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FLORIDA REAL ESTATE COMMISSION vs. PHILLIP A. BANKS AND ABODE REALTY, INC., 87-002681 (1987)
Division of Administrative Hearings, Florida Number: 87-002681 Latest Update: Jan. 11, 1988

Findings Of Fact Respondents Phillip A. Banks (Banks) was at all times Material hereto a licensed real estate broker in the State of Florida, having been issued license number 0324865. Banks was the qualifying broker for Respondent, Abode Realty, Inc., which was at all tines material hereto registered as a real estate broker in the State of Florida, having been issued license number 0232550. On August 24, 1985, Respondents received in escrow $2,200 from Patricia Turner, as a deposit on her agreement to purchase a home located at 1300 Westview Drive, Miami, Florida. Pertinent to this case, the agreement was conditioned on Ms. Turner's ability to qualify for and obtain a first mortgage, insured by the FHA or guaranteed by the VA, in an amount not less than $40,837. Ms. Turner's application for the subject mortgage was duly submitted to American International Mortgage Company (American International). That application was, however, denied because the property did not appraise at the contract price. Following the denial of her application for mortgage financing on the first house, Ms. turner entered into an agreement through Respondents, dated November 20, 1985, to purchase another home located at 2501 Northwest 155 Terrace, Miami, Florida. At that time, Respondents returned to Ms. Turner the $2,200 deposit on the first contract, and she in turn deposited such sums with Respondents as a deposit on her agreement to purchase the second home. Pertinent to this case, the agreement was conditioned on Ms. Turner's ability to qualify for and obtain a first mortgage, insured by the FHA or guaranteed by the VA, in an amount not less than $39,867. The agreement further provided: When this contract is executed by the Purchaser and the Seller and the sale is not closed due to any default or failure on the part of the Purchaser, Purchaser shall be liable to Broker for full amount of brokerage fee. The agreed brokerage fee was 7 percent of the purchase price, or $2,800. The second home was owned by Independent Properties, Inc., a corporation owned, at least in part, by Banks. This ownership interest was, however, fully disclosed to Ms. Turner at the time the agreement was executed. Ms. Turner's application for the mortgage on the second home, as with the first home, was processed by American International. While that loan was being processed, Ms. Turner contracted to purchase and purchased, unbeknown to Respondents or American International, a different home (the third home). When a American International discovered this fact, Ms. Turner's application was disapproved because she lacked sufficient resources to afford two homes and because she could not comply with the FHA regulation which required that the buyer reside in the home. But for Ms. Turner's purchase of the third home, she would have qualified for the mortgage contemplated by the second agreement. Ms. Turner entered into the agreement to purchase the third home on or about January 20, 1986, and her application for the mortgage on the second home was disapproved by American International on April 1, 1986. In the interim, on January 30, 1986, Ms. Turner secured a loan of $1,000 from Banks on the pretext that her uncle had been charged with a criminal offense and the monies were needed to secure his release. The proof established, however, that Ms. Turner had no intention of fulfilling her agreement to purchase the second home, and that the pretext she used to secure $1,000 from Banks was but a subterfuge to secure the return of some of her deposit. Ms. Turner made no demand for the return of any of her deposit monies. She did, however, file a civil action in January 1987 to recover such monies. That action was dismissed on motion of Respondents, but faced with the threat of continued litigation Respondents offered to settle with her for $1,100. Ms. Turner rejected Respondents' offer, and commenced a second civil action. That action resulted in the entry of a final judgment in her favor for $1,100 and costs. Respondents are ready, willing and able to satisfy such judgment, and have attempted to satisfy such judgment through Ms. Turner's counsel without success.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final order be entered dismissing the Administrative Complaint. DONE and ENTERED this 11th day of January 1988, in Tallahassee, Florida. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 FILED with the Clerk of the a Division of Administrative Hearings this 11th day of January 1988. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate Legal Section 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Brian M. Berman, Esquire SMITH & BERMAN, P.A. 2310 Hollywood Boulevard Hollywood, Florida 33020 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Darlene F. Keller Acting Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Florida Laws (1) 475.25
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DEPARTMENT OF BANKING AND FINANCE vs. RICHARD V. ZALOUDEK, 75-001586 (1975)
Division of Administrative Hearings, Florida Number: 75-001586 Latest Update: Feb. 07, 1977

Findings Of Fact Petitioner presented one witness that had audited the books and records of Respondent. This audit revealed that Respondent had handled some 350 transactions involving mortgages and that on approximately 50 of those transactions the Respondent had withheld a commission more than authorized by statute or department rule. The witness testified to only a few of those transactions shown on his work sheet attached to a deposition admitted into evidence. Thereafter Respondent stipulated that if asked about all of the other transactions shown on the work sheet, this witness, and the auditor who performed the balance of the audit, would testify the same for those other transactions, viz. that the worksheet figures were extracted from the records of Respondent and the authorized commissions shown thereon were computed using either the statutory method or the rule method and that both methods would give the same results. These figures show that the Respondent overcharged the borrower on approximately 50 transactions as alleged. On approximately 2/3 of the transactions the funds were remitted to a master broker, and on the other 1/3 the funds were remitted to the borrower. Further, that the notes and mortgages were received by Respondent for delivery to his client some 4 to 6 weeks after he had disbursed the money from his trust account. Upon expiration of Petitioner's case Respondent renewed his motions for dismissal and further moved for dismissal on the grounds that the funds for a majority of the transactions involved were remitted to another broker, and for those remitted directly to the borrower (developer) the charges were not excessive but those actually proposed by the borrower-developer. This motion was denied and Respondent then testified in his own behalf. Richard Zaloudek percent has been a licensed mortgage broker since 1960 and is also a licensed real estate broker. He has been in the mortgage brokerage business since 1948. Prior to obtaining his mortgage broker's license he dealt in FHA mortgages which were exempt. He renewed his license automatically each year until September, 1975 when he received no response from the Comptroller's Office to his application for renewal. Since a valid license is required to operate as a mortgage broker, Respondent has been unable to so act since the expiration of his license in September, 1975. When Respondent was approached by the master broker representing Mortgage Development Corporation to sell mortgages for it, he questioned the legality of such transactions. He was presented with a copy of the opinion of the office of the Comptroller, Division of Securities, dated January 10, 1973. This indicated that the notes secured by mortgages that he was being solicited to sell complied with the statutes and rules affecting securities. Thereafter he advertised in the news media that he had these high interest paying notes secured by mortgage for sale. When a client came into his office to invest he would take their investment, deposit same in his trust account, and then forward to the master broker or borrower the deposit less the commission the borrower and master broker had authorized him to deduct. Thereafter the note and mortgage was mailed to Respondent who presented it to the investor. As a result of many people losing money in investments in promissory notes secured by mortgages on land, newspaper coverage of various facets of the land development industry became widespread. In several cases the various mortgage brokers, such as Respondent herein, were named in these articles in the newspapers; and press reports were issued by the Comptroller's Office that certain licenses, including that of Respondent, had been revoked. Because of the adverse publicity, not only did Respondent's mortgage brokerage business drop off and stop completely when his license was not renewed in September, 1975, but also his business as a real estate broker suffered. Respondent's testimony that he lost real estate listings totaling some two million dollars was not rebutted. Nor was his testimony that this represented a loss of some $70,000 in income.

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DEPARTMENT OF BANKING AND FINANCE vs. ASPEC, INC., 86-002971 (1986)
Division of Administrative Hearings, Florida Number: 86-002971 Latest Update: May 08, 1987

The Issue The issue presented for decision herein is whether or not Respondent unlawfully refused to honor a subpoena issued by Petitioner as is more particularly set forth hereinafter in detail.

Findings Of Fact Respondent, ASPEC, Inc., is a Florida Corporation engaged in the business of Mortgage Brokerage in Florida. Shanker S. Agarwal is President of ASPEC, Inc. Mr. Agarwal has been licensed by the Department as a Mortgage Broker since May 24, 1985 and currently holds License No. HB-0016435 which expired, by its terms, August 31, 1986. On February 14, 1986, the Department received a consumer complaint about ASPEC, Inc., and pursuant to its investigation of Respondent's brokerage activities, the Department sent a certified letter to ASPEC, Inc., on March 21, 1986, to the attention of President Agarwal requesting that an appointment be scheduled with its Area Financial Manager, Division of Finance, Paul Richman. The returned service of the referenced letter was postmarked April 14, 1986. President Agarwal, or an officer from Respondent failed to schedule an appointment with Paul Richman as requested. On May 22, 1986, the Department served Respondent a subpoena duces tecum on May 23, 1986, by its then Financial Examiner Analyst I, Kevin J.C. Gonzales. (Petitioner's Exhibit 1, pp 9-10.) The subpoena issued to President Agarwal requested that the custodian of records, an officer, director, employee or member of ASPEC, Inc. appear before Paul Richman on May 30, 1986, at 9:00 a.m. at the Department's Miami Office and produce all books, papers and documents (of ASPEC, Inc.) from its inception to April 29, 1986, so that the Department could determine ASPEC's compliance with Chapter 494, Florida Statutes. President Agarwal, or a representative on behalf of ASPEC, Inc., failed to appear at the date and time specified on the subpoena, or thereafter, at the designated place to produce the requested documents. Respondent has challenged on constitutional and other procedural grounds, the Department's authority to conduct an investigation of Respondent as a licensee under the Mortgage Brokerage Act. Respondent's challenges were determined to be either beyond the authority of the Hearing Officer or lacked merit, and rulings to this effec were made during the course of the hearing.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: Petitioner enter a Final Order suspending the Mortgage Brokers License No. HB-0016435 issued to Respondent for a period of (1) year. RECOMMENDED this 8th day of May 1987, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 8th day of May 1987. COPIES FURNISHED: Miles J. Gopman Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399 Mr. Shanker S. Agarwal, President ASPEC, INC 6912 Stirling Road Hollywood, Florida 33024 Ronald P. Glantz, Esquire 320 Southeast 9th Street Fort Lauderdale, Florida 33316 Hon. Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0305 =================================================================

Florida Laws (2) 120.57120.68
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DEPARTMENT OF BANKING AND FINANCE vs FREDERICK R. ZAUN, 90-000743 (1990)
Division of Administrative Hearings, Florida Filed:Boca Raton, Florida Feb. 05, 1990 Number: 90-000743 Latest Update: Jul. 02, 1990

Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: For the period September 1, 1987 through August 31, 1988, Respondent was registered as the principal mortgage broker for the company AFM. Respondent's license number, HT 0010066, and street address, 3200 N. Military Trail, Suite 300, Boca Raton, Florida 33431, were included on the mortgage broker business registration renewal form executed and submitted by Respondent to the Department. AFM's mortgage brokerage registration number was HY0019932. Ronald Mims performed an examination of the AFM business records for a period which included September 1, 1987 through August 31, 1988. One of the loan transactions examined by Mr. Mims pertained to a borrower/applicant named Frazer. The records maintained by AFM related to this transaction contained a good faith estimate, dated April 15, 1988, that was prepared and executed by Darlene M. Mannarino, as the AFM office manager. The file did not contain a copy executed by the borrower. The good faith estimate described in paragraph 2 provided, in part: In compliance with Chapter 494 of Florida Statutes; Lender/Broker hereby acknowledges receipt of an application fee in the amount of $ 300.00 , and agrees that this will be applied towards the settlement charges. If an acceptable commitment is not obtained or loan closing does not occur for any reason, this deposit will not be refunded. A copy of a check in the amount of $300.00 payable to "American Funding1 from Frazer Distributors was included in the AFM-Frazer transaction file. Also included was a loan application executed by Respondent as the AFM interviewer. None of the documents contained in the Frazer file dIsclosed the limits and conditions of recovery from the Mortgage Brokerage Guaranty Fund (MBGF). Such documents did not disclose the escrow/trust agent if other the payee, American Funding. AFN did not have an escrow/trust account. The good faith estimate for the Frazer transaction provided for an estimated charge of $225.00 for an anticipated appraisal fee. Peter H. Sayles performed an appraisal for the Frazer transaction. The total amount billed to AFM by Sayles for he Frazer account was $350.00. Mr. Sayles was not paid for this work nor for an additional $100.00 due to him from AFM for a Roberts account. Mr. Sayles obtained a default judgment for these amounts in summary claims. Mr. Mims also obtained copies of records maintained by AFM related to a transaction for a borrower/applicant named Neger. A good faith estimate executed by the borrower on October 27, 1987, contained the same language as described in paragraph 3 above. The amount of the Neger deposit, however, was $250.00. The file did not contain a copy of the good faith estimate executed by AFM. The file held a copy of a check dated October 27, 1987, from Daniel Neger to "American Funding" in the amount of $250.00. The Neger loan application was signed by Darlene/Sherin Reynolds as the interviewer for AFM. The Neger documents maintained by AFM did not disclose the conditions or limits for recovery from the MBGF. Additionally, the documents did not disclose the escrow/trust agent for the transaction if other than the payee (American Funding). At the time of this transaction AFM did not maintain an escrow/trust account. At all times material to this case, Darlene Mannarino was not licensed by the Department. Except as noted above, Ms. Mannarino's duties and the type of payment she received for the work she rendered on behalf of AFM are not established by the record in this case. AFM did not maintain a mortgage journal in connection with the loan transactions it processed. Instead, AFM retained records in a card index file for loan applications. The records maintained in the card index file were incomplete and, consequently, inadequate to allow Mr. Mims to track the status and completion of loan transactions processed by AFM.

Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Banking and Finance, Division of Finance, enter a final order placing the Respondent licensee on probation for a period of two years. Further, it is recommended that the Department impose an administrative fine against Respondent in the amount of $1000.00. DONE and ENTERED this 2nd day of July, 1990, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH 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 2nd day of July, 1990. APPENDIX TO CASE NO. 90-0743 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT: Paragraphs 1 and 2 are accepted. Paragraph 3 is rejected as contrary to the weight of the evidence or unsupported by the record. Paragraph 4 is accepted. Paragraph 5 is accepted but is irrelevant. Paragraph 6 is accepted. Paragraph 7 is accepted. Paragraph 8 is rejected as unsupported by the weight of the evidence. While the Department established that Sayles was not paid for appraisal services rendered, that does not imply nor establish that Respondent misused funds. Whether funds exist from which Sayles could be paid, is unknown. All that is known is that AFM, for whatever reason, did not pay Sayles. Paragraph 9 is rejected as unsupported by the weight of the evidence. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: The first sentence of paragraph 1 is accepted. The balance of the paragraph is rejected as unsupported by the evidence or irrelevant. Paragraph 2 is rejected as irrelevant or contrary to the weight of the credible evidence. Paragraph 3 is accepted but is irrelevant. Paragraph 4 is rejected as contrary to the weight of the evidence or argument. Paragraph 5 is rejected as contrary to the weight of the evidence or argument. COPIES FURNISHED: Eric Mendelsohn Assistant General Counsel Office of the Comptroller Ill Georgia Avenue, Suite 211 West Palm Beach, Florida 33401-5293 Jerald A. Goldstein JERALD A GOLDSTEIN, P.A. 3200 North Military Trail Suite 300 Boca Raton, Florida 33431 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 Mr. William G. Reeves General Counsel The Capitol Plaza Level, Room 1302 Tallahassee, Florida 32399-0350

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DEPARTMENT OF BANKING AND FINANCE, DEPARTMENT OF REVENUE, AND DEPARTMENT OF LOTTERY vs. HOWARD E. SAMPLE, 88-002858 (1988)
Division of Administrative Hearings, Florida Number: 88-002858 Latest Update: Sep. 15, 1988

Findings Of Fact At all times pertinent to the allegations contained herein, Respondent was a licensed Mortgage Broker and the principal broker for Mortgage Associates of Countryside, located at 2623 Enterprise Rd., Clearwater, Florida. The Department was and is the state agency charged with regulating the activities of mortgage brokers in this state. In September, 1987, Andrew Grosmaire and Kevin Gonzalez, compliance officer and financial examiner, respectively, for the Department, pursuant to a complaint from Mark Snyder, conducted an examination of Respondent's affairs as they pertained to his operation as a mortgage broker. During the survey, which covered the period from August, 1986 through August, 1987, Mr. Grosmaire and Mr. Gonzalez examined between 50 and 60 loan files which had culminated in loan closings. In addition, they examined loan files which did not result in closings, bank account records, and other of Respondent's miscellaneous records. In order for an appropriate audit of a closed loan file to be conducted, it is imperative that the loan closing statement be included. Without it, the examiner cannot accurately determine what, if any, closing costs the borrower actually paid and if closing costs paid were consistent with those disclosed by the broker on the Good Faith Estimate Form at the initial interview. Of the closed loan files reviewed, these closing statements were missing from seven files. Respondent admits that several closed loan files did not have the required closing costs statement form enclosed. He attributes this, however, to the failure of his processor, an assistant, to place the closing statement in the file. They were not presented at hearing or thereafter. The investigators examined the Good Faith Estimate Forms in those files which culminated in loans and found that the form utilized by the Respondent failed to contain language, required by statute, which summarized the limits and conditions of recovery from the Mortgage Brokerage Guaranty Fund. Respondent contends that the pertinent statutory section was not in existence at the time he was engaged in mortgage brokerage activities. This was found to be not true. The Act became effective July 1, 1986 and the files surveyed were from the period August, 1986 through August, 1987. Examination of the Good Faith Estimate Forms used by the Respondent in each of the cases which culminated in loan closing revealed that Respondent consistently underestimated closing costs. This resulted in the borrowers generally paying higher closing costs than was initially disclosed to them. On -loans applied for by Mr. and Mrs. Snyder, Mr. Iyer, and Mr. Toland. Respondent redistributed loan points to himself in an amount higher than that which was agreed to by the parties. In the Toland case, Mr. Toland agreed to pay a 1% loan origination fee in the amount of $996.00. The settlement statement dated approximately 2 months later reflected that Toland paid Respondent a loan origination fee of $1,128.00 in addition to a 1% ($664.00) loan discount fee to the lender. This latter mentioned discount fee was not disclosed in advance to Mr. Toland on the estimate form nor was the excess loan origination fee charged. It should be noted here that a second Good Faith Estimate Form, dated nine days after the original, reflecting a 3% loan origination fee, was found in the file. Though signed by Respondent, this second form was not signed by the borrower as required. It cannot, therefore, serve to support Respondent's claim that he advised the Tolands of the higher cost by this second form. There is no showing that the Tolands were aware of it. In the Iyer case, the estimate form dated September 19, 1986 reflected a points and origination charge of $1,332.50 which is 1% of the mortgage loan amount of $133,250.00. The Iyers were subsequently approved for a mortgage in the amount of $145,600.00. The closing statement dated March 6, 1987, almost six months later, reflects that the Iyers paid a 2% loan origination fee of $2,740.00 to Mortgage Associates and a load discount fee of $685.00 to the lender. Here again the Respondent claims that a second cost estimate form reflecting a 2% point and origination fee of $2,912.00 was subsequently executed by the Iyers. However, this second form, found in Respondent's files, is undated and fails to reflect the signature of either Respondent or the Iyers. It cannot, therefore, serve as proof that the Iyers were made aware of the change. It does appear, as Respondent claims, that the bottom of the second form, (here, a copy) , was excluded from the copy when made, but there is no evidence either in the form of a signed copy or through the testimony of the Iyers, that they were aware of the change. Consequently, it is found that the Iyers had not been made aware of the second estimate and had not agreed to pay as much as they did, in advance. As to the Snyder closing, both Mr. Snyder and Respondent agree that it was their understanding at the time the loan was applied for, that Respondent would attempt to obtain a lower interest rate for them than that which was agreed upon in the application and in the event a lower rate was obtained, Respondent's commission points would remain the same as agreed upon in the brokerage agreement. In that case, as Respondent points out, his commission is based on the mortgage amount, not the interest rate, and he would be entitled to the agreed upon percentage of the loan face amount regardless of the interest rate charged by the lender on the loan. The Snyders had agreed to a 1% commission to Respondent plus a 1% loan origination fee to the lender. When the lender agreed to lend at par, without an origination fee, Respondent appropriated that 1% to himself, thereby collecting the entire 2% called for in the application. This was improper. Respondent's claim that it is an accepted practice in the trade is rejected. The Snyders initially made demand upon the Respondent for reimbursement of that additional 1% and ultimately had to hire an attorney to pursue their interests. Respondent subsequently made a $400 partial reimbursement payment of the amount owed but nothing further notwithstanding the fact that the Snyders ultimately secured a Judgement in Pinellas County Court against him for $1,082.52 plus interest, attorney's fees and costs. As a result, the Florida Mortgage Brokerage Guarantee Fund will reimburse the Snyders for their loss. According to the investigators, the Snyders Toland, and Iyer files, in addition to the problems described, also reflected that Respondent received payments for other items which should have gone into an escrow account. These included such things as credit reports and appraisal fees. The Department requires that any money received by a broker other than as commission, be placed in the broker's escrow account pending proper disbursement. Respondent did not have an escrow account. Mr. Gonzalez looked at Respondent's overall operation, including closed files, in an attempt to correlate between income and outgo to insure that Respondent's operation was in compliance with the statute. In addition to his search for an escrow account, Mr. Gonzalez also examined Respondent's "Loan Journal" which by statute is required to contain an entry for each transaction in each loan. The purpose of this journal is to provide a continuing record to show when each item in the loan processing was accomplished. In Mr. Gonzalez' opinion, the Respondent's journal was inadequate. It contained repeat and conflicting entries for specific items which hindered the investigators' ability to determine an audit trail. In addition, all required information was not put in the journal in complete form in each account. In the opinion of the investigators, the Respondent's violations were significant in that they made it impossible for the Department to determine compliance with statutes and Department rules and inhibited the compliance examination. All in all, Respondent's way of handling his accounts, his failure to maintain an escrow account, and his unauthorized increase in commission income, all indicated his actions were not in the best interest of his clients. The investigators concluded that clients funds were not being handled properly and that the purpose of Chapter 494, Florida Statutes, to protect the consumer, was not being met. In Mr. Gonzalez' opinion, Respondent's method of business constituted incompetence as a mortgage broker and "possibly" fraudulent practice. It is so found. Both Mr. Gonzalez and Mr. Grosmaire indicated they had extreme difficulty in attempting to locate Respondent after the complaint was filed by Mr. Snyder, in order to conduct their examination. They finally located him at a site different from that which appeared in the records of the Department. Respondent contends that the Department had been notified in writing within the required time, of his change of location when he filed a notice of fictitious name. He contends that after filing his notice of name change, he received no response from the state but took no action to inquire whether the change had been made. In any case, his current address was in the phone book and had the agents chose to look there, they would have found him. Respondent contends that the good faith estimates required by the statute are just that, an estimate, and that actual figures may vary from and exceed these estimates. This is true, but there is a procedure provided whereby the broker is to notify the client of a change in advance and if the change exceeds a certain amount, it may constitute grounds for voiding the contract. In paragraph 7 of the complaint, Petitioner alleges that Respondent used a form for the estimates which failed to contain a statement defining the maximum estimated closing costs. Review of the statement offered herein reflect this to be a fair analysis. However, Respondent claims that certain items cannot be predicted accurately in that some companies charge more than others for the same item and it was his practice to insert in the estimate portion of the form a "worst case scenario." However, at no time did he address in his form what could be the maximum a prospective purchaser might be expected to pay. Respondent "doesn't like" the total picture painted by the investigators concerning his operation. He claims it is cot a fair and accurate representation. In many cases, he claims, he expended funds on behalf of clients in excess of that he received in either commission or reimbursement and even though he may have received more than entitled in some cases, it "evens out over a period of time." Though this may be so, it is no way to do business. The state requires the keeping of accurate records and, just as the broker should not be required to assume responsibility for other than his own misconduct, neither should the client be required to pay more than is his legal obligation. Respondent professes to know the mortgage business and he resents having his qualifications as a mortgage broker questioned. In his opinion, he has trained himself well and has acted in good faith on the basis of the information available to him at the time. He ignores the impact of the Judgement of the court in the Snyder matter because he feels it was "unilateral." He believes the law is designed to protect the client and he wants to know who protects the broker. It is for that very reason, he contends, that fees paid in advance are not refundable. Mr. Sample feels the Department should be more informative to the brokers and get the governing regulations updated more quickly. Respondent cherishes his license and claims he needs it to make a living. He went out of business once before, several years ago, because of bad business conditions, (the reason he uses for not complying with the court order), but did not declare bankruptcy because he wanted to go back into business and pay off the judgements against him. Though he has been back in business for several years, he has failed to make any effort to pay off any of his former creditors even though in his former operation, he improperly tapped his escrow account for other business expenses.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Respondent, Howard E. Sample's license as a mortgage broker in Florida be revoked. RECOMMENDED this 15th day of September, 1988 at Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this day of September, 1988. APPENDIX TO RECOMMENDED ORDER IN CASE NUMBER 88-2858 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Insofar as Petitioner's submission refers to testimony of a witness, that is considered as a proposed finding of fact. FOR THE PETITIONER; Accepted and incorporated herein & 3. Accepted and incorporated herein 4. & 5. Accepted and incorporated herein Accepted and incorporated herein & 8. Accepted and incorporated herein Rejected as contra to the evidence A conclusion of law and not a finding of fact & 11a Accepted and incorporated herein Accepted Accepted and incorporated herein Accepted Accepted and incorporated herein - 18. Accepted 19. - 21. Accepted and incorporated herein Accepted & 24. Accepted and incorporated herein 25. & 26. Accepted and incorporated herein Accepted &-29. Accepted 30. - 34. Accepted and incorporated herein FOR THE RESPONDENT: Nothing Submitted by way of Findings of Fact COPIES FURNISHED: Elise M. Greenbaum, Esquire Office of the Comptroller 400 West Robinson St. Suite 501 Orlando, Florida 32801 Howard E. Sample 2465 Northside Drive Apartment 505 Clearwater, Florida 34621 Honorable Gerald Lewis Ccmptroller, State of Florida The Capitol Tallahassee, FL 32399-0350 Charles L. Stutts, Esquire General Counsel Department of Banking and Finance Plaza Level, The Capitol Tallahassee, FL 3 2399-0350

Florida Laws (1) 120.57
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DIVISION OF FINANCE vs WILLIAM H. HUGHES MORTGAGE BROKER, INC., AND WILLIAM H. HUGHES, 94-005114 (1994)
Division of Administrative Hearings, Florida Filed:Shalimar, Florida Sep. 15, 1994 Number: 94-005114 Latest Update: Sep. 28, 1995

Findings Of Fact Respondent William H. Hughes was adjudicated guilty of perjury and sentenced on November 11, 1993. This adjudication was at least peripherally related to a mortgage loan he brokered which had closed on June 21, 1989. Mr. Hughes was deposed concerning the loan on December 20, 1991, in which deposition he lied. He was indicted on May 27, 1993 and pled guilty to perjury on September 3, 1993. At all times material, William H. Hughes held individual mortgage broker license number MB 262740745. He is a Respondent herein because he was convicted of perjury. DBF was immediately notified concerning Mr. Hughes' perjury conviction. The agency did not file its amended disciplinary action until July 22, 1994. It may be inferred that there was an original complaint to amend, but its date is not of record. The agency's chief witness testified that the agency did not do an immediate field audit of Mr. Hughes' business upon notification, did not file an immediate cease and desist order against his mortgage brokerage activities, and has at no time considered Mr. Hughes continuing to operate as a mortgage broker to be an imminent threat or danger to consumers. (TR 113-116) Apparently, periodic DBF field audits since the amended administrative complaint was referred to DOAH also have not caused DBF to move to expedite the instant case or take any emergency action. Mr. Hughes operated as a sole proprietorship, license number MBB 591623417, from 1968 until May 17, 1993. The loan at issue was closed June 21, 1989. The deposition that gave rise to the perjury occurred on December 20, 1991. The plea was September 3, 1993. The adjusdication of guilt was November 11, 1993. The sole proprietorship license was current until August 31, 1994. The sole proprietorship is a Respondent in this cause because its license was in effect at all times material. On May 17, 1993, Respondent Hughes converted his sole proprietorship to a corporation in which he was sole stockholder, President, and qualifying broker with license number MB 262740745. Janeen Davis was Vice President. This corporate entity was known as, "William H. Hughes Mortgage Broker, Inc.," license number MBB 593113739. On May 27, 1993, Respondent Hughes was indicted. On September 3, 1993, he entered a guilty plea to perjury. The corporation of which he was sole principal continued to operate until September 23, 1993, when the stock was transferred to James Etheredge as sole stockholder, with Respondent Hughes as qualifying broker. Corporate mortgage brokerage license MBB 593113739, continued in effect until January 12, 1994. This corporation is a Respondent herein because its license was in effect at the time of Mr. Hughes' guilty plea and adjudication of guilt. On November 17, 1993, James Etheredge applied for a corporate mortgage brokerage license in the name of the "new" corporation, "William H. Hughes Mortgage Broker, Inc.," owned exclusively by Etheredge, with Janeen Davis as qualifying broker instead of Respondent Hughes. On November 23, 1993, Respondent Hughes was adjudicated guilty of perjury and sentenced. On January 12, 1994, a new corporate mortgage broker license, number MBB 593113739-001, was issued to the new corporate entity. Respondent Hughes continued to work for the new firm as a mortgage broker. This corporate license, number MBB-593113739- 001, was renewed September 1, 1994 and is current through August 31, 1996. That licensed corporation is not a Respondent herein and DBF has stipulated that it has no charges or evidence against it. (TR 19-21; 47-48; 50). In 1989, William Neufeld had come to Respondent Hughes seeking a mortgage loan for a condominium located at B-801 Grand Mariner, Destin, Florida. Sugar Sands Development Corporation was purportedly selling the condominium to Neufeld. The purported purchase price was approximately eight hundred thousand dollars ($800,000). Appraisals were provided to Respondent Hughes by the Seller to verify the value of the property. Respondent Hughes forwarded Neufeld's mortgage loan application to Carteret Savings Bank, which then accepted the loan. During this period of time, Carteret regularly called for a review appraisal for every loan, regardless of who did the original appraisal. Carteret regularly ordered a review from a different appraisal company to make sure that property valuation was true and accurate. It is inferred that Carteret performed its own separate appraisal on the B-801 Grand Mariner condomimium as it did in every other case. The parties to the loan brokered by Respondent Hughes were Sugar Sands Development Corporation as Seller, William Neufeld as Purchaser, and Carteret Savings Bank as Lender. Carteret Savings Bank funded the mortgage for the condominium after its own investigation and upon agreed terms. Respondent Hughes personally brokered the mortgage loan between William Neufeld and Sugar Sands Development Corporation, which was funded by Carteret Savings Bank. He received a $20,475 commission therefor. His commission amount was based upon points, which was in no way remarkable in the mortgage business. William Neufeld subsequently defaulted on the loan. At the time of the transaction, Respondent Hughes knew that the condominium was owned by an entity named Altus Bank prior to its transfer to Sugar Sands Development Corporation. On December 20, 1991, Respondent Hughes was deposed in a civil action resulting from Neufeld's default, Case No. 91-30398-RV, Carteret Savings Bank, F.A., v. First American Title Insurance Co., Inc., et al., in the United States District Court for the Northern District of Florida, Pensacola Division. In his deposition, Respondent Hughes testified as follows: Q: When, if ever, did you find out an entity by the name of Altus Bank was involved in these transactions? A: I don't know if -- to my knowledge, I did not know -- Altus wasn't involved in our transaction. We never dealt with Altus at all. So, to my knowledge, I don't know if I knew Altus was even involved in this unit until after this had already closed, because here again we were presented a contract of sale, we dealt directly with our customer, the buyer and really never had an occasion to even deal with the seller. * * * Q: You did not know, you had not heard any rumors, you had no indication whatsoever that Altus Bank had any interest in this unit at any time prior to the FBI coming to talk to you a year ago? A: No. I think that's the first time I knew that Altus was involved. Respondent Hughes was subsequently indicted on May 27, 1993 in Case No. 93-03069-01/RV, United States v. William H. Hughes, in the United States District Court for the Northern District of Florida, Pensacola Division. The indictment contained nine felony counts relating to an alleged "flip transaction" on the subject condominium involving Altus Bank, Sugar Sands Development Corporation as "straw man", and William Neufeld, the purpose of which was to artificially inflate the condominium's real property value and obtain an inflated loan amount of approximately $800,000 in loan proceeds for property truly valued at only approximately $385,000. The indictment alerted Carteret Savings Bank, which has since gone out of business, and other lending institutions to audit Respondent Hughes' transactions with them and to otherwise institute quality control reviews of loans he had placed with them. No discrepancies or dishonest dealings of any kind were uncovered by these institutions. On September 3, 1993, Respondent Hughes pled guilty to one count of engaging in perjury in violation of 18 U.S.C. Section 1623, based exclusively upon his deposition testimony quoted supra. The remaining eight felony counts were dismissed. These counts were the counts alleging that Mr. Hughes knew of the "flip transaction" aspects of the loan. Exhibit P-9 shows the foregoing to have been a plea bargain which encompassed evidentiary factors. It was not merely a "plea of convenience." At formal hearing herein, Respondent Hughes admitted that knowing the question in the deposition, he gave the wrong answer. He has accepted responsibility for that wrong answer. However, he credibly denied any knowledge that a flip transaction was intended. He explained that he had understood that the loan amount was determined upon independent evaluations and appraisals which included projected renovation costs to be expended to conform the condominium to the needs of the Purchaser, Mr. Neufeld. On November 23, 1993, a federal judgment was entered against Respondent Hughes. Pursuant to that judgment, Respondent Hughes was adjudicated guilty of violating 18 U.S.C. Section 1623 by engaging in perjury. He was ordered to pay a special assessment of $50.00; to pay $1,724.50 in juror fees; was placed on probation for a term of three years; and was placed on home detention for a period of six months. Respondent Hughes' probation is not scheduled to end until November 1996. Respondent Hughes has continued to practice as a mortgage broker without interruption during the eighteen months since his conviction and is currently employed as a mortgage broker by William H. Hughes Mortgage Broker, Inc., the firm reconstituted with Mr. Etheredge as the sole stockholder and Janeen Davis as its qualifying agent as of January 12, 1994. See, supra. Respondent Hughes has practiced his profession since 1968 (27 years) with only this one bad incident on his record. Respondent Hughes continues to enjoy a good reputation in his wider mortgage brokerage business community, although the reputation testimony herein is diminished by the fact that many of those who have dealt with him and who have expressed reputation opinions to the witnesses who testified were not aware of his perjury conviction or its circumstances. Respondent Hughes' reputation for truth and veracity and for fair dealing in the mortgage brokerage community as it currently exists within the Florida Panhandle has remained "good" and "very good" since knowledge of his perjury conviction has become known in that community. Two mortgage brokers, two employees of lending institutions, one attorney and one bank officer testified as fact witnesses that they were willing to deal with Mr. Hughes as a mortgage broker in the future, despite their knowledge of his perjury conviction. Two of these persons were formerly employed by Carteret Savings Bank and were fully aware of all circumstances of his criminal case. DBF's only expressed reason for requesting license revocation instead of other permissible disciplinary penalties was its perception that the perjury in this case was directly related to the transaction of mortgage brokerage business.

Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Banking and Finance enter a final order that: Finds Respondent Hughes individually, license MB 262740745, is guilty of the charged offense; Assesses an administrative fine against Respondent Hughes individually for $3,000, payable within 10 days of entry of the final order; and Places Respondent Hughes on probation until November 30, 1996, termination of probation to be conditioned upon his successful completion of his federal sentence; his practicing during probation under the supervision of a broker approved by DBF, and his being subject during this probation to unannounced DBF audit and review of all his transactions; and further providing that any violation of the final order, any discrepancy in his accounts, or any violation of Chapter 494 F.S. during his probationary period would subject him to immediate and summary revocation of his license. RECOMMENDED this 29th day of June, 1995, at Tallahassee, Florida. ELLA JANE P. DAVIS 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 29th day of June, 1995. APPENDIX TO RO 94-5114 The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: 1-8, 24-26 are covered in FOF 1-8 as necessary. Otherwise accepted but not adopted. 9-20, 22-23 Accepted, except that unnecessary, subordinate and/or cumulative evidence has not been adopted. 21, 27-31 Rejected as conclusions of law or legal argument, not proposed findings of fact Respondent's PFOF: 1-7 are introductory and labelled "Statement of the Case." They are covered within the "Preliminary Statement" of the Recommended Order. 8-17, 20-21, Accepted except that unnecessary, subordinate 23, 25-27 and/or cumulative evidence has not been adopted. 18, 24 Rejected as a conclusion of law, not a proposed finding of fact 19 Irrelevant 22 Accepted only as modified and covered in FOF 27-29 COPIES FURNISHED: Elise M. Greenbaum Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 J. Ladon Dewrell, Esquire Post Office Box 1510 Fort Walton Beach, Florida 32541 Honorable Robert Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Harry Hooper General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350

USC (1) 18 U.S.C 1623 Florida Laws (3) 120.57120.68494.001
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DAVID L. PIERCE vs. DEPARTMENT OF BANKING AND FINANCE, 76-001753 (1976)
Division of Administrative Hearings, Florida Number: 76-001753 Latest Update: Apr. 29, 1977

Findings Of Fact 1. On January 8, 1975, the United States District Court, District of Delaware, entered a "judgment and probation/commitment order," finding petitioner guilty of violating Title 18, United States Code, Sections 1010 and 371. These charges involved, inter alia, making, passing, uttering and publishing false statements and forged instruments in connection with the obtaining of mortgage insurance under the provisions of the National Housing Act. Petitioner was fined $2,500.00 and sentenced to serve three years imprisonment, the remainder to be suspended after six months and petitioner to be placed on probation for the remaining thirty months. On or about July 9, 1976, petitioner applied to respondent for registration as a mortgage solicitor. For the reason that petitioner was found guilty as described in paragraph one above, respondent determined that petitioner did not meet the proper qualifications to be licensed and issued its notice of intent to deny said license. In his answer and request for a hearing, petitioner admitted the material factual allegations of the complaint. Petitioner did not appear and therefore offered no evidence in his own behalf.

Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that petitioner's application for registration as a mortgage solicitor be DENIED. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 13th day of April, 1977. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of April, 1977 COPIES FURNISHED: Mr. David L. Pierce 891 West Tropical Way Plantation, Florida 33317 Richard E. Gentry, Esquire Assistant General Counsel Office of the Comptroller The Capitol Tallahassee, Florida 32304 Joseph M. Ehrlich Deputy Director Division of Finance Department of Banking and Finance 335 Carlton Building Tallahassee, Florida 32304 Comptroller Gerald A. Lewis The Capitol Tallahassee, Florida 32304

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OFFICE OF COMPTROLLER vs. DIKO INVESTMENTS, INC., 86-003282 (1986)
Division of Administrative Hearings, Florida Number: 86-003282 Latest Update: Nov. 30, 1987

The Issue The central issue in this case is whether the Respondents are guilty of the violations alleged in the Amended Administrative Complaint; and, if so, what penalty should be imposed.

Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: The Department of Banking and Finance, Division of Finance, is charged with the responsibility of administering the provisions of Chapter 494, Florida Statutes. At all times material to the allegations in this case, Diko Investments, Inc. ("Diko") conducted business as a mortgage broker in Palm Beach County, Florida. At all times material to the allegations in this case, Dieter Kolberg ("Kolberg") was an officer, director, and acted as principal mortgage broker for Diko. Kolberg passed the mortgage broker's examination on May 28, 1985. Diko was issued a license as a mortgage broker with Kolberg as its principal broker on June 26, 1985 (license NO. HB-16568) Prior to May 28, 1985, Diko ran advertisements soliciting investors for mortgage opportunities. These ads included Kolberg's home telephone number. Prior to May 28, 1985, Kolberg/Diko entered into a business relationship with Michael D. Cirullo, a licensed mortgage broker, to "co-broke" mortgage transactions. Pursuant to their agreement, Cirullo represented the borrower/mortgagor while Kolberg obtained and represented the lender/mortgagee. Kolberg and Cirullo solicited and negotiated at least two loans prior to May 28, 1985. Kolberg acted in expectation of being paid as a mortgage broker. Cirullo remitted 50 percent of the commissions earned on these transactions to Diko. Diko stationery included the phrase "Licensed Mortgage Bankers." Neither Diko nor Kolberg has been licensed as a "mortgage banker." In August and September of 1985, investors, Marcel and Ida Barber, responded to a Diko advertisement which offered a 16 percent interest mortgage loan secured by prime residential real estate. The Barbers were interested in a safe, high interest yielding investment and requested more information from Diko. On September 23, 1985, Kolberg wrote to the Barbers to outline the following business policies of Diko: The first objective of the Diko lending program was "The Safety of the Investor's Capital." Any investment was to be secured by a mortgage on prime residential real estate clear of all liens with the exception of a first mortgage where a second mortgage would be given. Investors would be issued mortgagee title insurance to insure against loss due to defects in title to the mortgaged property. Investors would be issued fire and hazard insurance to cover any losses in the event of fire or storm. Subsequent to the receipt of the aforesaid letter, the Barbers decided to invest $25,000 in a mortgage through Diko/Kolberg. This initial transaction proceeded satisfactorily and the objectives addressed in paragraph 10 above were met. In late December, 1985, the Barbers advised Kolberg that they would be willing to invest an additional $50,000 in early January, 1986. The Barbers expected the transaction to be handled in the same manner as their prior investment through Diko. After reviewing two or three loan proposals, the Barbers chose to invest in a loan to Tony Medici/Automatic Concrete, Inc. The loan was to be secured by a second mortgage on property at 713-717 "L" Street, West Palm Beach, Florida. The "L" Street property consisted of a 24-unit apartment complex and an adjacent laundry facility. Kolberg accompanied the Barbers to view the property. During discussions with the Barbers regarding the proposed investment, Kolberg made the following false material representations: That the property had a high occupancy; That rental payments were guaranteed or subsidized by a government program; That the asset-to-debt ratio for the property was acceptable; and That a proposed expansion of the laundry facility would further enhance the security of the loan. Financial statements of the borrower (Medici/Automatic Concrete, Inc.) did not include all obligations against the "L" Street property. Diko/Kolberg did not give the Barbers an accurate or complete statement of the financial condition of the "L" Street investment. Kolberg knew the information on the statement was incomplete. Diko/Kolberg did not disclose to the Barbers the high rate of crime in the area which compromised the security of the "L" Street investment. Kolberg knew of the crime problem in the area. Diko/Kolberg did not disclose to the Barbers that foreclosure proceedings had been instituted against the "L" Street property. Kolberg knew of the foreclosure action as well as the delinquency on other obligations. Kolberg did not disclose to the Barbers that he represented, as trustee, a Kolberg family company which would directly benefit from the Barber loan. The Barber loan would satisfy a mortgage held by Kolberg, as trustee, on the subject property, which mortgage was in default and in the process of foreclosure (the Ropet Anlagen foreclosure). Kolberg did not disclose to the Barbers that another mortgage held on the "L" Street property (David Marsh loan) was also in default. A subordination agreement was required to be executed by Marsh in order for the Barber/Medici loan to close. Marsh agreed to subordinate his mortgage position for approximately $3,000 in arrear payments. Marsh was owed approximately $125,000 but chose to subordinate because by doing so he was able to recoup a small amount of what he considered a lost investment. Kolberg knew of Marsh's situation and did not advise the Barbers. The Barber loan to Medici/Automatic Concrete, Inc. closed on January 18, 1986. The Barbers delivered a check for $53,000 payable to the title company chosen by Diko. Neither Diko nor Kolberg gave the title company, Manor Title, closing instructions to protect the lenders' interests. Kolberg did, however, instruct the title company to list expenses relating to the Ropet Anlagen foreclosure against the Medici loan. Proceeds from the closing, in the amount of $50,000 were paid to Kolberg, as trustee for "Ropet Anlagen," and deposited to an account by that name. The name "Ropet Anlagen" translates to "Ropet Investments." Kolberg handles all transactions for this Kolberg family company in the United States. (Kolberg has two sons, Robin and Peter, from a former marriage. The name "Ropet" may derive from their names.) Kolberg's former wife, Patricia Kolberg, owns an interest in Ropet Anlagen. Regular monthly payments were made by Kolberg to Patricia Kolberg on a Ropet Anlagen account. Many of the checks drawn on the Ropet Anlagen account were for personal expenses of Kolberg or his business. The first mortgage on the "L" Street property was 45 days overdue on January 13, 1986. Kolberg knew of this delinquency but did not advise the Barbers. To the contrary, Diko gave the Barbers an estoppel notice from a prior closing showing the first mortgage to be current. The first mortgagee ultimately foreclosed its mortgage and the Barbers lost their entire investment. The Barbers did not receive a fire and hazard insurance policy to cover losses in the event of fire or storm for the "L" Street property. The Barbers did not receive a mortgagee title insurance policy until March, 1986, by which time the first mortgage was further in default. Additionally, the mortgagee policy disclosed a financing statement and a collateral assignment of rents recorded prior to the Barbers' mortgage.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Banking and Finance, Office of the Comptroller, enter a Final Order revoking the mortgage broker license issued to Dieter Kolberg and Diko Investments, Inc. DONE and RECOMMENDED this 30th day of November, 1987, in Tallahassee, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of November, 1987. APPENDIX Rulings on proposed Findings of Fact submitted by Petitioner: Paragraphs 1, 2, 3, 4 and 5 are accepted. Paragraph 6 is accepted; however, Kolberg's interest when financing with funds he controlled was only on a temporary, interim basis. The activities were conducted with Diko to receive a commission, therefore requiring a license. Paragraphs 7-15 are accepted. Paragraph 16 is accepted to the extent addressed in findings of fact paragraphs 12, 13. Paragraphs 17-18 are accepted to the extent addressed in findings of fact paragraphs 14, 18, 22. Paragraphs 19-27 are accepted. Paragraph 28 is rejected as immaterial and unnecessary. Paragraphs 29-42 are accepted. The detail of Petitioner's finding is unnecessary to the conclusions reached herein. Paragraphs 43-45 are accepted but unnecessary. Paragraph 46 is accepted. Paragraph 47 is rejected as unnecessary and immaterial. Paragraphs 48-52 are accepted. Paragraph 53 is rejected as unnecessary. Paragraph 54 is accepted. Paragraph 55 is accepted to the extent found in findings of fact paragraphs 20, 21. Paragraphs 56-57 are accepted. Paragraph 58 is accepted to the extent addressed in finding of fact paragraph 21. Paragraphs 59-63 are accepted but unnecessary. Paragraphs 64-65 are accepted. Rulings on proposed Findings of Fact submitted by Respondents: Paragraph 1 is accepted. Those portions of paragraph 2 which set forth Respondent's dates of testing and licensure are accepted, the balance is rejected as an erroneous conclusions of law. Paragraph 3 is rejected as contrary to the weight ofevidence. Paragraph 4 is accepted but irrelevant to the issue. Paragraph 5 is rejected as the transaction was solicited with Kolberg's company, Diko, participating as a mortgage broker. Paragraph 6 is accepted but irrelevant to the issue. Paragraph 7 is rejected as contrary to the weight of theevidence and law. Paragraph 8 is accepted but does not mitigate, as a matter of law, Respondent's improper useage of the phrase. Paragraphs 9-11 are accepted; however the detail of thefindings is unnecessary and immaterial to the issues of thiscause. Paragraphs 12-14 are accepted to the extent addressed in findings of fact paragraphs 12, 13 the balance is rejected as unnecessary and immaterial. Paragraph 15 is rejected as unnecessary, relevant portions having previously been addressed. Paragraph 16 is accepted. Paragraph 17 is accepted but is unnecessary. Paragraph 18 is rejected to the extent it qualifies Barber as a "Sophisticated Investor." The record is clear Mr. Barber was experienced in the laws of France; however, he relied on Kolberg completely as to both transactions which took place in Palm Beach. Moreover, Mr. Barber's useage and understanding of the English language was suspect. He could hardly be considered a "sophisticated investor" in light of the total circumstances. Paragraph 19 is rejected as contrary to the weight of the evidence. Paragraph 20 is accepted to the extent addressed in finding of fact paragraph 13, the balance is rejected as contrary to the weight of evidence. Moreover, it is found that the only times of capacity occupancy (which were limited) were due to temporary, transient, undesirable tenants who may have directly affected the crime problem. Paragraph 21 is accepted. Paragraph 22 is rejected as contrary to the weight of evidence. Paragraphs 23-24 are rejected as contrary to the weight of evidence. Paragraph 25 is accepted but is unnecessary. The crime problem was there prior to closing and was undisclosed to Barber. That it worsened after closing only assured the disclosure should have been made. Paragraphs 26-35 are rejected as contrary to the weight of the evidence. Many of the facts asserted here are based on testimony given by Kolberg. Respondents presume that testimony to be truthful, accurate, and candid. I found the opposite to be true. Paragraph 36 is accepted but does not mitigate Respondents' responsibilities to have completed the items at closing. Paragraph 37 is accepted with same proviso as above paragraph 36, ruling #22). Paragraphs 38-39 are rejected. See ruling #21. Paragraph 40 is accepted. Paragraph 41 is accepted but see findings of fact paragraph 21 as to Kolberg's useage of Ropet funds for personal expenses. Paragraphs 42-43 are rejected as contrary to the weight of the evidence. COPIES FURNISHED: Lawrence S. Krieger, Esquire 111 Georgia Avenue, Suite 211 West Palm Beach, Florida 33401 Keith A. Seldin, Esquire 1340 U.S. Highway #1, Suite 106 Jupiter, Florida 33469 Honorable Gerald Lewis Comptroller, State of Florida Department of Banking and Finance The Capitol Tallahassee, Florida 32399-0350

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