence located on Birchcrest Blvd. 37. GSS TITLE was compensated for its services as indicated on the HUD-1 and GSS TITLE’s file ledger. 38, GSS TITLE’s actions resulted in a financial loss to the lender and/or seller. IT IS THEREFORE CHARGED that, GSS TITLE has violated or is accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of its licenses and appointments: (a) — Section 627.771 1(1)(a), Florida Statutes, defines closing services as services performed by a licensed title insurer, title insurance agent or agency, or attorney agent in the agent’s or agency’s capacity as such, including, but not limited to, preparing documents necessary to close the transaction, conducting the closing, or handling the disbursing of funds related to the closing in a real estate closing transaction in which a title insurance commitment or policy is to be issued. . (b) Section 626.8437(6), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to exhibit fraudulent or dishonest practices in the conduct of business under the license or appointment. (c) Section 626,8437(5), Florida Statutes, which provides that it is a violation to demonstrate lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by a license or appointment . ‘COUNT IV 39. The allegations in paragraphs 1-4 are hereby realleged and fully incorporated herein by reference. 40. During 2010, GSS TITLE maintained escrow account number 120137 with Landmark Bank of Florida. Bank statements and records from GSS TITLE’s accounts indicate that interest on clients’ escrow funds was transferred to GSS TITLE’s operating account. 41. GSS TITLE caused its escrow account to be subject to an automated overnight transfer of interest earned on the consumers’ escrow funds to GSS TITLE’s operating account. 42, GSS TITLE’s actions and activities were without the knowledge or consent of its _ consumers and are not in compliance with statutory requirements regarding escrow accounts. 43. The only acknowledgement of the parties that GSS TITLE would be receiving such interest is an “Addendum to HUD-1 Settlement Statement” acknowledged after the transfer had occurred, at closing, IT IS THEREFORE CHARGED that, GSS TITLE has violated or is accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of its licenses and appointments: (a) Section 626,8437, Florida Statutes, which provides that misappropriation, conversion, or unlawful withholding of moneys belonging to title insurers or insureds or others and received in conduct of business under the license or appointment, is a violation. (b) Section 626.8437(6), Florida Statues, which prohibits fraudulent or dishonest practices in the conduct of business under the license or appointment. (c) Section 626.561(1), Florida Statutes, which provides that all premiums, return premiums, or other funds belonging to insurers or others received by an agent, solicitor, or adjuster in transactions under his license shall be trust funds so received by the licensee in a fiduciary capacity; and the licensee in the applicable regular course of business shall account for and pay the same to the insurer, insured, or other person entitled thereto. (d) — Section 626.8473(2), Florida Statutes, which provides that all funds received by a title insurance agent... shall be trust funds received in a fiduciary capacity by the title insurance agent and shall be the property of the person or persons entitled thereto. (e) Section 626,8473(4), Florida Statutes, which provides that all funds received by a title insurance agent to be held in trust shall be immediately placed in a financial institution that is located within this state and is a member Of the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, These funds shall be invested in an escrow * account in accordance with the investment requirements and standards established for deposits _and investments of state funds in s. 17.57, where the funds shall be kept until disbursement thereof as properly authorized, (f) . Rule 690-186.008, Florida Administrative Code, which provides that a title insurance agent may not use, endanger, or encumber money held in trust without the permission of the owner of such money, given after full disclosure of the circumstances. WHEREFORE, GSS TITLE IS hereby notified that the Chief Financial Officer intends to enter an Order suspending or revoking your licenses and appointments as an insurance agent or to impose such penalties as may be provided under the provisions of Sections 626,611, 626.844, 626.8437, 626.8443, and 626.8457, Florida Statutes, and under the other referenced Sections of the Florida Statutes as set out in this Administrative Complaint. NOTICE OF RIGHTS You have the right to request a proceeding to contest this action by the Department of Financial Services (Department) pursuant to Sections 120.569 and 120,57, Florida Statutes, and Rule 28-106, Florida Administrative Code. The proceeding request must be in writing, signed by you, and must be filed with the Department within twenty-one (21) days of your receipt of this Notice. Completion of the attached Election of Proceeding form and/or a petition for administrative hearing will suffice as a written request. The request must be filed with Julie Jones, Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390. Your written response must be received by the Department no later than 5:00 p.m. on the twenty-first day after your receipt of this Notice. Mailing the response on the twenty-first day will not preserve your right to a hearing. FAILURE TO ENSURE YOUR WRITTEN REPONSE IS RECEIVED BY THE DEPARTMENT WITHIN TWENTY- ONE (21) DAYS OF YOUR RECEIPT OF THIS NOTICE WILL CONSTITUTE A WAIVER OF YOUR RIGHT TO REQUEST A PROCEEDING ON THE MATTERS ALLEGED HEREIN AND AN ORDER OF SUSPENSION OR REVOCATION WILL BE ENTERED AGAINST YOU. If you request a proceeding, you must provide information that complies with the requirements of Rule 28-106.2015, Florida Administrative Code. As noted above, completion of the attached Election of Proceeding form conforms to these requirements. Specifically, your response must contain: (a) Your name, address, and telephone number, and facsimile number (if any). 10 (b) The name, address, telephone number, facsimile number of your attorney or qualified representative (if any) upon whom service of pleadings and other papers shall be made. (c) A statement requesting an administrative hearing identifying those material facts that are in dispute. If there are none, the petition must so indicate, (d A statement of when you received this Notice of Intent to Issue Cease and Desist Order. (e) A statement including the file number of this Notice of Intent to Issue Cease and Desist Order. If a hearing of any type is requested, you have the right to be represented by counsel or other qualified representative at your expense, to present evidence and argument, to call and cross-examine witnesses, and to compel the attendance of witnesses and the production of documents by subpoena. If a proceeding is requested and there is no dispute of material fact, the provisions of Section 120.57(2), Florida Statutes, apply. In this regard, you may submit oral or written evidence in opposition to the action taken by the Department or a written statement challenging the grounds upon which the Department has relied. While a hearing is normally not required in the absence of a dispute of fact, if you feel that a hearing is necessary, one will be conducted in Tallahassee, Florida, or by telephonic conference call upon your request. However, if you dispute material facts which are the basis for the Department’s action, you must request an adversarial proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. These proceedings are held before a State Administrative Law Judge of the Division of Administrative Hearings. Unless the majority of witnesses are located elsewhere, the Department will request that the hearing be conducted in Tallahassee, Florida. 11 Failure to follow the procedure outlined with: regard to your response to this Notice may result in the request being denied. All prior oral communication or correspondence in this matter shall be considered freeform agency action, and no such oral communication or correspondence shall operate as a valid request for an administrative proceeding, Any request for an administrative proceeding received prior to the date of this Notice shall be deemed abandoned unless timely renewed in compliance with the guidelines as set out above. Mediation of this matter pursuant to Section 120.573, Florida Statutes, is not available. No Department attorney will discuss this matter with you until the response has been received by the Department. “DATED this 23 day of _ OU Wary 2014, Gregory Thomas Director, Agent & Agency Services CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished to: GSS Title, LLC, 1990 Main Street, Suite 750, Sarasota, FL 34236-8000 by U.S. Mail and GSS TITLE, LLC, c/o Richard Fee 1227 N. Franklin St., Tampa, FL 33602 by Certified Mail this23rd day of Sacanaat 2014. y ivision of Legal Services 200 East Gaines St. 612 Larson Building Tallahassee, Florida 32399-033 Florida Bar Number 30942 13

Docket for Case No: 14-001029