The Issue Whether or not the Respondent, Evers & Associates, Inc. and Dovard J. Evers, its President, a licensed mortgage broker in the State of Florida, has charged and accepted fees and commissions in excess of the maximum allowable fees or commissions on the transactions set forth in the administrative complaint, Exhibit "A," in violation of Sec. 494.08(4), F.S., and thereby subjected the Respondent to a possible suspension under the terms of 494.05(1)(g), F.S.
Findings Of Fact Evers & Associates, Inc. through the parson of Dovard J. Evers, its President, was a licensed mortgage broker in the State of Florida, during the time period contemplated by the administrative complaint. Subsequent to the time of receiving the mortgage brokers-license, Dovard J. Evers, on behalf of Evers & Associates, Inc., entered into an agreement with several other parties to sell notes secured by mortgages on real estate. One of the agreements was with David Edstrom, of a corporation known as S.E.T., Inc., Mr. Edstrom being the President of said corporation, and the location of that corporation being in Fort Lauderdale, Florida. A similar agreement was held with one Gary George of the Mortgage Consultants, Inc., Ocala, Florida. The agreement with Gary George involved a sale of mortgages for the benefit of the mortgagor, Washington Development Corporation. The third such agreement was with Phil Swan of Southeast Florida Corporation. The written conditions of the S.E.T., Inc. arrangement with Mr. Evers can be found in Respondent's Exhibits No. 2 through No. 5. Essentially, the arrangement was to have Mr. Evers, through Evers & Associates, act as a salesman for the benefit of S.E.T., Gary George and Phil Swan. Their agreement envisioned that Mr. Evers would be afforded a percentage discount varying from 14 percent to 16 percent of the amount of a mortgage loan which was a note secured by real estate. In actual , the contact was made between S.E.T., Gary George and Phil Swam Mr. Evers for purposes of placing notes that were for sale. The apparatus worked by having Mr. Evers contact mortgagees/investors who made a check payable to Evers & Associates for the full amount of the mortgage loan, whose price had been quoted by the intermediary; S.E.T., Gary George and Phil Swan. This amount was held in escrow until such time as the note and mortgage which secured the note could be drawn. The executed note and mortgage went directly to the third party mortgagee/investor without ever having the name of Mr. Evers or Evers & Associates, Inc., affixed to such documents. After this note and mortgage had been executed in behalf of the third party investor, Mr. Evers deducted a fee in favor of Evers & Associates, Inc., according to the percentage agreement with S.E.T., Gary George and Phil Swan and sent the balance of the money to S.E.T., Inc.; Washington Development Corporation through the person of Gary George and to Phil Swan of the Southeast Florida Corporation. The arrangement with Washington Development Corporation changed at a later date because Gary George was no longer involved and payments subsequent to his involvement were sent directly to Washington Development Corporation. The facts show that in the transactions found in Petitioner's Exhibit "A," the complaint, charges were made in behalf of Evers & Associates in the person of Mr. Evers which exceed the statutory allowance for fees and commissions in the amount stated in the column entitled overcharges. These overcharges are according to the percentage agreement between Mr. Evers and S.E.I., Inc., Gary George, and Phil Swan, minus adjustments made in behalf of the third party investor/mortgagee, as indicated in the testimony. This finding of facts, excludes the mortgage by M. Berkell which was stipulated between the parties as not being a matter for further consideration in the hearing. There was no evidence offered of the charge, if any, between S.E.T., Inc., Gary George, and Phil Swan in their dealings with their developer/mortgagors. At present the Respondent, Evers & Associates, Inc., and Dovard J. Evers, its President, have failed to renew the license in the current license period and, as of the moment of the hearing, have expressed no further interest in such renewal.
Recommendation It is recommended that the license of Evers & Associates, Inc., by Dovard J Evers, its President, be suspended for a period not to exceed 30 days. DONE and ENTERED this 8th day of June, 1976, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Fred O. Drake, III, Esquire Office of the Comptroller The Capitol Tallahassee, Florida 32304 Earl M. Barker, Esquire 218 East Forsythp Street Jacksonville, Florida 32202
The Issue Whether the license of Respondent should be suspended for violation of the Mortgage Brokerage Act, Chapter 494, Florida Statutes.
Findings Of Fact Respondent Irving Zimmerman holds Mortgage Brokerage Registration No. 90-3337. An Order of Emergency Suspension of License was issued by the Department of Banking and Finance dated March 24, 1975 and served on Respondent Irving Zimmerman by certified mail. Said Emergency Order is now in effect: Through his attorney, Milton R. Wasman, Respondent Zimmerman requested this formal administrative hearing. The attorney for Respondent, Mr. Milton R. Wasman, called the undersigned Hearing Officer on the day immediately preceding this hearing, that is June 23, 1975, requesting that the hearing be postponed because of a physical disability of said attorney. Said request was denied because of the late hour of request and because of grievous inconvenience to the parties and to the witnesses that had been subpoenaed. Said request was denied orally by telephone to Respondent's attorney whereupon said attorney requested that the transcript of the proceeding be made available. Said attorney was assured that he could view the transcript upon his request when it was available. Upon request of William Corbett, Counsel for the agency, authorization was given to take the deposition of witness Joseph M. Magill, a witness who could not attend the hearing. Said deposition is filed with this record. The attorney for Respondent Zimmerman, Mr. Wasman appeared in behalf of the Respondent at the taking of said deposition in Miami, Florida on July 18, 1975. The following instruments were made part of the record: Summons dated March 24, 1975; Order of Emergency Suspension of License filed March 24, 1975; Petition for Hearing filed by Respondent's attorney; Deposition of witness for the agency, Mr. Joseph M. Magill; Transcript of record of this hearing and also transcript of record at the taking of deposition. On or about July 10, 1974, Mr. Leonard G. Pardue issued a check in the amount of $7,500 payable to "State Farm Mortgage Co., escrow account" for the purpose of making a mortgage loan to Hans G. and Ann M. Widenhauser. Subsequently, after the Widenhausers decided not to make this loan, the Respondent contacted Mr. Pardue and attempted to negotiate a substitute loan to Alan and Marcia Hollet. After that loan did not close, Mr. Pardue, by his attorney, Mr. Roger G. Welcher, wrote several letters to Respondent which demanded a return of the $7,500 to his client. Mr. Pardue filed a civil suit against Respondent to recover said funds; however, as of the date of the hearing, the Respondent has failed or refused to return the money. Mr. Bernard Supworth made a mortgage loan to Robert E. and Madeline Pope in June of 1972, through the Respondent as broker. The monthly payments were made to Respondent who in turn was supposed to remit the funds to Mr. Supworth. Subsequently, on or about January 25, 1974, Respondent advised Mr. Supworth that the mortgage was being paid off and Mr. Supworth executed and delivered a Satisfaction thereof to Respondent. Later, Mr. Supworth learned that the Pope mortgage had been paid off in July, 1973, and that a check had been issued by Dade Federal and Savings & Loan Association on July 9, 1973, payable to State Farm Mortgage in the amount of $3,544.98. Notwithstanding such payment in full on the Pope mortgage in July, 1973, Respondent continued to remit monthly payments on it to Mr. Supworth. Mr. Supworth had not agreed to receive any monthly payments after the mortgage had been satisfied and to date has not received all of his money on the Pope transaction. Respondent Zimmerman negotiated another mortgage loan to Mr. Supworth to James and Phyllis Lowe, as borrowers in the amount of $4,600 to be paid in the amount of $97.74 per month. These payments were to be paid by the Lowes to the Respondent, who was to remit said payment to Mr. Supworth. Thereafter, on or about November 21, 1973, Respondent advised Mr. Supworth, by memorandum, that this mortgage must be paid off. Thereupon, Mr. Supworth executed and delivered a Satisfaction of Mortgage to Respondent. He continued to receive monthly payments from Respondent on the Lowe mortgage up until January, 1975. Mr. Supworth later learned that the Lowe mortgage had been paid in full to Respondent in October, 1973. Mr. Supworth had not agreed to this transaction. On or about August 15, 1973, Mrs. Judith Valenza made a mortgage loan at the Commercial Bank of Kendall. Later Mrs. Valenza negotiated a mortgage loan through Respondent, as broker, to pay off the existing mortgage to the Commercial Bank of Kendall. Pursuant to that transaction, Mrs. Valenza closed said loan through Respondent, as broker. Thereafter, a check was issued on "Irving Zimmerman Trust Account" in the amount of $3,510.78, and payable to the Commercial Bank of Kendall. The check was returned because of "insufficient funds". As of the date of the hearing, the Commercial Bank of Kendall had not received payment of said check from Respondent. On or about January 28, 1975, Mr. and Mrs. Joseph M. Magill executed a note and mortgage in the amount of $3,500 in favor or Helen R. Stahl, as trustee, at the offices of Respondent. Respondent failed to account for or deliver money to the person entitled thereto, on demand failed to disburse funds in accordance with the agreement, and failed to keep funds in a trust account.
Findings Of Fact The Parties. The Department is a state agency charged with the administration and enforcement of Chapter 494, Florida Statutes, the Florida Mortgage Brokerage Act, and the rules promulgated thereunder. Financial Funding is a corporation. Eric Schwartz is the sole director, officer and shareholder of Financial Funding. Mr. Schwartz has been licensed by the Department as a mortgage broker continuously since 1983. Between 1983 and 1988 Mr. Schwartz acted as broker for a wholly-owned mortgage brokerage business. From 1988 until October 1, 1991, Mr. Schwartz was licensed as a self-employed mortgage broker. Mr. Schwartz has also held a real estate broker's license since approximately 1978. Financial Funding was created by Mr. Schwartz in order to comply with newly enacted requirements of Chapter 494, Florida Statutes. Effective October 1, 1991, licensed mortgage brokers in Florida were required to be employed by a mortgage brokerage business. Mr. Schwartz was, therefore, required to create a business entity or work for someone else's mortgage brokerage business in order to continue as a mortgage broker. Financial Funding's Application. On or about December 12, 1991, Financial Funding filed an application with the Department for licensure as a mortgage brokerage business (hereinafter referred to as the "Application"). It was revealed in the Application that Mr. Schwartz was the President of Financial Funding. By letter dated April 24, 1992, the Department denied Financial Funding's Application. The Department denied the Application because of its conclusion that Mr. Schwartz, an officer of Financial Funding, had violated Chapter 494, Florida Statutes and had a disciplinary history. Financial Funding timely challenged the denial of its Application. The Eason Complaint. Between approximately 1984 and 1987, Mr. Schwartz was the sole owner and president of Paramount Finance Corporation (hereinafter referred to as "Paramount"). Mr. Schwartz was the principal mortgage broker for Paramount and utilized Paramount as the vehicle for his practice as a mortgage broker. On or about November 5, 1985, Agnes Eason filed a complaint against Mr. Schwartz and Paramount (hereinafter referred to as the "Eason Complaint"), in the Circuit Court of the Eleventh Judicial Circuit, In and For Dade County, Florida. A Final Judgment was entered on the Eason Complaint on or about February 17, 1987. The court found that Mr. Schwartz had initiated contact with the Plaintiff, Agnes Eason. The court also found that Mr. Schwartz had represented to Ms. Eason that the Small Business Administration (hereinafter referred to as the "SBA"), was about to foreclose a lien on her home. The court also found that "[t]he Small Business Administration, in fact, was not foreclosing on Plaintiff's property [and had no plans to institute foreclosure proceedings in the near future.]" The language in brackets was struck from the Final Judgment. Therefore, no determination was made as to whether foreclosure proceedings might have been instituted in the future. The striking of this language, however, does not prove that the SBA was considering possible foreclosure proceedings on Ms. Eason's property. Nor was Mr. Schwartz's testimony persuasive enough to reject the findings of the court on the Eason Complaint. The court concluded that Mr. Schwartz told Ms. Eason that "the only way to save her home from foreclosure" would be to execute notes and mortgages in favor of Paramount. Ms. Eason executed the suggested notes and mortgages and they were recorded. Although the notes and mortgages were executed on terms which Ms. Eason accepted, the court concluded that "no consideration" passed from Paramount to Ms. Eason for the notes or mortgages. The court also concluded that Ms. Eason executed the notes and mortgages because of the misrepresentation concerning the SBA by Mr. Schwartz. The court found that when Ms. Eason notified Mr. Schwartz that her payments on the note she had executed to Paramount were more than she could afford, the notes and mortgages were cancelled and a satisfaction was recorded. The court also found that after cancelling the notes and mortgages, Mr. Schwartz incorrectly told Ms. Eason that "the only way left to save her home from imminent foreclosure by the Small Business Administration" would be to execute a Warranty Deed conveying the fee simple interest in Ms. Eason's home to him. Mr. Schwartz also told Ms. Eason that, pursuant to a document titled a "Disclosure", he would grant Ms. Eason and her mother a life estate in the property. Mr. Schwartz was also to pay Ms. Eason $1,000.00 and to pay real estate taxes on the property pursuant to the Disclosure. Ms. Eason executed a Warranty Deed and the Disclosure on June 18, 1985. The Warranty Deed was recorded June 19, 1985. The Disclosure was recorded, but not until September 13, 1985. Although the transaction was explained by Mr. Schwartz to Ms. Eason and she accepted it, the court concluded that Mr. Schwartz's representation that foreclosure by the SBA was imminent was incorrect and that Mr. Schwartz failed to tender the sum of $1,000.00 agreed to in the Disclosure. Although Mr. Schwartz testified that he did attempt to tender the $1,000.00 (less $175.00 in recording fees), he did so after the Eason Complaint had been filed and it was rejected because of the litigation. Therefore, although the Disclosure agreement was executed June 18, 1985, Mr. Schwartz did not attempt to tender the $1,000.00 until some time after the Eason Complaint was filed on November 5, 1985. The court also found that Mr. Schwartz had not paid real estate taxes on the property as promised in the Disclosure. Mr. Schwartz explained, however, that the taxes had not been paid because the first real estate taxes due on the property had not become due until after the litigation had been instituted. The court concluded as a matter of law, among other things, the following: That the Defendant, ERIC SCHWARTZ, on behalf of Defendant PARAMOUNT FINANCE CORPORATION [fraudulently] misrepresented a material fact to the Plaintiff, AGNES EASON, for the purpose of inducing Plaintiff to execute the aforementioned notes and mortgages. That the Defendant, ERIC SCHWARTZ [fraudulently] misrepresented a material fact to the Plaintiff, AGNES EASON, for the purpose of inducing Plaintiff to execute the aforementioned Warranty Deed and "Disclosure." That the Warranty Deed executed by Plaintiff in favor of Defendant was procured by Defendant SCHWARTZ through the exercise of coercion and duress upon Plaintiff. That no consideration passed from Defendant SCHWARTZ to Plaintiff for any of the instruments executed by Plaintiff. That the purported promises made by Defendant SCHWARTZ in the "Disclosure", to the effect that certain debts of the Plaintiff will be paid by SCHWARTZ "if necessary", are illusory promises and impose no obligation upon the Defendant SCHWARTZ. Such promises are therefore unenforceable and do not constitute consideration in support of the subject conveyance. The court ordered the promissory notes, Warranty Deed and the Disclosure cancelled and declared them null and void. The Department's Awareness of the Eason Complaint. There were employees of the Department that were aware of the Eason matter at the time that an administrative action against Mr. Schwartz, which is discussed, infra, was being investigated by the Department. Prior to the action of the Department in this case, the Department has not taken disciplinary action against Mr. Schwartz's individual mortgage broker license as the result of the judgment on the Eason Complaint. The weight of the evidence failed to prove why the Department did not take action against Mr. Schwartz as a result of the judgment on the Eason Complaint until this case arose. The evidence also failed to prove, however, that the Department ever represented to Mr. Schwartz that it would not take any action against his license as a result of the Eason matter. 1990 Administrative Action. At some point during 1987, Mr. Schwartz decided to begin business as a mortgage broker with Mr. Stephen Hertz. Mr. Schwartz intended to discontinue operating through Paramount. Mr. Schwartz and Mr. Hertz intended to operate their business as Dollar Mortgage Company (hereinafter referred to as "Dollar"). In June of 1987 Mr. Schwartz prepared an application to register Dollar as the mortgage broker. Mr. Schwartz also prepared an endorsement transferring his individual license as principal mortgage broker to Dollar. These documents (hereinafter referred to as the "Dollar Applications"), were provided to Mr. Hertz to file with the Department. Mr. Schwartz, having been advised by Mr. Hertz that the Dollar Applications had been filed, believed that the Dollar Applications had been filed with the Department. Before being informed by the Department that the Dollar Applications had been approved or that his individual license had been renewed, Mr. Schwartz engaged in several mortgage brokerage transactions in the name of Dollar. Engaging in the transactions in the name of Dollar, therefore, constituted acting as a mortgage brokerage business without a license. At some point after the Dollar Applications were filed, Mr. Schwartz contacted Mr. Paul Richman of the Department's Miami office to determine what the status of the applications was. Mr. Schwartz was informed that the Department was in the process of changing the manner in which applications were processed and the process was causing a delay. Mr. Richman advised Mr. Schwartz to check with the Department's Tallahassee office in November, 1987, if the Department had not acted on the Dollar Applications by then. In November, 1987, Mr. Schwartz contacted the Department's Tallahassee office and was informed that the Dollar Applications had never been received. Mr. Schwartz submitted new applications at that time. As a result of the fact that Mr. Schwartz had transacted business before his license had been renewed and had acted in the name of Dollar before receiving approval of Dollar to transact such business, the Department filed an Administrative Complaint, Number 1154-F-5/88 (hereinafter referred to as the "Complaint"), against Mr. Schwartz. The Complaint was entered August 29, 1988. On or about January 23, 1990, the Department and Mr. Schwartz entered into a Stipulation and Consent Agreement (hereinafter referred to as the "Stipulation"), settling the Complaint. Mr. Schwartz admitted in the Stipulation to the following: 3. Eric S. Schwartz admits that he acted as a mortgage broker with an inactive license, and that Dollar acted as a mortgage brokerage business without a valid registration but denies intentional wrongdoing as more fully set forth in Mr. Schwartz's affidavit dated May 30, 1989 which is referenced as if fully set forth at length herein. Pursuant to the Stipulation, Mr. Schwartz was required to pay an administrative fine of $2,500.00 for his violation of Chapter 494, Florida Statutes. It was also agreed that the Dollar application would be withdrawn and it was. Mr. Schwartz's individual license was, however, renewed. The Stipulation also provided that the Department would make at least one examination of Mr. Schwartz's mortgage brokerage activities during each six month period during the next twenty-four months from the date of the Stipulation. Audits were in fact conducted by the Department. No further charges were brought against Mr. Schwartz as a result of these audits. Additionally, the following agreement was contained in the Stipulation: 13. The Department agrees that, upon execution of this Stipulation, payment of the administrative fine, payment of the restitution ordered, and faithful compliance hereafter by Eric S. Schwartz with all of the terms and conditions of this Stipulation, the Department will take no further action against Eric S. Schwartz for violations of the Act and the rules of the Department as set forth in the Complaint. However, should the Department, in its exercise of its discretion, deem it necessary to take action against Eric S. Schwartz for violations of the Act and rules of Department occurring after the time period set forth in the Complaint, then, in that event, all such allegations and charges may be used against Eric S. Schwartz in any such subsequent proceeding, if relevant. Eric S. Schwartz understands that there is no order, administrative or judicial, sealing these proceedings in the event of a future administrative complaint regarding activities alleged to occur subsequent to the final date of the timeframe of the investigation of the affairs of Eric S. Schwartz' activities as set forth in the Complaint. See the second paragraph number "13" on page 4-5 of the Stipulation. In March of 1990, the Department entered a Consent Final Order incorporating the Stipulation. The Department has not brought any charges against Mr. Schwartz subsequent to the execution of the Stipulation. The Department has continued to renew Mr. Schwartz's mortgage broker's license.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a Final Order denying Financial Funding's application for licensure as a mortgage brokerage business. DONE AND ENTERED this 21st day of January, 1993, in Tallahassee, Florida. LARRY J. SARTIN 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 21st day of January, 1993. APPENDIX The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. Financial Funding's Proposed Findings of Fact Accepted in 6 and 8. Accepted in 9. Accepted in 3. Accepted in 4. Accepted in 5. Although the Department offered no such evidence, the weight of the evidence failed to prove that there is "no difference." Hereby accepted. See 8. Accepted in 34. Accepted in 10-11 and 28-29. Accepted in 30, 32-33 and 37. Accepted in 31 and 34. Whether Mr. Hertz advised Mr. Schwartz to start doing business in the name of Dollar is not relevant. The evidence failed to prove that Mr. Schwartz "had no reason to operate improperly." What Mr. Hertz noted in his letter of May 18, 1988 is hearsay. The evidence failed to prove when the documents "had been previously provided . . . ." The weight of the evidence also failed to prove that Mr. Schwartz "was not at fault." Hereby accepted. See 37 and 38. The weight of the evidence failed to prove that Mr. Schwartz had "nothing to hide." The evidence also failed to prove that the Department's audits were "extremely thorough. What the Department did during their audits of Mr. Schwartz is based upon hearsay. Accepted in 37. Accepted in 39. Not relevant. Hereby accepted. Accepted in 12 and 25. See also 17-19 and 21. The weight of the evidence failed to prove the second sentence. The fifth sentence through the end of this proposed paragraph is not relevant. The evidence also failed to prove that Ms. Eason was "initially pleased." 20 See 14-15, 19, 21 and 22. 21 See 25-27. The weight of the evidence failed to prove that the Department was aware of the Eason matter for "seven years." The weight of the evidence also failed to prove the third sentence.. The Department's Proposed Findings of Fact Accepted in 1. Accepted in 12. Hereby accepted. Accepted in 13, 21 and 23 and hereby accepted. Accepted in 34. Accepted in 35. The Stipulation was executed in January, not December. Accepted in 36. Accepted in 37. Accepted in 38. Accepted in 40. Accepted in 6. Accepted in 3 and 7. Accepted in 8. COPIES FURNISHED: Harold F. X. Purnell, Esquire Highpoint Center, Suite 1200 106 East College Avenue Tallahassee, Florida 32301 J. Ashley Peacock Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, FL 32399-0350 William G. Reeves General Counsel Room 1302 The Capitol Tallahassee, FL 32399-0350
The Issue The issue in this case is whether the Petitioner’s application for licensure as a mortgage broker should be approved.
Findings Of Fact The parties set forth an extensive set of stipulated facts in the Prehearing Stipulation filed prior to the commencement of the hearing. The stipulated facts describe the activities of Richard Eric Watts (Petitioner) on behalf of Frederick M. Larry in relation to a $50,000 investment of Mr. Larry's funds with D. F. Owen, Inc., in May 1985. At approximately the same time as the Larry investment was made, the Petitioner contracted with D.F. Owen to act as an investment adviser for a fee of $33,500. The stipulated facts describe the activities of the Petitioner on behalf of Cynthia Halabrin Trust. The Petitioner was the trustee for the trust, which was a residence. During a period of time that the residence was under renovation, the Petitioner allowed Mr. Larry to reside without payment to the trust. The stipulated facts describe the activities of the Petitioner regarding the unregistered operation of "Watts Investment Management, Inc." during 1985 and the subsequent registration of the entity in 1986. The stipulated facts describe the activities of the Petitioner regarding his employment as a broker for Paine Webber from 1982-1985, and the failure to obtain approval for outside employment activities while working for the investment firm. The stipulated facts describe the legal action taken by Cynthia Halabrin Raybuck against the Petitioner and Paine Webber related to the activities of the Petitioner as trustee of the Halabrin trust. The parties settled the case through arbitration. The stipulated facts address the creation of "Danbury Mortgage Company," and describe the preliminary activities of the unlicensed entity. The facts also identify the Petitioner's association with the Paradigm Mortgage Company, based in Jacksonville, Florida. For purposes of this Recommended Order, all stipulated facts set forth in the prehearing stipulation filed by the parties are adopted and incorporated herein. On or about August 29, 1996, the Petitioner filed an application with the Department of Banking and Finance, Division of Finance (Department) seeking licensure as a mortgage broker. The Petitioner’s application disclosed that in 1989 he was denied admission to the Florida Bar. In January 1989, the Petitioner was notified by the Florida Board of Bar Examiners (“Board”) of their intent to deny his application for admission to the Florida Bar. A hearing was conducted in June 1989 regarding the denial. The Petitioner was represented by legal counsel and testified under oath at the hearing. On August 31, 1989, the Board of Bar Examiners denied Petitioner’s application for admission. Based on the facts set forth in the Board's order, the Board concluded that the Petitioner “engaged in acts to serve his own interest to the detriment of others, violated registration laws, neglected payment of student loan obligations and issued numerous worthless checks.” The Board also determined that the Petitioner provided misleading testimony at his Bar hearing and failed to disclose material information on his application. Although at the formal administrative hearing the Petitioner attempted to explain the circumstances under which the Board's determination occurred, the testimony at hearing and the stipulated facts support the findings made by the Board. Upon the filing of the Petitioner's application for licensure as a mortgage broker, the Department undertook a review of the application. Based on the review, the Department determined that the Petitioner had held himself out for business as a mortgage broker without an appropriate license. In December 1995, the Petitioner registered the name "Danbury Mortgage Corporation" with the Florida Department of State, Division of Corporations. In January 1996, the Petitioner established a business location for Danbury Mortgage Corporation. The Petitioner listed the business under the "mortgage brokers" section of the Sarasota Yellow Pages. At no time was the Danbury Mortgage Company licensed by the Department of Banking and Finance. At the hearing, the Petitioner suggested that no mortgage business had been conducted by Danbury Mortgage Company. The Petitioner asserted that he had affiliated with another company (Paradigm) and that the other company was handling the registration of his office as a Paradigm branch. The evidence establishes that the Petitioner was involved in completion of at least one mortgage loan application on behalf of Paradigm Mortgage Company without appropriate licensure. The Paradigm "branch" office was located in the same building as Danbury Mortgage Company, and shared the Danbury telephone number. Based on a cryptic telephone message received by the Petitioner from a Paradigm supervisor, the Petitioner assumed that he was licensed. The Petitioner did not return the telephone call and made no credible attempt at determining whether he was licensed prior to acting on behalf of Paradigm Mortgage Company.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department enter a Final Order denying the application of Richard Eric Watts for licensure as a mortgage broker. DONE AND ORDERED this 30th day of December, 1997, in Tallahassee, Leon County, Florida. _ _ WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 30th day of December, 1997. COPIES FURNISHED: Honorable Robert F. Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Harry Hooper, General Counsel Department of Banking and Finance The Capitol, Room 1302 Tallahassee, Florida 32399-0350 Richard E. Watts, pro se 1345 Main Street, Suite C-4 Sarasota, Florida 34236 Pamela R. Jacobs, Esquire Regional Counsel Department of Banking and Finance 1300 Riverplace Blvd, Suite 640 Jacksonville, Florida 32207
Findings Of Fact At all times material to these proceedings, the Respondent Cline was licensed by the State of Florida as a mortgage broker and held license number HB 0017832 from January 13, 1986 through May 31, 1987. During this period of time, Respondent Cline was president and principal mortgage broker for MAC at the 4045 Tamiami Trail, Port Charlotte location. The Respondent was a director and shareholder of the corporation. The Respondent Henderson was also licensed as a mortgage broker and held license number HA 0007460 from March 29, 19856 through June 19, 19889. Respondent Henderson conducted business through MAC as the corporation's vice president. The Respondent was a director and shareholder of the corporation. In response to a consumer complaint, the Department initiated an examination of the books and records maintained at the Port Charlotte location of MAC on April 21, 1987. The conduct of the Respondents in their business dealings as mortgage brokers with MAC was investigated as part of the Department's review process. The examination and investigation involved the time period from March 1, 1986 to June 1, 1987. The written examination report prepared by the Department's financial examiner concludes that the Respondents, as officers and directors of MAC, financially compensated MAC employees who were not licensed under the Mortgage Brokerage Act for soliciting or negotiating mortgage loans. Six alleged mortgage solicitors were named in the report. The loan packages of seventeen mortgages, along with MAC's commission reports, were submitted as evidence to support the conclusion. A review of the documentation, along with a review of the commission checks and the testimony of Kimberly L. Johnson (nee Steed) revealed that the documents identified as "commission reports" were not indicators of commission funds received by the six employees named in the complaint. These employees were paid on a set salaried basis. They were hired by MAC to perform the ministerial acts of taking or typing applications for loans under the direction of a mortgage broker. The use of these employees' names in the commission reports incidentally shows which employee assisted in the completion of forms that resulted in commissions to the licensed brokers who completed the mortgage financing transactions. This interpretation of the "commission reports" is clearly supported by the first page of the reports, Petitioner's Exhibits 17 and Commission checks on the loans, were issued to the licensed mortgage brokers. The evidence demonstrates that Rebecca Henderson, who was one of the employees performing ministerial acts, on one occasion acted beyond her authority and "locked in" the interest rate for a mortgage applicant while she was completing the application. The Department did not present evidence to show that either Respondent Henderson or Respondent Cline had actual knowledge of the employee's actions. Neither licensee was the mortgage broker directing the employee at the time the incident occurred. During the course of the Department's examination, the conclusion was reached that MAC advertised in a newspaper that the corporation was a "mortgage banker" and a "FNMA lender." The Department alleges that MAC is not a "mortgage banker" and a "FNMA lender." At hearing, Kenneth Moulin, a former shareholder of MAC, testified that the goal of MAC was to become a bank. The corporation had money which was used to fund two mortgage loans with MAC as mortgagor. Petitioner's Exhibit 34, which was loan documentation on the residential loan application of William T. Martel and Lora A. Martel, names MAC as the lender. The documents also include FNMA forms used by FNMA lenders. The examination report concluded that MAC did not maintain records for a five-year period. The company started doing business in March 1986. Records were continuously maintained from MAC's inception. An advertisement placed in the newspaper, The Monday Sun, which was published on April 28, 1986, failed to include the phrase that MAC was a "licensed mortgage broker." The advertisement was placed by Respondent Henderson. In mitigation, it should be noted that Respondent Henderson had his mortgage brokerage license for less than one month and was new to the business as it is regulated by the Department. There was no evidence provided to demonstrate that Respondent Cline was aware of the improper advertisement. Other documents provided which purported to be advertisements were not authenticated. They lacked mastheads or headings which could sufficiently identify the place, date or kind of publication. As part of the mortgage financing transactions involved in the sampling of mortgages conducted by the Department, MAC collected fees from applicants for the preparation of documents and reports. Specific fees were quoted to applicants and receipts were clearly marked to demonstrate that the fees were non-refundable to applicants. In its bookkeeping entries, MAC continuously failed to maintain ledger entries which showed that the fees had been assessed on each application, and that the monies had been used for the intended purposes for which they had been collected. In the sampling of mortgages reviewed by the Department, MAC retained money assessed for discount points. The money was not used to reduce the interest rate on mortgages closed, as represented to the borrowers by MAC. Instead, the mortgages were immediately assigned and the discount assessment was retained by MAC for its own, undisclosed use.
Recommendation Based upon the foregoing, it is RECOMMENDED: That Respondent Henderson be issued a reprimand for failure to place the words "licensed mortgage broker" in the April 28, 1986 advertisement. That all other charges against the Respondents be dismissed. DONE and ENTERED this 27th day of November, 1989, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY Hearing Officer Division of Administrative Hearings 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerkk of the Division of Administrative Hearings this 27th day of November, 1989. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 88-2202 Petitioner's proposed findings of fact are addressed as follows: Accepted. See HO #1. Accepted. See HO #2. Accepted. See HO #1. Accepted. See HO #2. Rejected. See HO #2. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. See HO #1. Rejected. Irrelevant. Rejected. Irrelevant. Accepted. See HO #3. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. Document speaks for itself. Also, this is established as proper evidence under Section 494.051, Florida Statutes, so these findings are redundant. Rejected. Report speaks for itself. Accepted. Accepted. Reject the phrase "negotiation." Contrary to fact. See HO #5. Reject the phrase "negotiate." Contrary to fact. See HO #5. 21.-24. Rejected. Contrary to fact. Kimberly L. Johnson is the same person as Kimberly L. Steed who has been licensed as a mortgage broker since September 29, 1986. 25.&26. Rejected. Contrary to fact. See above. This rendering of the testimony is rejected by the fact finder. Accepted. &29. Rejected. Contrary to fact. See HO #5 and HO #6. Accepted. Rejected. See HO #5. Contrary to fact. Accepted. Rejected. Contrary to fact. See HO #5. Accepted. Rejected. Contrary to fact. See HO #5. Rejected. Contrary to fact. Steed completed ministerial acts. See HO #5. Accept the first sentence. Reject the rest as contrary to fact. See HO #5. Rejected. Improper legal conclusion. See HO #12. Rejected. Contrary to fact. See HO #12. Rejected. Cumulative. Rejected. Repetitive. See HO #12. Rejected. Contrary to fact. See HO #12. Accepted. See HO #13. Accepted. Accepted. Rejected. Improper legal conclusion. Appli- cation fees were not set up as entrusted funds. See HO #12. Rejected. Contrary to fact. See HO #8 and #9. Accepted. Accepted. Rejected. See HO #8. Contrary to fact. Accepted. Accepted. Accepted. Accepted. Rejected. Repetitive. Rejected. Contrary to fact. Cline was not the mortgage broker on any of the transactions presented at hearing. Accepted. Accepted. Accepted. Accepted. Rejected. See HO #8 and #9. Accepted. See HO #13. Accepted. See HO #13. Accepted. See HO #13. Respondent Cline's proposed findings of fact are addressed as follows: Accepted. See HO #1. Accepted. Accepted. Rejected. The records presented were found to be reliable when compared with the originals presented simultaneously by Respondent Henderson, although those were not officially placed in evidence. Rejected. See above. Accepted. See Conclusions of Law. Accepted. See HO #3. Accepted. Accepted. Accepted. See HO #5. Accepted. See HO #5. Rejected. Calls for legal conclusion. Rejected. See Section 494.051, Florida Statutes. Accepted. Accepted. Accepted. See HO #8 and #9. Accepted. See Conclusions of Law. Rejected. Irrelevant. See Section 494.051, Florida Statutes. However, the competency of the examiner was considered in the factual determinations made by the Hearing Officer. Accepted. Not listed as factual finding. As a Conclu- sion of Law, the Hearing Officer cannot rule on this matter. Respondent Henderson's proposed findings of fact are addressed as follows: Accepted. Accepted. See preliminary matters. Accepted. Accepted. See HO #2. Rejected. Improper legal conclusion. Unable to rule on proposed finding. Insufficient. 7. Accepted. See HO #5. 8. Accepted. See HO #8. 9.&10. Reject. Insufficient. 11. Accepted. See HO #12. 12. Rejected. Insufficient. 13. Accepted. 14. Accepted. See HO #12. 15. Accepted. See HO #2. 16. Rejected. Conclusionary. 17. Accepted. 18. Accepted. 19.-30. Not listed as factual findings. As Conclusions of Law, Hearing Officer cannot rule on these matters. COPIES FURNISHED: Elsie M. Greenbaum, Esquire Assistant General Counsel Office of the Comptroller 400 West Robinson Street Suite 501 Orlando, Florida 33801 Ann Mitchell, Esquire GERALD DUNCAN ENGVALSON & MITCHELL Foxworthy Professional Building Suite 101 1601 Jackson Street Fort Myers, Florida 33902 Floyd G. Henderson Post Office Box 2875 Port Charlotte, Florida 33949 Charles L. Stutts, Esquire General Counsel Office of the Comptroller The Capitol Tallahassee, Florida 32399-0350 Honorable Gerald A. Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350
The Issue The issue is whether Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction, in violation of Section 475.25(1)(b), Florida Statutes.
Findings Of Fact Respondent was first licensed as a real estate salesperson in Florida in 1997. She has been licensed continuously since that time, although she did not reside or work in Florida for one year in 1998 and 1999. Her license has never been disciplined. Having entered into a contract to purchase, as her personal residence, a townhouse in Palm Beach Gardens for $85,000, Respondent contacted a licensed mortgage broker, Gary Carlson. Respondent and Mr. Carlson had previously worked together, in their respective professions, while employed by a large residential real estate business. Respondent asked Mr. Carlson to find her a mortgage lender, and Mr. Carlson agreed to do so. Mr. Carlson obtained a mortgage loan application from Respondent and submitted it to an institutional mortgage lender that Mr. Carlson represented. At all times in this transaction, Mr. Carlson served as the agent of the mortgage lender, not Respondent. After examining the application and related information on the proposed mortgage loan, the lender directed Mr. Carlson to obtain additional information, including an affidavit to the effect that Respondent had never been known as Lea Taylor Nola and that she had never been married. Respondent disclosed to Mr. Carlson that she had been known as Lea Taylor Nola and she had been married, although she was now divorced. Mr. Carlson assured her that the requirements were unimportant and advised her to sign statements that she did not know Lea Taylor Nola and that she had never been married. Respondent did so. Upon examination of the closing documents, including the unattested statements described in this paragraph, the lender funded the mortgage loan, and Respondent purchased the townhouse. The mortgage loan remains in good standing two years later.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint against Respondent. DONE AND ENTERED this 30th day of June, 2004, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of June, 2004. COPIES FURNISHED: Jauna Watkins, Acting Director Division of Real Estate 400 West Robinson Street Suite 802, North Orlando, Florida 32801 Leon Biegalski, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 James P. Harwood Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Suite 802, North Orlando, Florida 32802-1900 Richard L. Robbins Sutherland, Asbill & Brennan, LLP 999 Peachtree Street, Northeast Atlanta, Georgia 30309-3996
The Issue The issue in Case No. 94-2065 is whether National Mortgage Bankers, Inc. violated certain disciplinary proceedings governing mortgage brokers and, if so, what penalty should be imposed. The issue in Case No. 94-2066 is whether National Mortgage Bankers, Inc. is entitled to licensure as a correspondent mortgage lender.
Findings Of Fact As of September 3, 1992, the Department of Banking and Finance, Division of Finance (Department), issued a mortgage lender's license to National Mortgage Bankers, Inc. (NMB). At all material times, NMB acted as a mortgage broker, not a mortgage lender. NMB originated mortgaged loans, which were funded by third parties. NMB's principal place of business was in Pt. Charlotte. At all material times, Sheldon Voron was employed as the chief executive officer of NMB. Business was slow for NMB during the first few months after it acquired its mortgage lending license. NMB was operated by Mr. Voron, who supervised loan officers and the processing of loan applications, and Mark Asciutto, who handled bookkeeping, payroll, and the checking accounts, including the escrow account. Mr. Asciutto left the company in September 1993. By the end of 1992, the net worth of NMB was $89,115.23, according to an audited financial statement issued on February 12, 1993. The net worth deteriorated during 1993, dropping to $63,533 by December 31, 1993, according to an audited financial statement issued on March 7, 1994. At no time did NMB ever advise the Department that its net worth was below $250,000. In early 1993, business picked up from late 1992, and NMB hired a second loan processor. Refinancing activity in early 1993 required that NMB continually add new help. At this time, the approval of uncomplicated conventional loan applications took 30-45 days, and the operation ran smoothly. But business continued to increase. From March to June, NMB opened up offices in Naples and Sarasota. A branch in office in Englewood was opened and quickly closed due to its proximity to other offices. By April, the volume of business at NMB was increasing rapidly, aided in part by the addition of government loans. An average of 75 cases monthly during the first three months increased to 125 cases in April. Employing four to five loan processors, NMB continued to hire additional employees, but soon had problems finding qualified persons, as competition in the lending business was increasing due to considerable refinancing activity. Mr. Asciutto handled the escrow account during these busy months, until another employee assumed these duties in late July or August 1994. Mr. Asciutto routinely transferred money from the escrow account to the general operating account when Mr. Asciutto determined that NMB was entitled to retain the money, such as when customers had not been responsive to inquiries from NMB employees. The only such transfer for which a specific amount was identified at the hearing was $860, which was swept from escrow to general operations by check dated April 16, 1993. As is obvious from the trend in net worth, profitability did not increase in direct proportion to increases in business volume. In fact, total income increased from $82,716.01 in 1992 to $556,907 in 1993, but net income increased only from $30,714.88 to $43,528. NMB simply could not keep up with the business, as is evidenced by the experiences of its customers. In July 1993, William Zinser read an NMB advertisement in the newspaper offering an adjustable mortgage rate and a low fixed-rate mortgage. He called the number and set up an appointment to visit the office. He met with an employee of NMB, who discussed interest rates and closing fees. She assured Mr. Zinser that it would take only about 30 days to close the loan. Mr. Zinser submitted a loan application, and the employee said NMB would be back in touch with him. Mr. Zinser waited three or four weeks and heard nothing. He called and was told that there were no problems. On two or three occasions, an NMB employee requested from Mr. Zinser a profit and loss statement or a verification of his wife's income. However, NMB had the wife's income information since the start of the loan application process and twice had received the profit and loss statements. On January 4, 1994, Mr. Zinser applied for a loan with another lender. Shortly thereafter, an NMB employee called him and said that his loan was approved. When he said that he had gone elsewhere, she reminded him that he had obligated himself to pay a $1250 fee in connection with the loan. He refused to pay. On or about July 15, 1993, Janice Hamann first contacted NMB about refinancing her home. She applied for a mortgage, and an NMB employee asked for more information. She supplied it the following day, and the employee said everything was fine. The employee said that it would probably take 4-6 weeks to close. On August 13, 1993, Ms. Hamann called NMB to check on the status of the loan application. An NMB employee said that they would probably close when she returned from a week's vacation. On August 23, Ms. Hamann called and was told to provide some additional information on her payment history. She provided the requested information by September 20. For a second time, she had to provide verification of her husband's employment. On September 18, Ms. Hamann received notification from her homeowner's insurer that they had changed her insurance, evidently to show a new loss payee. No one from NMB had told her that the loan was ready to close. A couple of months later, surveyors showed up and surveyed the property that was to have been the subject of the loan and additional property. Ms. Hamann called NMB and informed them of the mistaken inclusion of additional property. On November 22, Ms. Hamann called NMB and said that she wanted her paperwork and was withdrawing her application. Ten days later, someone from NMB called her and said they were ready to close. Ms. Hamann restated her demand for her paperwork and refused to close. A few days later, she received a letter demanding $1500 in addition to the $300 that she had paid for the credit check, survey, and appraisal. She still receives bills from the surveyor. On September 9, 1993, Richard Chadbourne contacted NMB about refinancing a mortgage. At the first office visit, he completed an application and delivered a check to NMB in the amount of $300. An NMB employee said they would contact him for more information and said it would take 30-45 days to close his loan. At the first meeting, Mr. Chadbourne stated that he wanted the 3.259 percent variable rate mortgage with a six point cap, which NMB was offering. An NMB employee said that they could get him a 3.375 percent rate. On the one or two occasions that NMB contacted Mr. Chadbourne for more information, he provided it to them immediately. Repeated calls to NMB by Mr. Chadbourne or his agent were never returned. No one from NMB ever called Mr. Chadbourne to tell him whether his loan was approved or denied, and he never withdrew his application. On September 10, 1993, Katherine Healey and her husband visited the NMB office to apply for a refinancing loan. Responding to a newspaper advertisement for a 3.375 percent interest rate, the Healeys learned that they would have to pay $1250 in fees to obtain such a low rate. They agreed to pay the sum. They were asked only for salary information and certain documentation concerning their liabilities. An NMB employee said they could lock in the quoted rate when they returned from vacation in a couple of weeks. After returning from vacation, the Healeys called NMB repeatedly, but often could not find anyone to speak to or to return their calls. When they finally talked to someone about their loan, they were told they had to pay another $100 or $150 to lock in at 3.375 percent. They continued calling NMB without much success for two months after returning from vacation. They could not get a closing date, and nothing was happening. In response to their repeated requests to lock in an interest rate, they were told only that they could not lock in until two weeks before closing. By the end of November, the Healeys applied elsewhere for a refinancing loan. Shortly after the Healeys applied elsewhere for a loan, which closed about three weeks later, they received a call from an employee of NMB, who told them that they had a closing date. They said that they had decided to obtain a loan elsewhere. The employee demanded the $1250 fee, which the Healeys had not yet paid, and threatened to sue them if they did not pay. The Healeys refused to pay the fee and were able to use the appraisal, for which they had already paid, with their new application. However, they had to pay for a second credit report. In November 1993, Wendy Harrison contacted NMB for two mortgages--one on a home in Massachusetts and one on a home in Punta Gorda. She filed mortgage applications on or about December 15, 1993, but, by mutual agreement, she withdrew her application on the Florida home. Ms. Harrison subsequently left several telephone messages that were not returned. In January, she was assigned a new loan processor, who still did not return calls. Around this time, Ms. Harrison's husband received a notice from the mortgagee on the Florida property concerning a payoff amount. The Harrisons contacted NMB and told them that this was the wrong property. Mortgage rates began to increase in January. Ms. Harrison called repeatedly on the status of her mortgage refinancing from mid-January to mid- March. A new person assumed loan processing duties on her file. She called Ms. Harrison on or about March 9 and said that the credit report raised some problems. This was the first time either Mr. or Ms. Harrison had been told that there were problems with the credit report, which NMB had received in late December. Ms. Harrison mailed the requested explanatory documents on the following day. Two weeks later, after hearing nothing, Ms. Harrison called NMB and learned that the interest rate would be 8 percent annually, which was higher than the rate in effect when she initiated the loan approval process. The NMB employee explained that the higher rate was due to the fact that the Massachusetts property was a rental property, but NMB employees had known that from the start. However, the NMB employee assured Ms. Harrison that the file was complete and being forwarded to Miami for final approval. The following day, Ms. Harrison sent a certified letter withdrawing the application and asking for the appraisal and any other services for which she had already paid. NMB received the letter on March 26. On April 5, Ms. Harrison found in her mailbox an unstamped, uncancelled envelope that had evidently been hand- delivered by an NMB employee or agent. Inside was a rejection letter backdated to March 23, so as to look like the Harrison application had been rejected before it was withdrawn. Based on customer complaints, the Department financial examiner conducted an unannounced inspection of NMB from November 15-17, 1993. In addition to discovering a violation of the minimum net worth requirement imposed upon mortgage lenders, the examiner found several violations of requirements imposed upon mortgage brokers. At no time did NMB disclose in writing that it could not guarantee acceptance into a particular loan program and could not promise any specific loan conditions or terms. When taking applications, NMB failed to disclose the nature of the mortgage brokerage fee charged by NMB. The fee varied according to the terms of the loan, and NMB only disclosed a broad range of fees at the time of the application. NMB received monies from customers, but did not record check numbers for checks used to pay vendors on behalf of specific customers. NMB thereby failed to maintain an updated record of escrow account activity on an appropriate form. In fact, NMB had the Department-promulgated form, but, as discussed below, used it improperly to try to record mortgage brokerage transactions. NMB did not maintain supporting documentation for monies paid from its escrow account on behalf of customers. NMB often used courier prepayments to pay unrelated expenses. NMB did not record the dates and amounts paid out of escrow. NMB maintained a mortgage brokerage transaction journal, but it lacked the date the customer applied for the mortgage loan, the date of disposition of the application, the total amount of brokerage fees, and the name of the lender. NMB used the Department-promulgated form for escrow account activity and tried to adapt it for mortgage brokerage transactions, but failed to include the above-cited crucial items of information. Concerning NMB's application for a correspondent mortgage broker's license, there is evidence, in at least one case, of fraud or deceit. Ms. Harrison, who was very credible, described an act of fraud or dishonest dealing in the postdating and delivery of her rejection letter. The atmosphere of incompetence and neglect that prevailed at NMB might well have left a typed letter unmailed for days or even weeks. However, an employee or other agent committed a wilful act of deceit in driving the letter out to Ms. Harrison's home and leaving it in the mailbox, rather than simply dropping it in the mail.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Banking and Finance enter a final order revoking the mortgage lender's license of National Mortgage Bankers, Inc. and denying its application for licensure as a correspondent mortgage lender. ENTERED on November 3, 1994, in Tallahassee, Florida. ROBERT E. MEALE 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 on November 3, 1994. COPIES FURNISHED: Hon. Gerald Lewis Comptroller The Capitol, Plaza Level Tallahassee, FL 32399-0350 William G. Reeves General Counsel Department of Banking and Finance The Capitol Plaza Level, Room 1302 Tallahassee, FL 32399-0350 Susan E. Steinberg Assistant General Counsel Office of the Comptroller 1313 Tampa St., Suite 615 Tampa, FL 33602-3394 Sheldon Voron 775 Tamiami Tr. Port Charlotte, FL 33953
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Petitioner is a Florida corporation headquartered in Boca Raton, Florida. William Kirschner is Petitioner's owner and chairman of the board. Stacey Interlandi is its President and principal broker. Petitioner is in the mortgage lending and brokerage business. All of the mortgage loans it makes are sold to investors. Petitioner held an active mortgage brokerage business registration (No. HB 592567137 00) issued pursuant to former Section 494.039, Florida Statutes, which was effective from September 1, 1990, until its expiration on August 31, 1992. 2/ It currently holds a mortgage brokerage business license (No. MBB 592567137 000) issued pursuant to Section 494.0031, Florida Statutes. The effective date of this license was September 1, 1992. The license expires on August 31, 1994. From October 1, 1989, through September 30, 1991, Petitioner acted as a seller or assignor of mortgage loans and/or a servicer of mortgage loans. Since October 1, 1991, Petitioner has made mortgage loans by advancing funds to mortgage loan applicants. With respect to each of these loans, however, the commitment to advance funds was made prior to October 1, 1991. Since October 1, 1991, Petitioner has sold or assigned mortgage loans to non-institutional investors, but for no monetary gain. Since October 1, 1991, Petitioner has serviced mortgage loans pursuant to agreements into which it entered prior to October 1, 1991. At no time has Petitioner been licensed as a mortgage lender pursuant to Chapter 494, Part III, Florida Statutes. On or about July 31, 1991, the Department sent the following written advisement concerning the revisions made by the 1991 Legislature to Chapter 494, Florida Statutes, to all registered mortgage brokerage businesses, including Petitioner: The 1991 Legislature revised Chapter 494, Florida Statutes, effective October 1, 1991. A copy of the new law is enclosed. Some of the changes which affect mortgage brokerage businesses are: A mortgage brokerage business may not make (fund) loans or service loans. Only mortgage lenders and correspondent mortgage lenders may make (fund) loans. Only mortgage lenders may service loans. A mortgage brokerage business may ONLY act as a mortgage broker. "Act as a mortgage broker" is defined as: "... 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." There are no net worth requirements for mortgage brokerage businesses. A principal broker designation form must be completed and maintained in the principal place of business and a branch broker designation form must be completed and maintained at each branch. The required forms will be sent to your office prior to October 1, 1991. To act as a mortgage broker, a licensed individual must be an associate of a licensed brokerage business and is prohibited from being an associate of more than one mortgage brokerage business. "Associate" is defined as: ". . . a person employed by or acting as an independent contractor for a mortgage brokerage business . . ." Under the new law, no fee or notification to the Department is required when a mortgage broker becomes an associate of your business. However, the license of each mortgage broker must be prominently displayed in the business office where the associate acts as a mortgage broker. Note: The Department will discontinue processing change of status requests under the current law effective August 1, 1991. Mortgage brokerage businesses in good standing which hold an active registration are eligible to apply for licensure as a mortgage lender pursuant to the saving clause. The applicant must have: For at least 12 months during the period of October 1, 1989, through September 30, 1991, engaged in the business of either acting as a seller or assignor of mortgage loans or as a servicer of mortgage loans, or both; Documented a minimum net worth of $25,000 in audited financial statements; Applied for licensure pursuant to the saving clause before January 1, 1992 and paid an application fee of $100. Should you meet the above requirements and wish to apply for licensure as a mortgage lender pursuant to the saving clause or if you wish to apply for licensure as a mortgage lender pursuant to Section 494.0061, please contact the Department for the appropriate application. These applications will be available in early September 1991. THESE CHANGES ARE EFFECTIVE OCTOBER 1, 1991. PLEASE REVIEW THE ENCLOSED COPY OF THE LAW CAREFULLY FOR OTHER CHANGES WHICH MAY AFFECT YOUR MORTGAGE BROKERAGE BUSINESS. As promised, application forms for licensure as a mortgage lender were available the first week of September, 1991. Petitioner requested such an application form on September 18, 1991. The requested form was mailed to Petitioner the following day. On December 31, 1991, Petitioner submitted a completed application for licensure as a mortgage lender pursuant to the "saving clause," Section 494.0065, Florida Statutes. The application was accompanied by an application fee of $100.00 and an audited financial statement reflecting that Petitioner had a net worth in excess of $25,000.00. At the time of the submission of its application, Petitioner had an unblemished disciplinary record.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order granting Petitioner's application for licensure as a mortgage lender pursuant to the "Saving Clause." DONE AND ENTERED in Tallahassee, Leon County, Florida, this 18th day of November, 1992. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of November, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-4313 The following are the Hearing Officer's specific rulings on the findings of facts proposed by the Department: 1-7. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order. 8. Rejected because it is more in the nature of a statement of the law, albeit an accurate one, than a finding of fact. 9-12. Accepted and incorporated in substance. 13. Rejected because it is more in the nature of a statement of the law, albeit an accurate one, than a finding of fact. 14-15. Accepted and incorporated in substance. 16. Rejected because it would add only unnecessary detail to the factual findings made by the Hearing Officer. 17-21. Accepted and incorporated in substance. 22. Rejected because it is not supported by persuasive competent substantial evidence. 24 6/-39. Rejected because they would add only unnecessary detail to the factual findings made by the Hearing Officer. 40. Rejected because, even if true, it would have no bearing on the outcome of the instant case.
Findings Of Fact Respondent, Ann K. Croasdell, was a registered real estate broker at all times material hereto. She has been issued License #0141344. On June 28, 1978, William Young, the owner of apartment #47, 848 Park Lake Circle, Maitland, Florida, conveyed said apartment to Susan B. Bickley. A warranty deed as to this transaction was recorded on June 30, 1978. On April 24, 1979, Bickley conveyed apartment #47, 848 Park Lake Circle, Maitland, Florida, to Respondent. This deed was recorded on April 25, 1979. Thereafter, on April 26, 1979, Respondent conveyed apartment #47, 848 Park Lake Circle, Maitland, Florida, to William Young. The warranty deed was signed by Respondent in Young's presence and Respondent delivered the warranty deed to Young by physically handing it to him after the document had been notarized. The warranty deed from Respondent to Young was not recorded until September 3, 1980. Over a year after she conveyed to Young, Respondent went to Levie Florida Investments, licensed mortgage brokers, and made application for a second mortgage loan on the subject property. Respondent dealt with James Levie, a mortgage banker with Levie Florida Investments. Levie was present when the application was made and saw the Respondent sign the document. His signature also appears on Respondent's mortgage loan application dated August 11, 1980. On August 20, 1980, the closing for the second mortgage on apartment #47, 848 Park Lake Circle, Maitland, Florida, was held. On that date, Respondent executed a mortgage deed and mortgage note from herself to Levie Florida Investments, a certificate of confirmation specifically stating that Respondent was the owner, a notice to first mortgage holder, and a loan closing statement. At that closing, Levie Florida Investments disbursed, to Respondent, its check #5937, in the amount of $6,000.00. The check was signed by James Levie and was delivered to Respondent at the time of closing. Subsequently, the check was negotiated by Respondent and returned to Levie Mortgage marked paid. Respondent never advised Levie Mortgage Company or any of it agents, including James Levie, up to and including the date of closing, that she had executed a deed to the property to any other party. She never indicated to anyone at Levie Mortgage Company or any of its agents that anyone else had any other interest in the property; nor did she ever indicate that she was acting as a trustee, agent or in any other fiduciary capacity on behalf of another person in seeking this loan. Further, Levie was never made aware by anyone, while the transaction was pending, that, in fact, a deed had been executed to another individual. It was not until after the loan had been closed and the mortgage had been placed in default that James Levie ultimately found out that a deed had been executed by William Young. This was discovered when he requested a title search be made by Giles, Hedrick & Robinson prior to the institution of foreclosure action. The evidence was inconclusive as to the reason Respondent failed to inform Levie Mortgage Company as to the ownership status of the property on which she sought and obtained the second mortgage loan. Respondent claims she was serving in a trust relationship with William T. Young at the time. Young denies this relationship existed or that he had knowledge of the second mortgage transaction.
Recommendation In consideration of the foregoing, it is RECOMMENDED: That Petitioner enter a Final Order suspending Respondent's real estate broker's license for a period of three years. 2/ DONE and ORDERED this 21st day of March, 1983, in Tallahassee, Florida. R.T. CARPENTER 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 21st day of March, 1983
