The Issue Whether Petitioner's responses to the mortgage brokers examination administered in April 1995 were properly graded and, if not, whether Petitioner passed the examination? Whether Petitioner's responses to the mortgage brokers examination administered in May 1995 were properly graded and, if not, whether Petitioner passed the examination?
Findings Of Fact Respondent is the agency of the State of Florida responsible for the licensure of mortgage brokers pursuant to Part II of Chapter 494, Florida Statutes. Pursuant to Section 494.0033(2)(b), Florida Statutes, individuals who apply for licensure as a mortgage broker are required to pass a licensure examination. To pass the examination, a candidate must receive a minimum score of 75. National Assessment Institute is the company employed by Respondent to administer the licensure examination. Petitioner applied for licensure as a mortgage broker. On April 25, 1995, Petitioner took the mortgage broker examination. Petitioner was advised that she had achieved a score of only 64. Petitioner was afforded an opportunity to review the examination questions and her answers thereto, and she did so on May 12, 1995. She questioned her failure to receive credit for fourteen of her answers on that examination and provided written explanations why she believed her answers to those questions were correct. Petitioner's written challenges and explanations regarding her answers to those fourteen questions were reviewed by staff of National Assessment Institute. The individual who reviewed Petitioner's responses did not testify in this proceeding. This individual determined that Petitioner's answers to those fourteen questions were incorrect and that her explanations were without merit. Petitioner was advised that she was not entitled to additional credit for her answers on the April 1995 examination. At the final hearing in this cause, Petitioner failed to present any evidence that her April 1995 examination was improperly graded or that she was otherwise entitled to additional credit for her responses to the challenged questions on the examination. Petitioner also sat for the licensure examination administered May 23, 1995. Petitioner received a score of 74 on this examination. On June 9, 1995, Petitioner reviewed the grading of answers to the May 1995 examination. Petitioner asserts that the reviewer gave her the wrong question book so that the answer key would make her answers appear incorrect. For her review on June 9, 1995, Petitioner was provided a correct copy of her examination book, a photo copy of her answer sheet, her original scratch paper, and two challenge sheets. The information provided Petitioner reflected the response to each question the Respondent considered to be the correct response. At the final hearing in this cause, Petitioner failed to present any evidence that her May 1995 examination was improperly graded or that she was otherwise entitled to additional credit for her response to any question on the examination. Petitioner failed to establish that the April or May examination was improperly administered. She likewise failed to establish that the opportunity to review the scoring of these two examinations was compromised by fraud or mistake. The Respondent has promulgated Rule 3D-40.031(2), Florida Administrative Code, which authorizes it to request additional information in conjunction with a licensure application, which information may include the applicant providing evidence of a passing score on the mortgage broker examination. That Rule requires that additional information requested must be received by the Respondent within 90 days. The Respondent requested that Petitioner provide evidence that she had received a passing score on the examination. Petitioner has been unable to provide that information.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order that adopts the findings of fact and conclusions of law contained herein. It is FURTHER RECOMMENDED that Petitioner's challenges to the scoring of the April and May 1995 licensure examinations be dismissed and, consequently, that Petitioner's application for licensure as a mortgage broker be denied. DONE AND ENTERED this 16th day of May, 1996 in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON, 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 16th day of May, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5132 The proposed findings of fact submitted by Petitioner are rejected as they are not supported by the record. While Petitioner purports to explain her answers to certain questions on the April 1995 examination, this evidence was not presented at the formal hearing. The following rulings are made as to the proposed findings of fact submitted by Respondent. The proposed findings of fact in paragraphs 1, 2, 3, 4, and 5 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraphs 6 are adopted in part by the Recommended Order. The fact that Petitioner challenged ten question as a result of her review on June 9, 1995, was not established. Since there was no dispute that the request for formal hearing was timely and this is a de novo proceeding, the proposed findings of fact in paragraph 7 are unnecessary to the conclusions reached. The proposed findings of fact in paragraphs 8, 9,10, 11, 13, and 14 are subordinate to the findings made. The proposed findings of fact in paragraphs 12 and 15 are rejected as being unnecessary to the conclusions reached. COPIES FURNISHED: Ms. Nasrin Y. Niknam 53 Castle Harbour Isle Drive Fort Lauderdale, Florida 33308 Deborah Guller, Esquire Office of the Comptroller Department of Banking and Finance 201 West Broward Boulevard, Suite 302 Fort Lauderdale, Florida 33301 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
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 the time of CMNI's application, Mr. Giunta was president of CMNI and, as such, exercised primary control over the day-to-day activities of CMNI (Tr.12). Mr. Giunta is also the president of Christian Investors Network, Inc. (CINI), and exercised similar control over the activities of that corporation (Tr. 11-12). Mr. Giunta, CMNI, and CINI have never been licensed as mortgage brokers by the Department (Tr. 12-13). CINI, with the knowledge and approval of Mr. Giunta, placed advertisements in the St. Petersburg Times (Tr. 13). One such advertisement appeared in St. Petersburg Times edition of April 20, 1986, under the heading "Loan Information." That advertisement stated "Major Real Estate Financing" and "Residential Real Estate." (Exhibit 1). Sometime in the middle of 1986, Paul Mark called Mr. Giunta in response to an advertisement in the St. Petersburg Times. Mr. Mark was seeking a mortgage loan or loans to build several houses on real estate he owned and so informed Mr. Giunta, who indicated to Mr. Mark that he could arrange a mortgage loan for Mr. Mark (Tr. 28-29). Messrs. Mark and Giunta met shortly after the telephone call. Mr. Mark handed Mr. Giunta a package of documents including a site plan, survey, credit information and a completed mortgage loan application. Mr. Giunta again stated that he would have no problem arranging a mortgage loan for Mr. Mark and requested a fee for such service in the amount of $300.00 (Tr. 30-31). After the meeting, Mr. Mark sent to Mr. Giunta a check made out to Mr. Giunta in the amount of $300.00, together with a letter dated July 16, 1986, confirming that Mr. Giunta would secure mortgage financing (Tr. 31-33); Exhibit 3). In October of 1986, Clifford Clark called Mr. Giunta in response to a newspaper advertisement, seeking a mortgage loan to refinance a certain parcel of property owned by Mr. Clark. Mr. Giunta stated that he could arrange mortgage financing for Mr. Clark at an interest rate of approximately ten percent (Tr. 48-49). After the telephone contact, Messrs. Clark and Giunta met and Mr. Giunta had Mr. Clark fill out a residential loan application (Exhibit 7). Mr. Clark provided Mr. Giunta with originals of his deed to the property and other real estate related documents. Mr. Giunta indicated that he could obtain mortgage financing for Mr. Clark and requested a fee of $250.00, whereupon Mr. Clark gave Mr. Giunta a check for that amount (Tr. 49-51). In early 1986, Robert Miraglia called Mr. Giunta in response to a newspaper advertisement, seeking a second mortgage. Mr. Giunta arranged to meet with Mr. Miraglia to discuss the requested loan. In August of 1986, Russell Foreman contacted Gerald Giunta in response to a newspaper advertisement, seeking a mortgage loan to refinance his home (Exhibit 5). On August 26, 1986, Mr. Foreman met with Mr. Giunta and at Mr. Giunta's request gave him copies of his deed, a survey of the lot, the mortgages to be satisfied and other real estate related documents. Mr. Giunta assured Mr. Foreman that there would be no problem in obtaining a mortgage loan and requested a fee of $200.00. Mr. Foreman wrote a check for that amount and gave it to Mr. Giunta (Exhibit 5). Mr. Giunta never informed Messrs. Mark, Clark, Miraglia and Foreman that he was not a licensed mortgage broker. In approximately April of 1986, Mr. Giunta met with Mr. Arthur M. James, Area Financial Manager for the Department's Tampa Regional Field Office. At that meeting, Mr. James explained to Mr. Giunta that he could not offer to arrange or negotiate mortgage loans on behalf of clients and collect a fee for such service without first becoming licensed by the Department as a mortgage broker (Tr. 84). At some point prior to May 8, 1986, Mr. Giunta was contacted by the Department and informed of the statutes and regulations applicable to advertising his services in the area of real estate financing (Exhibit 2; Tr. 23-24). At some point in 1987, CMNI, with the knowledge and approval of Giunta, listed "Christian Mortgage Network, Inc." in the yellow pages of a local telephone book under the heading of "Mortgages." (Exhibit 1; Tr. 15).
Findings Of Fact Petitioner is the administrative agency charged with responsibility for administering and enforcing the provisions of Chapter 493, Florida Statutes. Respondent, Mortgage Refunds Research and Consulting ("Mortgage"), is a Florida corporation that is wholely owned by Respondent, Richard Vidair. Respondent has sole responsibility for the direction, control, operation, and management of Mortgage. Respondent is not licensed as a private investigator and Mortgage is not a licensed private investigative agency. Respondent is considered by the United States Department of Housing and Urban Development to be a third party tracer. Respondent and his agency locate persons who may be owed refunds for mortgage insurance premiums. From sometime in August, 1990, through May 2, 1991, Respondent contacted individuals who may be owed mortgage insurance refunds by the federal government. Respondent solicited a fee contingent upon actual receipt of the mortgage refund from the federal government. Respondent obtained from the United States government a list of persons owed mortgage refunds. Such lists are available to anyone for a nominal processing fee. Respondent determined the whereabouts of persons named on the list. Respondent either telephoned or mailed a letter to the person named on the list and informed that person of the service offered by Respondent. Respondent included in the letter sent to the person a finder's fee agreement to be signed by the person on the list. Once the contract was signed and returned to Respondent, Respondent provided the person on the list with additional documents to be filled out for the purpose of filing a claim with the federal government. Government refunds were mailed directly to the person on the list. The terms of the finder's fee agreement required the person on the list to pay Respondent's fee within three days of the date the person received his or her money from the government. The agreement further provided that if Respondent's fee was not paid within 30 days, Respondent was entitled to a fee equal to 50 percent of the government refund. Finally, the agreement provided that all collection and legal expenses incurred by Respondent in collecting the finder's fee must be paid by the other party. Respondent received a letter in March, 1991, from the Division of Licensing notifying Respondent that his activities required licensure. After conferring with his attorney, Respondent terminated his activities in Florida but continued his activities outside the state. On October 14, 1987, an attorney for the Division of Licensing issued an internal legal opinion to then Division Director Dave Register. The opinion concluded that persons who engage in the business of locating individuals to whom mortgage insurance premium refunds are due from the federal government are not required to be licensed pursuant to Chapter 493, Florida Statutes. On October 30, 1987, Ken Rouse, General Counsel, Department of State, issued a legal opinion which rescinded the prior internal opinion and concluded that such activities must be licensed.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding Respondent guilty of violating Section 493.6118(1)(g), Florida Statutes, and Florida Administrative Code Rule 1C-3.122(1), imposing an administrative fine of $500 pursuant to Florida Administrative Code Rule 1C-3.113(1)(a)2, imposing an administrative fine of $150 pursuant to Florida Administrative Code Rule 1C- 3.113(1)(b)2, and ordering Respondent to cease all investigative activities until Respondent is properly licensed in accordance with Chapter 493. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 23 day of January 1992. DANIEL MANRY 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 23th day of January 1992.
The Issue The issue in this case is whether Respondents sold subdivided lots in violation of provisions of Chapter 498, Florida Statutes, and, if 80, what penalty should be imposed.
Findings Of Fact Cambridge Park is a mobile home park located in Brevard County, Florida. Respondent Cambridge Park, Inc. owns about 40 contiguous acres of platted and unplatted land, of which the mobile home park is a part. As relevant to this case, the park was originally owned by C.H.K.S., Inc., whose interest was subject to a mortgage in favor of Executive Center. The mortgage contained a release clause that reportedly released lots for payments of about $4000 per lot. In the process of developing the land for use as a mobile home park, on October 5, 1984, C.H.X.S., Inc. dedicated a plat map for the uses described in the map. On September 6, 1985, the Clerk recorded the plat after finding that it conformed with the requirements of Chapter 177, Florida Statutes. The plat of Cambridge Park, Phase I (as it later was known), which contains about nine acres, comprises 25 lots: Lots 1-4 and 5361, Block A, and Lots 1-4, 34-37, and 53-56, Block B. Before selling a significant number of lots, C.H.K.S., Inc. sold the 40-acre tract, including the Cambridge Park subdivision, to a Mr. Coomer. It appears that C.H.K.S., Inc. may have taken back a purchase money mortgage, which was sold to Chrysler Credit Corp. Mr. Coomer held the property for about a year, experienced some difficulty remaining current on the Chrysler Credit mortgage, and reconveyed the property to C.H.K.S., Inc. After it reacquired the property, C.H.K.S., Inc. needed cash to service and possibly reinstate the mortgage debt and develop the property so lots could be marketed. At some stage, another mortgage in favor of Southeast Bank may have been placed on the property, and it may have been in default too. C.H.K.S., Inc. made few if any sales while seeking new capital. At all times, Bonnie Kay remained the sole officer and director of C.H.K.S., Inc., although she probably did not control all of the stock of the company. About four years ago, Ms. Kay married Ralph Bates and is hereafter referred to as Mrs. Bates. Mrs. Bates, who lacked significant real estate experience prior to Cambridge Park, was assisted in real estate matters by her husband. Throughout these complicated transactions, however, Mr. Bates maintained a low profile, such as by taking no ownership or management positions due to pending divorce proceedings. Since the early 1980's, a mortgage brokerage firm known as Northeast Mortgage, Inc. had been operating in Brevard County. Northeast Mortgage originated and sold mortgages, although the company also owned interests in real estate and a; restaurant. The principal of Northeast Mortgage was George Newman. As a result of recommendations from various reputable sources in the community, Mr. and Mrs. Bates contacted Northeast Mortgage to see if it could help them with their capital needs. Neither of them had ever met anyone involved with Northeast Mortgage. At Northeast Mortgage, the Bateses met several times with Respondent Harrington, who was an employee of Northeast Mortgage. Respondent Harrington, who owned an office building with Mr. Newman, had been employed at Northeast Mortgage for three to five years. Respondent Harrington'a duties included the origination of mortgagee and sale of mortgages to private parties. In a short time, the Bateses, Respondent Harrington, and Mr. Newman, who had joined the negotiations, reached an agreement. In return for their assistance in obtaining financing and marketing the lots, Mr. Newman and Respondent Harrington would each receive one-quarter of the profits from the sale of the lot.. In return for their equity (if any) and development work, such as for constructing site improvements, the Bateses would receive one-half of the profits from the sale of the lot. Mr. Newman and Respondent Harrington were also to receive their normal commission; from originating and selling mortgages. Some of these mortgagee would be from C.H.R.S., Inc. and represent, in effect, partial refinancings of the project. Other mortgagee would be purchase money mortgagee given by purchasers of individual lots. The Bateses were 1ikewise to receive their normal payments for development work, which was to be performed by Clyde's Mobile Home Sales, Inc. Clyde's a corporation controlled by Mrs. Bates and possibly Mr. Bates. The agreement was never reduced to writing. By failing to memorialize the agreement, Mr. Newman intended to conceal his equity position from the purchasers of mortgages from Northeast Mortgage. By failing to disclose his interest in the Cambridge Park development, Mr. Newman made it easier to sell the mortgagee. Mr. Newman explained to the Bateses that Northeast Mortgage had to control the finances for the protection of those persona buying mortgagee from 0a company. In May, 1987, the parties executed the first stage of the transaction. On May 20, 1987, C.H.X.S., Inc. and Mrs. Bates individually executed five notes and mortgages in favor of Northeast Mortgage. On May 27, 1987, C. H. K. S., Inc. and Mrs. Bates individually executed a sixth note and mortgage in favor of Northeast Mortgage. The loans appear to have bean for between $16,000 and $43, 000 and were typically repayable by 11 equal monthly payments of a small amount followed by a single, lump-sum payment of the balance. In most if not all cases, Northeast Mortgage immediately sold the mortgages. The loan proceeds probably were used to bring current, satisfy, or obtain partial releases from the existing mortgagee, including those owned by Executive Center and Chrysler Credit, as well as to develop and market Cambridge Park. All of the May, 1987, mortgages given to Northeast Mortgage contained release clauses, According to borrower's closing statements for the six May, 1987, loans, the proceeds were used to pay commissions (of a little less than 101) and origination fees to Northeast Mortgage and typical closing coats to other parties. The closing costs included an item for "title search or policy" that was presumably payable to the closing agent, Atlantic Title & Escrow, Inc. The amounts paid to Atlantic Title for title searches or policies varied directly with the else of the loan, suggesting that mortgagee title insurance policies were contemplated rather than title opinions. For the sex loan closings in May, 1987, the remaining proceeds were divided between C.H.K.S., Inc. and Atlantic Title. The former, as owner of the property and mortgagor, received a total of $20,590.36. Atlantic Title, as closing agent, received a total of $130,768 for disbursement to mortgagees. The funds retained by Atlantic Title were to be paid to Executive Center on the first mortgage, Chrysler Credit on what apparently was a second mortgage, and any other mortgagee, such as Southeast Bank. These payments were necessary to give the May, 1987, mortgagees the priority that they expected to receive.1 According to Mr. Newman, the funds were so used. Although by this time most if not all of the lots in Phase I of Cambridge Park had been released from the mortgage, this payment may have obtained the release of portions of the 40-acre tract that had not been subdivided. In early fall, 1987, at Mr. Newman's suggestion, the Bateses incorporated Respondent Cambridge Park, Inc., which took title to the Cambridge Park property from C.H.K.S., Inc. by various deeds dating from late 1987 through mid 1988. Mr. Newman obtained the legal services of William Block in Titusville to incorporate the new company. Mr. Block, who also owned Atlantic Title, expired shortly after Northeast Mortgage discontinued doing business in the fall of 1988. On November 19 and December 22, 1987, according to borrowers' closing statements, C.H.K.S., Inc. and Respondent Cambridge Park, Inc., respectively, executed two more mortgages in favor of Northeast Mortgage, Inc. in the respective amounts of $25,000 and $55,000. Several lots used to collateralize these mortgages had been used to secure one or more May, 1987, mortgagee. For the November and December mortgages, Northeast Mortgage took no commission, although it did take a mortgage origination fee. This time, no funds were retained by Atlantic Title. C.H.X.S., Inc. received $24,092.25 from the first loan and Respondent Cambridge Park, Inc. received $53,298.40 from the second. Both closing statements reflected costs for "title search or policy." As was the case with the May, 1987, closings, these costs varied directly with the amount of the loan, suggesting the use of mortgagee policies rather than title opinions. As May, 1988, approached, and the balloon notes on the May, 1987, mortgages were about to mature, Mr. Newman and Respondent Harrington contacted the mortgagees and obtained their agreement to rollover the loans for another year on the same terms. Mortgage modification agreements were signed by the mortgagor--C.H.X.S., Inc. (although it no longer owned many of the lots)--but were never signed by the mortgagees, who reportedly agreed verbally to the extensions. On May 17, 1988, Mrs. Bates, as president of Respondent Cambridge Park, Inc., dedicated Phase II of the Cambridge Park. Covering about 15 acres immediately north and west of Phase I, Phase II comprises Lots 35-52, Block A, and Lots 27-33 and 38-52, Block B, for a total of 40 lots. Finding the plat in conformance with Chapter 177, Florida Statutes, the Clerk of the Court recorded the plat on July 15, 1988. Petitioner argues that the plat was defective due to the lack of "Joinders." The Clerk's certificate states that the plat conformed with Chapter 177, Florida Statutes. More importantly, the Opinion of Title does not establish by clear and convincing evidence any deficiencies in the plat or any lack of joinders. Sales of lots in Phase II began in earnest in the first half of 1988. By this time, the roles of the Bateses, Mr. Newman, and Respondent Harrington had evolved from their original arrangement. At all times, Mrs. Bates remained the sole officer, director, and shareholder of Cambridge Park, Inc., as reflected by the corporate records. However, pursuant to their initial agreement, and with Mrs. Bates' knowledge and consent, Mr. Newman and Respondent Harrington acted on behalf of Respondent Cambridge Park, Inc. in financing and marketing matters . In connection with the sale to Mrs. Holcomb, for instance, Respondent Harrington represented to her that he was the vice-president of Respondent Cambridge Park, Inc. He did this in the presence of Mrs. Bates, who did not correct him or object. Based on the evidence, it is clear that Mr. Newman and Respondent Harrington possessed actual and apparent authority to represent Respondent Cambridge Park, Inc. By some point during 1988, Respondent Harrington concentrated almost exclusively on Cambridge Park matters at Northeast Mortgage. Mrs. Bates agreed to allow Respondent Harrington to become a paid employee of Respondent Cambridge Park, Inc. He was to receive $500 weekly, although he withdrew double this amount. During 1988, Respondent Harrington assumed primary responsibility for Cambridge Park, as between him and Mr. Newman. The two men would meet a few times a week so Respondent Harrington could keep Mr. Newman informed of what was happening. There is no evidence that Mr. or Mrs. Bates was aware of what eventually took place, although there is considerable evidence of Mrs. Bates' bad judgment, as she allowed Mr. Newman and Respondent Harrington to handle all corporate matters with little involvement on her part. Prior to October, 1987, corporate checks for Respondent Cambridge Park, Inc. could be signed by any two of Mrs. Bates, Mr. Newman, and Respondent Harrington. Most checks were signed by the latter two because they did not often see Mrs. Bates . Respondent Harrington opened a new corporate account on or shortly after October 9, 1987. The corporate resolution of that date reflects that Respondent Harrington was the president and secretary, Mr. Newman was the vice-president, and an employee of Northeast Title was the secretary. The signature card executed on October 14, 1987, which shows that the account is an escrow account for Respondent Cambridge Park, Inc., authorizes any one of the three "officers" to sign cheeks. The card states that the corporate office was located at an office of Respondent Harrington. Respondent Harrington was the only person authorized to sign checks on a corporate escrow account, according to a signature card executed on December 1, 1987. Mr. Newman admitted that he and Respondent Harrington attempted to keep certain checks from Mrs. Bates, so she would not see who was being paid what. Mr. Newman also testified that Mrs. Bates had no knowledge of the above-described signature cards or corporate resolution. Petitioner produced at the hearing copies of recorded general warranty deeds from December, 1987, through September 30, 1988, corresponding to the 24 transactions cited in the Notices to Show Cause. Each warranty deed represents that the land was free of all encumbrances, such as mortgages. Each deed was promptly recorded following execution (except for one that went unrecorded for 17 day;). Each deed bears a corporate seal and is signed by Respondent Harrington as either president or vice-president of Respondent Cambridge Park, Inc. The notation on each recorded deed concerning documentary stamps shows taxes of between $75 and $110 for most conveyances. At the rate then in effect under Section 201.02(1), Florida Statutes (1987), ($0.55 per $100), the lots were sold for about $13,000 to $20,000 each. Most if not all lot purchasers executed purchase money mortgagee to Respondent Cambridge Park, Inc., which routinely assigned the mortgages to Northeast Mortgage. Northeast Mortgage would assign partial or whole interests in the mortgages to its customers, who included individuals and Fleet Mortgage. Although Fleet Mortgage was sometimes advised that a purchase money mortgage was not a first mortgage, the individual purchasers of mortgages were never so advised, according to Mr. Newman. Mr. Newman admitted that the purpose of this concealment was to induce the purchasers to buy the mortgages. He testified that Respondent Harrington was aware of the deception, but the Bateses were not. The proceeds from the sale of the mortgagee by Respondent Cambridge Park, Inc. would generally be used to pay senior mortgagee and operating expenses of the company. On occasion, Mr. Newman and Respondent Harrington would divert funds from Respondent Cambridge Park, Inc. to a recreational- vehicle development known as Willow Lakes, which Mr. Bates had owned. The Bateses, Mr. Newman, and Respondent Harrington had entered into a verbal arrangement under which the profits from Willow Lakes would be divided by allocating one-third to the Bateses received, one-third to Mr. Newman, and one-third to Respondent Harrington. However, funds received from the sale of mortgages secured by land at Willow Lakes sometimes were deposited in the account of Respondent Cambridge Park, Inc. Apparently toward the end of the arrangement, in an attempt to cover bad checks of Northeast Mortgage, Mr. Newman from time to time would cause Atlantic Title to issue checks payable to Mr. Bates. Mr. Newman would then deposit them in a Northeast Mortgage account without the Bateses' knowledge. Consistent with the representations contained on each warranty deed, Mr. Newman and Respondent Harrington assured each purchaser of a lot that he or she would receive fee simple title to 0a or her lot clear of all mortgages except any purchase money mortgage. Mr. Newman testified that the plan was, following the conveyance to the lot purchaser, to pay off or obtain releases from the other mortgagee, which by this time appear to have been reduced to the 1987 mortgagee from C.H.K.S. to Northeast Mortgage and assigned to third parties, although there is some evidence that the Executive Center mortgage may not have been fully satisfied. Mr. Nawman admitted that he often decided to use the proceeds from the sale of the purchase money mortgages for other purpose, s0 the underlying mortgages were not removed from the property following closing. He testified that Respondent Harrington was "not in all cases" kept informed of Mr. Newman's decisions of this type, and the Bateses ware never so informed. According to Mr. Nawman, he and Respondent Harrington asked Mr. Block at Atlantic Title to prepare the closing documents without any indication of the underlying 1987 mortgages to Northeast Mortgage. Mr. Newman and Respondent Harrington assured Mr. Block that they would clear up the mortgages following closing, but Mr. Block never checked back with them to see if they had. Unknown to Respondent Harrington, Mr. Newman had verbally agreed with Mr. Block that Mr. Newman would share in a percentage of the profits of Atlantic Title. Atlantic Title rarely issued the title commitments or policies called for in the closing documents. Complaints from persons purchasing mortgages from Northeast Mortgage culminated in the appointment of a receiver for the company by the Florida Comptroller in October, 1988. Respondent Cambridge Park, Inc. continued to sell lots for awhile, but eventually complaints from lot purchasers resulted in the commencement of the subject proceeding. Petitioner produced a recorded warranty deed dated June 30, 1988, showing that Curtis Scott Singleton purchased property described by metes and bounds and also known as Lot 50, Block A, pursuant to an unrecorded plat. The Opinion of Title, which fails to find the deed into Mr. Singleton, notes an assignment of mortgage from Northeast Mortgage to a third party, but omits any mention of the origination of the mortgage. Without such information, it is impossible to find, by clear and convincing evidence, that the mortgage assignment evidences an enforceable lien against the property. The Opinion of Title also notes the "possibility of a mortgage encumbrance, n possibly referring to the Executive Center mortgage and a deficiency in the joinder process. This information does not constitute clear and convincing evidence of an outstanding mortgage or a deficiency in the joinder process. Petitioner produced a recorded warranty deed dated June 17, 1988, to Rudolph T. and Patricia B. Heward for property described by metes and bounds and also known as Lot 43, Block B, pursuant to an unrecorded plat. The Opinion of Title notes a quitclaim deed from Respondent Cambridge Park, Inc. Dated August 30, 1988, but omits mention of the warranty deed. The Opinion of Title states that, at the time of the quitclaim deed, a third party held a mortgage for which no record exists of the mortgage's origination. The Opinion of Title also notes the "possibility" of a mortgage similar to that described in the preceding paragraph. On December 28, 1990, a foreclosure judgment was entered against the Hewards in favor of the third party holding the mortgage for which no record exists of its origination. Absent evidence as to whether the Hewards defended the foreclosure action, the evidence is not clear and convincing that the warranty deed to the Hewards was incorrect in the omitting a recorded mortgage (rather than merely an assignment) and absent a clearer indication in the report that another mortgage actually encumbers the property. Petitioner produced a recorded warranty deed dated June 1, 1988, to James C. Sawyer and Lottie A. Sawyer for Lot 34, Blook B. The only potential problem disclosed in the Opinion of Title is the "possibility of a mortgage encumbrance," which has been discussed above. Petitioner produced a recorded warranty deed dated May 12, 1988, to Cheryl L. Pagell Barding, Kevin Watera, and Robert J. Pagell for Lot 56, Block A. Although two mortgagee existed at the time of the conveyance, they were later satisfied. Respondent Cambridge Park, Inc. assigned the purchase money mortgage to "two different parties," but the Opinion of Title does not indicate whether partia1 interests were assigned. In any event, even two assignments of entire interests in the purchase money mortgage would not damage the lot purchasers, who would continue to be liable for only a single mortgage note. Petitioner produced a recorded warranty deed dated June 1, 1988, to John A. Napoli and Rachel Weiner for property described by metes and bounds and also known as Lot 42, Block A, pursuant to an unrecorded plat. The Opinion of Title notes only a quitclaim deed from Respondent Cambridge Park, Inc. Dated August 30, 1988, and a "possibility of a mortgage," as discussed previously. Petitioner produced a recorded warranty deed dated June 1, 1988, to Darl W. Morton and Janet M. Morton for property described by metes and bounds and also known as Lot 41, Block A, pursuant to an unrecorded plat. The Opinion of Title notes a quitclaim deed from Respondent Cambridge Park, Inc. Dated August 30, 1988, a "possibility of a mortgage," and a foreclosure action commenced on a mortgage for which there is no record evidence of its origination. Petitioner produced a recorded warranty deed dated May 23, 1988, to Butord W. Brooka and Carol A. Brooks for property described by metes and bounds and also known as Lot 52, Block A, pursuant to an unrecorded plat. However, the Opinion of Title, which notes a "possibility of a mortgage, did not find the deed. Petitioner produced a recorded warranty deed dated June 24, 1988, to Peggy SUQ Speeker for Lot 61, Block A. The Opinion of Title clearly establishes a problem in this transaction because two undisclosed mortgages existed at the time of the conveyance. One mortgage for $16,000 was to Robert and Barbara Clark and one mortgage for $27,000 was to Edwin and Anna F. Scott. Both mortgagee remain outstanding. Petitioner produced a recorded warranty deed dated June 15, 1988, to John F. Oxendine for Lot 58, Block A. Although two mortgagee existed at the time of the conveyance, they were both released. Petitioner produced a recorded warranty deed dated June 27, 1988, to Robert K. and Susan L. Mast for property described by metes and bounds and also known as Lot 51, Block A, pursuant to an unrecorded plat. The opinion of Title fails to report the warranty deed, but notes an August 30, 1988, quitclaim deed from Respondent Cambridge Park, Inc. and a "possibility of a mortgage." Petitioner produced a recorded warranty deed dated July 27, 1988, to James A. Lichlyter and Deborah D. Johnson for Lot 47, Block A. The Opinion of Title notes a "possibility of a mortgage," which is presently in foreclosure. Petitioner produced a recorded warranty deed dated July 1, 1988, to Willlam Thomea and Julia C. Loeffler for Lot 57, Block A. The opinion of Title notes that two mortgages encumbered the property at the time of the conveyance, but were both satisfied. Although the Opinion of Title states that the satisfactions took place "much later," there is no indication of when, relative to the closing, the satisfactions were obtained or recorded. The opinion of-Title fails to show by clear and convincing evidence that the satisfaction of these mortgages did not conform to the prevailing custom in real estate closings in which satisfactions and releases are not obtained and recorded until after closing. Petitioner produced a recorded warranty deed dated July 6, 1988, to James A. and Dorothy A. Scanzillo for Lot 59, Block A. The opinion of Title notes that two mortgagee encumbered the property at the time of the conveyance, but were both satisfied. Although the Opinion of Title states that the satisfactions took place "much later," there is no indication of when, relative to the closing, the satisfactions were obtained or recorded. Petitioner produced a recorded warranty deed dated July 1, 1988, to Steven J. and Laura A. Allen for property described by metes and bounds and also known as Lot 38, Block A, pursuant to an unrecorded plat. The Opinion of Title reports a corrective quitclaim deed dated August 30, 1988, and a "possibility of a mortgage." The Opinion of Title also notes that Respondent Cambridge Park, Inc. gave Northeast Mortgage a $12,000 mortgage on August 9, 1988, and this mortgage remains outstanding. There is no information as to when the mortgage was recorded. It is likely that Respondent Cambridge Park, Inc. did not have record title on July 1, 1988, so a corrective deed was necessary. Absent evidence of when Respondent Cambridge Park, Inc. obtained title, however, it is impossible to find by clear and convincing evidence that the August 9 mortgage is enforceable. Petitioner produced a recorded warranty deed dated August 15, 1988, to Daniel A. and Barbara White for Lot 30, Block B. The Opinion of Title clearly discloses a problem in this transaction. Aside from a "possibility of a mortgage," the Opinion of Title reports that, at the time of the conveyance to the Whites, the property was encumbered by a mortgage in the amount of $7000 in favor of B. Wright, and the mortgage remains outstanding. Petitioner produced a recorded warranty deed dated June 1, 1988, to H. Roger and Darlene R. Parsons for Lot 54, Block B. The Opinion of Title notes that the grantor, Respondent Cambridge Park, Inc., did not have title at the time of the conveyance. On June 14, 1988, C.H.K.S., Inc. conveyed title to Respondent Cambridge Park, Inc. by quitclaim deed. A mortgage encumbering the property at the time of the conveyance by warranty deed was later satisfied. Petitioner produced a recorded warranty deed dated July 27, 1988, to Leon R. and Virginia D. Cronk for Lot 51, Block B. Aside from noting the possibility of a mortgage," the Opinion of Title reports that the Cronks defaulted on their purchase money mortgage and lost the land in the ensuing foreclosure action. Petitioner produced a recorded warranty deed dated February 24, 1988, to Charles A. and Hilda N. Hobday for property described by metes and bounds and also known as Lot 42, Block B, pursuant to an unrecorded plat. The Opinion of Title fails to find the deed into the Hobdays, but reports the "possibility of a mortgage." Petitioner produced a recorded warranty deed dated February 24, 1988, to Duayne Charlea Paguette for property described by metes and bounds and also known as Lot 41, Block B, pursuant to an unrecorded plat. The Opinion of Title fails to find the deed into Mr. Paquette, but reports the "possibility of a mortgage." The Opinion of Title notes an outstanding mortgage, but does not indicate the origination of the mortgage. Petitioner produced a recorded warranty deed dated September 30, 1988, to Joseph Wayne and Catherine Marie Holcomb for Lot 44, Block A. The Opinion of Title reports the "possibility of a mortgage," for which a foreclosure action is pending. Petitioner produced a recorded warranty deed dated December 18, 1987, to Rick Eugene and Sherry Rae Greene for Lot 54, Block A. The grantor, Respondent Cambridge Park, Inc., did not have title to the property at the time of the conveyance, but acquired title from C.H.X.S., Inc. by quitclaim deed dated January 8, 1988. Respondent Cambridge Park, Inc. then gave the Greenes a corrective warranty deed. The Opinion of Title clearly discloses a problem in this transaction. Two mortgages existed at the time of both warranty deeds. One was in the amount of $16,000 to Robert H. Clark and his wife. The other was in the amount of $27,000 to B. Wright. The Clark mortgage was later satisfied, but the Wright mortgage was not and is in foreclosure. Petitioner produced a recorded warranty deed dated September 9, 1988, to George W. and Peggy A. Bauer for Lot 44, Block B. The Opinion of Title discusses several matters involving this transaction. The only matter approaching clear and convincing evidence of a title problem arises when, on August 9, 1988, Respondent Cambridge Park, Inc. gave a mortgage to Northeast Mortgage, which assigned it on August 15. However, the Opinion of Title does not report, as it does in other cases, that the August 9 mortgage remains outstanding. Other matters are mentioned as possibilities or, in the case of two mortgages, fail to include record evidence of the origination of mortgages. Petitioner produced a recorded warranty deed dated August 12, 1988, to William D. Newman for Lot 40, Block A. The Opinion of Title reports only a "possible" competing interest in the property. Petitioner produced a warranty deed dated June 20, 1988, to Charles LaMattina for property described by metes and bounds and also known as Lot 48, Block A, pursuant to an unrecorded plat. The Opinion of Title fails to find the warranty deed, but reports a quitclaim deed from Respondent Cambridge Park, Inc. dated August 30, 1988. Otherwise, the Opinion of Title reports a "possibility of a mortgage" and the assignment of a mortgage for which no record of origination was found. In sum, the Opinion of Title establishes by clear and convincing evidence title problems in three transactions: Lot 61, Block A (two outstanding undisclosed mortgages); Lot 30, Block B (one outstanding undisclosed mortgage); and Lot 54, Block A (one outstanding undisclosed mortgage). There is no problem with the title status of 10t 54, Block B for reasons discussed in the Conclusions of Law. In addition to Lot 54, Block B, the opinion of Title establishes that Lot 56, Block A; Lot 57, Block At Lot 58, Block A; and Lot 59, Block A suffer no title defects. The status of title for the remaining 16 lots is unclear. The record establishes that the following 10 "lots" were not sold as subdivided lots, but rather were sold by metes and bounds: Lot 38, Block A; Lot 41, Block A; Lot 42, Block A; Lot 48, Block A; Lot 50, Block A; Lot 51, Block A; Lot 52, Block A; Lot 41, Block B; Lot 42, Block B; and Lot 43, Block B. 0f these parcels, only Lot 41, Block B was sold prior to the dedication of the plat for Phase II on May 17, 1988. At no time did either Respondent possess a valid order of registration from Petitioner or establish a valid reservation program, nor did anyone ever provide lot purchasers with any public offering statement.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Division of Florida Land Sales, Condominiums and Mobile Homes enter A final order finding each Respondent guilty of 20 violations of Section 498.023(1), 20 violations of 498.023(2), and two violations 498.051(1)(b); ordering each Respondent to cease and desist from future violations of Chapter 498; ordering Respondent Harrington to pay a fine of $20,000, subject to reduction as provided below; ordering Respondent Cambridge Park, Inc. to pay a fine of $20,000, subject to reduction as provided belongs ordering Respondent Cambridge Park, Inc. to provide the purchasers of the 20 lots for which a public offering statement should have been provided with written notice giving them seven days from receipt to exercise their right to rescind their purchases; and ordering both Respondents to establish an escrow account to assure the payment of refunds to those 20 lot owners timely electing to rescind and the payment of such sums necessary to provide the nonelecting lot owners from among those 20 owners with clear and marketable title to their lots. Each Respondent will receive a 100% credit against his or its S20,000 fine for all moneys actually deposited into the escrow account or actually and reasonably expended in clearing the title. ENTERED this 2nd day of October, 1991, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalaches Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of October, 1991.
The Issue The Administrative Complaint presents essentially the same factual allegations in its various counts supporting different legal violations. These factual allegations are summarized as follow: Reinlie represented to Estelle Pitts that if she put up the earnest money deposit for her son, William Lambert, on the commercial property that Lambert wanted to purchase in the form of notes secured by mortgages on her house: (1) the mortgages and notes would not be a lien on her property; (2) the mortgages and notes would not be recorded; (3) the mortgages and notes would be returned to her when Lambert obtained financing for the property he desired to purchase; (4) the mortgages and notes merely showed good faith on Lambert's part regarding his offer to purchase; (5) Lambert's contract for purchase was contingent upon the sale of commercial property which he owned in South Florida; and (6) even if the sale to Lambert did not go through, Mrs. Pitts would not be responsible for the mortgages and notes. Contrary to his representations, Reinlie recorded the various mortgages and notes executed by Estelle Pitts. Contrary to his representations, Reinlie advised Estelle Pitts that she would be responsible for the mortgages and notes, and that if said notes were not satisfied "foreclosure proceedings would be initiated." Petitioner called Estelle Pitts, who testified concerning the representations made by Reinlie. Reinlie testified, denying that he had made said representations. William Lambert was the only other person present when most of these alleged representations were made. Lambert, who had suffered a physically debilitating stroke, could not attend the hearing, and his deposition was received into the record. Lambert's recollection of the events was wholly supportive of neither his mother's nor Reinlie's recollection of the events. None of the witnesses were disinterested: Reinlie's license was in jeopardy; Mrs. Pitts' home was in jeopardy; and Lambert is Mrs. Pitts' son. The conflicts in testimony can only be resolved from extrinsic facts and the credibility of the witnesses. Having considered the facts, the testimony of Reinlie is deemed more credible. Both parties submitted post hearing proposed findings of fact in the form of a proposed recommended order. To the extent the proposed findings of fact have not been included in the factual findings in this order, they are specifically rejected as being irrelevant, not being based upon the most credible evidence, or not being a finding of fact.
Findings Of Fact The following Findings of Fact are based upon the prehearing stipulation of the parties: At all times in question, the Respondent, James Reinlie, Jr., was a registered real estate broker in the State of Florida and is the holder of license number 0112757. The parties were duly noticed pursuant to the provisions of Chapter 120, Florida Statutes (1981). William C. Lambert, Estelle Pitts' son, did not have the necessary money with which to furnish a deposit to the sellers of the Robin Hood Motel at the time the contract for sale and purchase and the addendums thereto were executed. A contract for sale and purchase was executed on August 11, 1979, and August 13, 1979, between Irene B. Smith, seller, and William C. Lambert, Sr., buyer, for the purchase of the Robin Hood Motel, located at 1150 North Atlantic Avenue in Daytona Beach, Florida. Respondent Reinlie was a co-broker on that contract. On August 13, 1979, an addendum to the contract for sale and purchase was executed between Irene B. Smith, seller, and William C. Lambert, Sr., buyer. On January 7, 1980, and January 8, 1980, a second addendum was executed under the original contract for sale and purchase between Irene B. Smith, Gilbert Brown and Liselotte M. Brown, sellers, and William C. Lambert, Sr., buyer. On August 13, 1979, a mortgage deed and mortgage note were executed by Estelle Pitts and Linda L. Smith (Mrs. Pitts' daughter) as mortgagor, to B.I.C. Realty, Inc., escrow account, as mortgagee, said note in the principal amount of $5,000 and secured by a first mortgage on 900 West New York Avenue, Deland, Florida, also known as: . . . the east 60' of the north 150' of Lot 1, Block I, Stetson Home Estates MB 10, page 79, Volusia County, Florida; Said property is the residential home of Estelle Pitts with title in the names of Estelle Pitts and Linda L. Smith. On October 16, 1979, a second mortgage was executed by Estelle Pitts and her daughter, Linda L. Smith, dated November 1, 1979, and secured by a mortgage note in the amount of $5,000 on the residential home of Estelle Pitts, said property being described in detail in paragraph 7 above. On October 16, 1979, a third mortgage was executed by Estelle Pitts and her daughter, Linda L. Smith, dated November 1, 1979, and secured by a mortgage note in the amount of $5,000 on the residential home of Estelle Pitts, said property being described in detail in paragraph 7 above. On August 17, 1979, Respondent Reinlie took the first mortgage deed and mortgage note to The Abstract Corporation and instructed that it be recorded in the public records of Volusia County, Florida, said first mortgage deed and mortgage note in the amount of $5,000 dated August 11, 1979, and executed August 13, 1979. On November 29, 1979, Reinlie took the second mortgage deed and note to The Abstract Corporation and instructed that it be recorded in the public records of Volusia County, said second mortgage deed and note in the amount of $5,000 dated November 1, 1979, and executed October 16, 1979. On December 4, 1979, Reinlie took the third mortgage deed and note to The Abstract Corporation and instructed that it be recorded in the public records of Volusia County, said third mortgage deed and note in the amount of $5,000 dated December 1, 1979, and executed October 16, 1979. On May 2, 1980, Estelle Pitts notified Reinlie that she wanted the aforesaid mortgages and notes returned to her immediately. On May 14, 1980, Reinlie notified Mrs. Pitts that he would not return the mortgages and notes and had been advised by the "former" owners of the Robin Hood Motel that they desired to pursue their full deposit, plus expenses, under the contract and, if necessary, would foreclose the mortgages and notes in order to enforce their legal rights. On May 19, 1982, Reinlie executed three satisfactions of mortgages on the three mortgages and notes referred to in paragraphs 7, 8 and 9 above upon the advice of counsel. The following Findings of Fact are based upon testimony and evidence adduced at the hearing: Reinlie did not state to Mrs. Pitts that the mortgages would not be recorded and would not be a lien on her property. (See Lambert deposition, pages 11 and 12.) William Lambert was aware that the mortgages and notes were to be recorded and would be a lien on his mother's property. Mrs. Pitts did not understand the transaction and the terms thereof, although Lambert explained it to her. (See Lambert deposition, page 13.) The contract for purchase was not contingent upon the sale of Lambert's motel in Hollywood, Florida. Lambert signed the contract and was presumably aware of its terms. Reinlie did not represent to Mrs. Pitts that the contract for purchase was contingent upon the sale of her son's motel in Hollywood. (See transcript, page 20.) It was Lambert's intent to replace the mortgages on his mother's home with cash he would obtain from the sale of his motel in Hollywood. By substitution of the cash for the mortgages and notes, it was Lambert's understanding that his mother's home would not be "used," i.e., that her home was not in danger of foreclosure. However, Lambert realized that the money would have to be substituted for the mortgages and notes. Lambert felt that he could sell his Hollywood motel prior to the closing date on the Robin Hood Motel. Had Lambert sold his motel in Hollywood prior to said closing, the mortgages and notes on his mother's house would have been cancelled, i.e., "returned" to her. Lambert initially advised Reinlie that his mother owned her home free and clear. At that time, both Lambert and Reinlie were seeking the means for Lambert to come up with the earnest money deposit, which does show a "good faith offer." Reinlie suggested the use of Mrs. Pitts' home to secure the deposit. Lambert discussed this matter with his mother, who agreed and executed the various mortgages and notes. Reinlie did not make the primary approach to Mrs. Pitts, and it was Lambert who primarily explained the transaction to her. Both Lambert and Mrs. Pitts stated that they failed to understand the terms and effect of the mortgages and notes. The addendum to the contract provides that the buyer will provide the seller within five days of the date of the contract a mortgage title binder showing the $5,000 deposit mortgage to be a first mortgage. Their failure to understand the transaction was not due to any misrepresentations or lack of explanation to them by Reinlie. The original closing date was set for late October 1979. When Lambert was unable to sell his Hollywood motel, Reinlie arranged for extensions of the closing date, the first until early December, and the second until January 1980. The considerations for these two extensions were the second and third mortgages and notes. After these were prepared, without signatures, they were delivered to Lambert, who in turn returned each of the executed documents to Reinlie shortly before Reinlie recorded them. Reinlie was not present when said mortgages and notes were executed. Around Thanksgiving 1979, when it became evident that Lambert was having difficulty closing, Reinlie suggested that the contract, which was similar to an option, be sold. Although the contract would have had to be discounted, it would have reduced the potential loss. Reinlie attempted unsuccessfully to do this. Reinlie's suggestion of this course of action did not assure the sale of the contract. (See transcript, page 91.) By late January 1980, when Lambert could not close, Reinlie attempted to obtain an additional extension, which the sellers refused to grant. At that time, the contract for purchase was in default. In the spring of 1980, the sellers made demand upon Reinlie for their deposit money. Reinlie advised both Lambert and Mrs. Pitts of the sellers' demand and sought to obtain mortgage financing for Mrs. Pitts in lieu of initiating a foreclosure action. Mrs. Pitts did not elect to borrow the money. Lambert tendered $5,000 to Reinlie in order to settle the matter, which was rejected by the sellers. The sellers renewed their demand that Reinlie pay them their escrowed deposit. In a meeting with the sellers, Rein lie pointed out that if he foreclosed the mortgages there would be additional delay and legal costs. Because the notes had an interest rate of ten percent and were secured by the mortgages, Reinlie suggested that nothing be done during the life of Mrs. Pitts, but a claim be made against her estate. The sellers determined that this was a better approach than forcing Reinlie to foreclose on the mortgages. Thereafter, all of the parties determined that they desired to settle the matter. Reinlie advised the sellers that he would release the mortgages and notes to Mrs. Pitts if they, in turn, would release him from his obligation to pay them the escrowed money. This was finally done and the matter resolved on that basis.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law that the Respondent, James Reinlie, Jr., did not violate Sections 475.25(1)(b), (d) or (j), Florida Statutes, it is recommended that the charges filed against him in the Administrative Complaint be dismissed. DONE and RECOMMENDED this 25th day of May, 1983, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, 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 25th day of May, 1983. COPIES FURNISHED: John G. DeLancett, Esquire James R. Mitchell, Esquire 801 North Magnolia Avenue, Suite 402 Post Office Box 6171-C Orlando, Florida 32853 Irving Gussow, Esquire Highway 17-92 Post Office Box 965 Fern Park, Florida 32730 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 William M. Furlow, Esquire Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 =================================================================
Findings Of Fact At all times material hereto, Respondent John E. LeMieux (Respondent LeMieux) was a licensed real estate broker in the State of Florida, having been issued license numbers 051596 and 0266128 in accordance with Chapter 475, Florida Statutes. The last licenses issued were as a broker in care of Retco Realty, Inc., 5942 SW 73rd Street, South Miami, Florida 33143, and as a broker in care of Retco Kassner, Inc., 7311 SW 59th Court, Miami, Florida 33143. At all times pertinent hereto, the Respondent Retco Realty, Inc. (Respondent Retco) was a corporation registered as a real estate broker in the State of Florida, having been issued license number 0141149 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 5942 SW 73rd Street, South Miami, Florida 33143. At all times pertinent hereto, Respondent LeMieux was licensed and operating as the qualifying broker and officer of Respondent Retco. Kenneth and Regina Davis have been married for 12 years and have four children. Both are high school graduates, but neither had been involved in a transaction to purchase real estate prior to the one involved in this proceeding. Ms. Davis is a housewife. Mr. Davis repairs and restores wrecked automobiles. Prior to their dealings with Respondents, the Davises and their four children lived in a rented, two bedroom duplex. In February 1990, Mr. and Mrs. Davis began looking for a house to purchase after their landlord threatened to evict them. The landlord objected to the number of children living in the duplex and to Mr. Davis's practice of parking several cars at the duplex. Because of the threatened eviction, the Davises were anxious to find alternative housing. Mr. and Mrs. Davis saw an advertisement in the Miami Herald for a house located at 14700 South West 104th Place, Miami, Florida. They went to the house on Sunday, February 18, 1990, and, after looking at the house from the outside, decided that they liked the house and called the telephone number listed in the ad on February 18, 1990. In February 1990, Investor's Choice International, Inc., a corporation that was owned and operated by Respondent LeMieux at all times pertinent to this proceeding, owned the house that interested the Davises. Investor's Choice had first acquired the property in 1985 and had subsequently sold the property to Marva Pitter. Respondent LeMieux assisted Ms. Pitter in obtaining a first mortgage on the premises from Savings of America and his corporation took a second mortgage on the premises. Investor's Choice reacquired the property after Ms. Pitter defaulted on the second mortgage and executed a deed to Investor's Choice in lieu of an action to foreclose the second mortgage. Investor's Choice continued to pay the first mortgage to Savings of America, but there was no formal assumption of that first mortgage by Investor's Choice. Respondents had placed the ad for the house, and the number listed was the office of Respondent Retco. Barbara Couret, the Respondents' secretary, answered the Davises's telephone call and promised to have Respondent LeMieux return the call. Later that day Respondent LeMieux talked with Mrs. Davis by telephone, at which time Mrs. Davis gave Respondent LeMieux her and her husband's social security numbers so Respondent LeMieux could check their credit. Mrs. Davis and Respondent LeMieux agreed to meet the following day. The meeting on February 19, 1990, was cancelled when Respondent LeMieux failed to show up and the Davises went home after having waited for him at his office for approximately one hour. That evening Respondent LeMieux called the Davises, apologized for not being able to meet with them as scheduled, and arranged to meet them the following day at Respondent LeMieux's offices. On February 20, 1990, Respondent LeMieux called and changed the location of the meeting to the Pink Flamingo Restaurant on South Dixie Highway, Miami, a location that was mutually convenient. Mr. and Mrs. Davis met with Respondent LeMieux for the first time on February 20, 1990, in the parking lot of the Pink Flamingo Restaurant. At the meeting, Respondent LeMieux told the Davises that he had checked their credit and that he did not believe they would qualify for a FHA loan. Respondent LeMieux told the Davises that his company, Investor's Choice, owned the property and that he would sell it to them for the price of $52,000. The purchase price would be paid as follows: the Davises would pay $2,000 down; they would assume payment of the first mortgage held by Savings of America of approximately $43,000; and they would execute in favor of Respondent LeMieux's corporation a purchase money second mortgage of $7,000. Respondent LeMieux told the Davises that they would have to make an additional payment on the second mortgage of $2,000 around May 1, 1990, when they received their income tax refund. The monthly payment on the first mortgage was to be $367 and the monthly payment on the second mortgage, which was to bear interest at the rate of 12% per annum, was to be $150. One monthly check, in the aggregate amount of $517, was to be paid by the Davises to Respondent Retco Realty. Respondent LeMieux viewed the financing arrangements as a temporary solution to the Davises's credit problems, and he structured the transaction to accommodate those problems. Pursuant to their agreement, the Davises were to live in the house until permanent financing could be arranged. At all times pertinent to this proceeding, Respondent LeMieux was familiar with the terms of the Savings of America first mortgage. He knew that the mortgage was an assumable, variable rate mortgage that provided the borrower with the option of negative amortization in the event the interest rates increased and the borrower wanted to keep his or her monthly payments at a constant level. He knew that the interest rate was tied to an established index and could fluctuate on a monthly basis. He knew that the first mortgage was assumable if the borrower qualified, but otherwise had a "due on sale" clause. The amount of the monthly payment was important to the Davises because of their budgetary constraints. They knew that they would have difficulty paying the $367 first mortgage and the $150 second mortgage, but they felt they could comfortably pay the first mortgage once the second mortgage was paid off. Respondent LeMieux estimated during the meeting of February 20, 1990, that the second mortgage would be paid off around July 1993, assuming that the Davises made the payments to which they agreed, including a payment of $2,000 around May 1, 1990. There is a dispute in the testimony as to what was said about the first mortgage at the meeting between Respondent LeMieux and the Davises on February 20, 1990. From the conflicting testimony, it is found that Respondent LeMieux informed the Davises that the first mortgage was assumable, but that their credit report would not qualify them to assume the mortgage. Respondent LeMieux told them that they would have to clear up their credit problems during the time they were paying off the second mortgage so that they could qualify for a FHA mortgage or, in the alternative, formally assume the Savings America first mortgage, and that title would not be conveyed to them until permanent financing was arranged. As a result of the meeting with Respondent LeMieux on February 20, 1990, Mr. and Mrs. Davis's understanding of the transaction was that the first mortgage payment was fixed, that the interest rate was fixed, and that they would be able to assume the first mortgage (or secure their own mortgage) after they cleared up their credit problems. They would not have entered into the transaction had they known that the interest rate on the first mortgage was variable. Respondent LeMieux asserts that he told the Davises that the mortgage had a variable rate of interest that could fluctuate monthly, and that, because the mortgage permitted negative amortization, the monthly payments could remain constant. This testimony is rejected based on the testimony of Mr. and Mrs. Davis and that of Petitioner's investigator, Hector F. Sehwerert, who testified that Respondent LeMieux told him that he could not specifically recall whether he told the Davises that the first mortgage contained a variable rate. The evidence clearly and convincingly establishes that Respondent LeMieux failed to explain to the Davises that the first mortgage contained a variable interest rate which could cause the monthly payment to fluctuate. Respondent LeMieux knew or should have known that the Davises were relying on his explanation as to the terms of the first mortgage in deciding whether to enter into the subject transaction. He also was aware that the Davises were unsophisticated buyers who were most concerned with the monthly payments they would have to make. His explanation of the terms of the first mortgage misled the Davises into believing that the first mortgage was a fixed rate mortgage and that the payments would remain constant. The Davises did not sign a contract at the meeting of February 20, 1990, but Respondent LeMieux gave them a copy of a contract with the terms of the proposal they had discussed filled out. The Davises took this contract home to think over the transaction. On the evening of February 20, 1990, the Davises gave Respondent LeMieux a check in the amount of $1,000 as a down payment on the house. The following day, the parties executed the contract with the Davises signing as purchasers and Respondent LeMieux signing as president of Investors' Choice International, Inc., the seller, and as president of Respondent Retco Realty, the broker to whom a $2,000 commission was to be paid. The following language appears immediately above the signature line of this form contract: "REALTOR ADVISES BOTH PARTIES TO CONSULT AN ATTORNEY AND FOR THE PURCHASER TO SECURE TITLE INSURANCE." The Davises did not receive the services of an attorney because Ms. Couret told them that an attorney should not be necessary and because they trusted Respondent LeMieux. The contract required a down payment of $2,000 (the receipt of the sum of $1,000 was acknowledged) with the Davises assuming the first mortgage of approximately $43,000 and executing a purchase money second mortgage in the sum of $7,000. The following clauses are found in the contract: 2. ASSUMPTION OF FIRST MORTGAGE: The Purchaser, subject to the lending institution's requirement, including an interest rate of change, if any, agrees to assume an existing First Mortgage of approximately $43,000. Payable at approximately $367 monthly with Homestead Exemption which payment includes principal and interest at existing interest rate on mortgage held by Savings of America. ... * * * 7. NEW PURCHASE MONEY SECOND MORTGAGE: The Purchaser shall execute a purchase money second mortgage and note in favor of (sic) for $7,000.00 payable at $150.00 monthly until paid, including principal and interest at 12% per annum. Said mortgage shall be prepayable without penalty. Documentary stamps, intangible tax and recording mortgage shall be paid by Purchaser. * * * 13. SPECIAL CLAUSES: Purchaser to assume existing 1st mtg. (sic) with Savings of America of approx. (sic) $43,000. Seller to give Buyer a Purchase Money 2nd Mtg. (sic) of $7,000 at 12% per annum, payable $150./mo. (sic) with a $2,000 balloon pmt. (sic) due May 1, 1990. On March 2, 1990, the parties executed an addendum to the contract they had executed on February 21, 1990, which clarified that the Davises were to pay ad valorem taxes and insurance and which contained, in pertinent part, the following: It is understood and agreed that the seller is conveying title at such time as the Purchase Money Second Mortgage of $7,000 is retired; unless that sum is prepaid, the anticipated date of payment in full will occur on or about July 1993. Both parties agree that payment to the first and second mortgages must be made on time, and in the event that these payments or real estate taxes or insurance shall fall into default, that this contract shall be cancelled and all monies forfeited. As an additional incentive for the seller to extend these terms to the buyer, the buyer agrees to make the first and second mortgage payment to the seller's office at 5942 SW 73 Street, Miami, Florida 33143 on or before the first of each month. The aggregate total of these payments will be $517 per month effective April 1, 1990. Both parties understand that the March payment of $367 is now due. Also on March 2, 1990, the Davises paid the Respondents the sum of $1,000, representing the balance of the down payment, paid the sum of $367 representing the March 1990 payment on the first mortgage, and moved into the house. When the Davises received their income tax refund in April 1990, Mrs. Davis went to the Respondents' office to pay the sum of $2,000 on the second mortgage. (This was the payment contemplated by the Special Clauses paragraph of the contract executed February 21, 1990.) At that time Respondent LeMieux informed Mrs. Davis that the sum of $314 was due for insurance on the house and he agreed to accept the sum of $1700 as the lump sum payment on the second mortgage so Mrs. Davis could pay the insurance premium. In addition to the annual insurance premium in the amount of $314 paid by the Davises in April 1990, they paid the annual insurance premium in the amount of $314 in April 1991, and the ad valorem tax bill for 1990 in the amount of $605.89. From March 30, 1990 through April 30, 1991, the Davises made 14 monthly payments in the amount of $517 each by check payable to Respondent Retco Realty. These payments were hand delivered by Mrs. Davis and were always timely made. The Davises and their children liked the house and the neighborhood. During the time the Davises were in the house, they made repairs and improvements worth approximately $500. On May 29, 1991, Mrs. Davis went to Respondents' office to make a regular $517 monthly payment. At that time Respondent LeMieux met with Mrs. Davis and told her that the interest rate on the first mortgage was variable, that the payments on the first mortgage had gone up, and that his second mortgage was not making any money. Prior to this meeting, the Davises did not know that the first mortgage was not a fixed rate mortgage or that the first mortgage payments were subject to change and had changed. At the meeting on May 29, 1991, with Mrs. Davis, Respondent LeMieux prepared a document entitled "Letter of Understanding", and asked Mrs. Davis to sign it on her own behalf and on behalf of her husband. Respondent LeMieux was to sign the Letter of Understanding as president of Investor's Choice International. The Letter of Understanding provided, in pertinent part, as follows: Both parties acknowledge that the existing first mortgage of approximately $43, 500 (sic) held by Savings of America contains a variable interest rate, which is adjusted monthly, and therefore causes the monthly mortgage payments to either increase or decrease by a particular number. Currently the mortgage payment is $477.48. The mortgage also contains a "due-on-sale" clause, and that is why pursuant to the contract dated February 20th, 1990 between the Davises and Investor's Choice, no deed was ever conveyed so as to prevent triggering any "due-on-sale" clause that may cause the mortgage to go into default and subsequent foreclosure. To date, the Davises have made 13 payments of $517 each for a grand total of $6,721. To date, Investor's Choice has paid Savings of America $5,884.69; therefore the difference that was paid to Investor's Choice on that certain second mortgage of $7,000 pursuant to that contract of February 1990 is $836; of which $636 is interest and $200 is principal. Therefore, after the principal reduction that the Davises have made during the course of the last twelve months, namely $1,700 plus $200 by virtue of their monthly installments, the current mortgage balance is $5,100. The parties have agreed that Mrs. Davis will pay $100 toward the principal balance this month, May 1991, leaving a principal unpaid balance due Investor's Choice of $5,000. Said mortgage to be payable at the rate of 12% per annum, interest only monthly, or $50 per month. If Mr. and Mrs. Davis elect to make principal reduction in said mortgage, they will be receipted for same, and the interest payment per month would drop accordingly. Mrs. Davis refused to sign the "Letter of Understanding". After discussing the matter with her husband, the Davises obtained through legal aid the services of attorney Candis Trusty. Ms. Trusty negotiated an agreement with the Respondents' attorney, Robert Korschun, whereby the Davises would be reimbursed the sum of $3,899, they would vacate the premises by September 1, 1991, and they would deposit the sum of $500 into Ms. Trusty's trust account as security for damages to the premises. The Davises did not move out of the premises until September 8, 1991. Thereafter, Respondent LeMieux inspected the premises and informed Ms. Trusty that there were no damages to the premises beyond normal wear and tear, and that he would therefore make no claim on the damages deposit. Respondent LeMieux did assert a claim against the Davises in the amount of $166.67 for unpaid rent for the days they occupied the premises beyond September 1, 1991. Because of the dispute over rent, Ms. Trusty retained, as of the formal hearing, the sum of $166.67 in her trust account. At the formal hearing, Respondent LeMieux continued to assert his entitlement to the rent from the Davises in the amount of $166.67, but he acknowledged that the funds the Davises deposited in Ms. Trusty's trust account were not intended to secure rent and that he had no claim to that particular fund. In October of 1988, Petitioner filed an Administrative Complaint against Respondents which is unrelated to the present proceeding. That Administrative Complaint contained certain factual allegations which charged that Respondents were guilty of "fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction, all in violation of Subsection 475.25(1)(b), Florida Statutes (1988)." This Administrative Complaint was referred to the Division of Administrative Hearings and assigned DOAH Case No. 88-5771. Respondents settled that prior matter and executed a Stipulation which they neither admitted nor denied the allegations of the Administrative Complaint. Respondents were reprimanded and fined in the amount of $400.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding the Respondents guilty of having violated the provisions of Section 475.25(1)(b), Florida Statutes, which assesses an administrative fine in the aggregate amount of $500 against the Respondents, and which places the licensure of both Respondents on probation for a period of six months. DONE AND ENTERED this 15th day of January, 1993, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 15th day of January, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-1906 The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner. The proposed findings of fact in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 10, 11, 13, 14, 15, 16, 17, 18, 19, and 22 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 9 are adopted in part by the Recommended Order, but are rejected to the extent the proposed findings are contrary to the findings made. The proposed findings of fact in paragraphs 12 and 20 are adopted in part by the Recommended Order, but are rejected to the extent the proposed findings are unnecessary to the findings made. The proposed findings of fact in paragraph 21 are rejected as being unnecessary to the conclusions reached. The following rulings are made on the proposed findings of fact submitted on behalf of the Respondents. The proposed findings of fact in paragraph 1 are adopted in material part by the Recommended Order. The proposed findings of fact in the first sentence of paragraph 2 are rejected as being contrary to the findings made. The findings of fact in the last sentence of paragraph 2 are rejected as being unnecessary to the findings made. The remaining proposed findings of fact contained in paragraph 2 are adopted in material part by the Recommended Order or they are subordinate to the findings made. The proposed findings of fact in the first sentence of paragraph 3 are rejected as being unsubstantiated by the evidence or as being unnecessary to the findings made. The proposed findings of fact in the second sentence of paragraph 3 are adopted to the extent that the Respondents's standard form contract contains the advice for the parties to seek the services of an attorney. The proposed findings of fact in the third sentence of paragraph 3 are adopted in material part by the Recommended Order. The proposed findings of fact in the fourth sentence of paragraph 3 are adopted in part by the Recommended Order, but are rejected to the extent that said proposed findings state that Respondent LeMieux was acting to accommodate the Davises. The proposed findings of fact in the fifth sentence of paragraph 3 are rejected since the Davises appeared to understand why the payments on the first mortgage went up after Respondent LeMieux informed Mrs. Davis that the mortgage had a variable interest rate. The proposed findings of fact in the last sentence of paragraph 3 are adopted in part and are rejected in part as being unnecessary to the conclusions reached. The proposed findings of fact in paragraphs 4, 5, and 6 are adopted in part by the Recommended Order or are subordinate to the findings made. The proposed findings of fact in paragraphs 7 and 8 are rejected as being contrary to the evidence or as being unnecessary to the findings made. Both Mr. and Mrs. Davis understood the explanation of the transaction Respondent LeMieux made to them before they signed the contract. That they became confused on cross examination is unnecessary to the conclusions reached in this proceeding. Her confusion as to the meaning of a fixed rate mortgage and the assumability of the mortgage is subordinate to the findings made that Respondent LeMieux did not lie to them about the status of the interest rate on the first mortgage. The statements made by the attorney they consulted during the settlement negotiations are also unnecessary to the conclusions reached in this proceeding. The proposed findings of fact in paragraph 9 consists of argument and are unnecessary as findings of fact. The proposed findings of fact in paragraph 10 are adopted in part by the Recommended Order with the exception of the last sentence, which is rejected as being argument and unnecessary as a finding of fact. The proposed findings of fact in paragraph 11 are rejected as being unnecessary to the conclusions reached. COPIES FURNISHED: Theodore R. Gay, Esquire Department of Professional Regulation 401 Northwest Second Avenue Suite N-607 Miami, Florida 33128 Jorge Gaviria, Esquire 2222 Ponce de Leon Boulevard Mezzanine 200 Coral Gables, Florida 33134-6193 Darlene F. Keller, Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Jack McRay, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact At all times pertinent to the allegations herein, the Petitioner, Department of Banking and Finance, (Department), was the state agency in Florida responsible for the regulation and licensing of mortgage brokers in this state, and Respondent, Harriet Ijames, was a licensed mortgage broker. On February 17, 1989, Respondent entered into a Stipulation, Consent Agreement and Final Order with the Department whereby she was placed on probation for 2 years for misconduct relating to the misappropriation of mortgage application fees, with the further requirement that she not act independently but under the supervision of a broker acceptable to the Department. On October 2, 1991, the Department filed a complaint against the Respondent alleging she had violated the terms of the prior Consent Order by conducting business as a mortgage broker without the requisite supervision. Thereafter, on April 29, 1992, Respondent entered into another Stipulation, Consent Agreement and Final Order with the Department regarding the October, 1991 complaint by which she was again placed on probation conditioned upon her operating only under the supervision of an approved broker. This latter Order provided that any violation thereof would be automatic grounds for immediate and summary revocation of her license and also imposed an administrative fine of $2,000.00. The Final Order incorporating that agreement was issued by the Department on July 13, 1992. In May, 1992, Respondent was contacted by Rhudine M. McGhee, a resident of Tampa, who had been referred to her by a mutual acquaintance. Mrs. McGhee indicated she was interested in purchasing another house. Somewhat later, Respondent contacted Mrs. McGhee and told her of a friend who had a house for sale. She also gave Mrs. McGhee the addresses of some other houses in the area which were for sale. Mrs. McGhee did not like any of them. Thereafter, Respondent advised Mrs. McGhee that she was a mortgage broker and not a real estate broker, and that she would have a real estate broker contact her. Respondent also offered to provide Mrs. McGhee with listings of Resolution Trust Corporation foreclosures in the desired price range. Some time later, the broker referred by Respondent showed Mrs. McGhee a house she liked and she signed a contract to buy it. In the interim, Respondent had taken a credit application from the McGhees over the phone and followed up with a visit to the McGhee home. On May 13, 1992, during the visit to the McGhee residence, Respondent had Mrs. McGhee sign a loan application. On that same visit, she solicited and received from Mrs. McGhee a check for $300.00, payable to the Respondent and subsequently endorsed and cashed by her, which reflected the check was the application fee for a loan. She specifically asked that the check be made to her, personally. When Mrs. McGhee asked Respondent about the check, she was told it would be credited to the purchase price at time of closing. This was not done and it was only later, after a complaint was filed with the Department, that Mr. Brigliadora, the mortgage broker with whom she was affiliated, repaid the fee from his company's funds. Though at hearing Respondent denied she took a loan application fee or that the check she received was for that purpose or bore any notation to that effect when received, Mrs. McGhee is quite certain she put that notation on the check at her husband's direction at the time she gave it to Respondent. Respondent claimed the check was for finding the house but Mr. McGhee specifically recalls Respondent indicating the check was to be an application fee to be credited against the purchase price. It is so found. On June 1, 1992, Respondent again returned to the McGhee home to have them sign a second loan application. This time Mr. McGhee was not at home and Respondent suggested to Mrs. McGhee that she sign her husband's name to the application. This was done. Respondent did not give the McGhees copies of the applications they signed but said she would bring them copies at a later date. This was never done. Though Respondent also denies soliciting the second application, her apparent signature appears on both application forms and it is found she did both solicit and sign the forms and the application fee check. The first application was for a loan of $80,000.00 at 8.5 percent. The second was for $36,000.00 at 8.625 percent. At the time of the solicitation, Respondent was employed by Frank Brigliadora, a licensed mortgage broker and owner of the Money Tree Mortgage Co. However, neither Respondent nor Mr. Brigliadora had notified the Department of their arrangement or obtained Departmental approval of the supervisory relationship. Clearly, Respondent knew the taking of an application fee, as the evidence indicates she did here, was inappropriate. Sometime in mid 1992, Respondent approached George Banks, a licensed mortgage broker in Tampa and owner of his own brokerage company, with a view toward working for him. In their conversation about that, they discussed the practice of application fees. Respondent indicated she wanted to take a fee of $200.00 to $300.00 up front, but Banks felt this was not proper, advised her so, and declined to accept her as a broker. Even when she claimed that other brokers took fees of this nature, he demurred, claiming he did not endorse the practice. Respondent worked for Mr. Brigliadora, a licensed mortgage broker, at his firm, Money Street Mortgage, for approximately 3 months during 1992. At the time she went to work for him, Respondent did not tell him she was under sanctions by the Department to have strict supervision and at no time did he agree to the Departmental supervision program. Mr. Brigliadora did not receive the $300.00 check Respondent obtained from the McGhees nor did he ever get the money it represented from the Respondent. It was only just before or at the closing on the property that he first became aware of the deposit. When he refunded the money to the McGhees, Respondent agreed to reimburse him but she never did. Normally, Money Street Mortgage does not take application fees on residential loans, and Mr. Brigliadora denies he ever approved or suggested to Respondent that she solicit them. When Respondent gave him the documentation on the McGhee loan application it did not include the required good faith estimate found in the brokerage agreement nor did the application form or any other document make the required disclosures. The application he got from Respondent does not constitute a brokerage agreement and Mr. Brigliadora never got one from the Respondent on this loan. What he received is no more than an application for a loan. Mr. James, the Department's Area Financial Manager, whose job includes the assignment of examiners and the review of investigations by examiners, knows Respondent as a licensed mortgage broker under Chapter 494, Florida Statutes. He is aware of prior complaints received by the Department about the Respondent in the past. Two of them relate to the Final Orders previously mentioned herein. In the instant case, he recalls receiving a telephone call regarding a deposit of $300.00 given to Respondent and commenced an investigation into the incident. The current Administrative Complaint which resulted in this hearing was the outcome of that investigation. Based on his evaluation of the matters discovered in the investigation, he concluded that Respondent took a fee from a client without having a brokerage agreement with that client; failed to make the required full disclosure to a client; and misappropriated a fee which she received from a client; all of which are violations of various provisions of Chapter 494. In his official capacity with the Department, Mr. James had the duty to approve a supervisory mortgage broker for the Respondent as called for in the two prior Final Orders referred to previously herein. Neither Money Street Mortgage nor Mr. Brigliadora were submitted by Respondent for approval by the Department even though Respondent knew she was required to do so. Respondent claims she made it very clear to Mrs. McGhee that she was a mortgage broker and not a real estate broker. Nonetheless, Mrs. McGhee, she claims, insisted Respondent help her and offered to pay her for her efforts. Respondent claims that all Petitioner's witnesses lied about her and forged documents relating to her alleged activities. She denies she would ever cheat or disobey the rules because she knows she would lose her license if she did. Claiming she is well respected in the community, she asserts the Department did not thoroughly investigate the allegations against her and is, therefore, destroying her reputation over something which did not happen as alleged. Her assertions are not accepted, however.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: Recommended that a Final Order be entered in this case finding her guilty of the offenses alleged in the Administrative Complaint filed herein; revoking Harriett Ijames' license as a mortgage broker in Florida; and imposing an administrative fine of $5,000.00. RECOMMENDED this 24th day of May, 1993, in Tallahassee, Florida. ARNOLD H. POLLOCK 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 24th day of May, 1993. COPIES FURNISHED: Lisa L. Elwell, Esquire Office of the Comptroller 1313 Tampa Street, Suite 615 Tampa, Florida 33602-3394 Harriett Ijames 8341 Paddlewheel Street Tampa, Florida 33617 Gerald Lewis Comptroller State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 William G. Reeves General Counsel Department of Banking and Finance Room 1302 The Capitol Tallahassee, Florida 32399-0350
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
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.
