The Issue The issue in Case No. 94-2065 is whether National Mortgage Bankers, Inc. violated certain disciplinary proceedings governing mortgage brokers and, if so, what penalty should be imposed. The issue in Case No. 94-2066 is whether National Mortgage Bankers, Inc. is entitled to licensure as a correspondent mortgage lender.
Findings Of Fact As of September 3, 1992, the Department of Banking and Finance, Division of Finance (Department), issued a mortgage lender's license to National Mortgage Bankers, Inc. (NMB). At all material times, NMB acted as a mortgage broker, not a mortgage lender. NMB originated mortgaged loans, which were funded by third parties. NMB's principal place of business was in Pt. Charlotte. At all material times, Sheldon Voron was employed as the chief executive officer of NMB. Business was slow for NMB during the first few months after it acquired its mortgage lending license. NMB was operated by Mr. Voron, who supervised loan officers and the processing of loan applications, and Mark Asciutto, who handled bookkeeping, payroll, and the checking accounts, including the escrow account. Mr. Asciutto left the company in September 1993. By the end of 1992, the net worth of NMB was $89,115.23, according to an audited financial statement issued on February 12, 1993. The net worth deteriorated during 1993, dropping to $63,533 by December 31, 1993, according to an audited financial statement issued on March 7, 1994. At no time did NMB ever advise the Department that its net worth was below $250,000. In early 1993, business picked up from late 1992, and NMB hired a second loan processor. Refinancing activity in early 1993 required that NMB continually add new help. At this time, the approval of uncomplicated conventional loan applications took 30-45 days, and the operation ran smoothly. But business continued to increase. From March to June, NMB opened up offices in Naples and Sarasota. A branch in office in Englewood was opened and quickly closed due to its proximity to other offices. By April, the volume of business at NMB was increasing rapidly, aided in part by the addition of government loans. An average of 75 cases monthly during the first three months increased to 125 cases in April. Employing four to five loan processors, NMB continued to hire additional employees, but soon had problems finding qualified persons, as competition in the lending business was increasing due to considerable refinancing activity. Mr. Asciutto handled the escrow account during these busy months, until another employee assumed these duties in late July or August 1994. Mr. Asciutto routinely transferred money from the escrow account to the general operating account when Mr. Asciutto determined that NMB was entitled to retain the money, such as when customers had not been responsive to inquiries from NMB employees. The only such transfer for which a specific amount was identified at the hearing was $860, which was swept from escrow to general operations by check dated April 16, 1993. As is obvious from the trend in net worth, profitability did not increase in direct proportion to increases in business volume. In fact, total income increased from $82,716.01 in 1992 to $556,907 in 1993, but net income increased only from $30,714.88 to $43,528. NMB simply could not keep up with the business, as is evidenced by the experiences of its customers. In July 1993, William Zinser read an NMB advertisement in the newspaper offering an adjustable mortgage rate and a low fixed-rate mortgage. He called the number and set up an appointment to visit the office. He met with an employee of NMB, who discussed interest rates and closing fees. She assured Mr. Zinser that it would take only about 30 days to close the loan. Mr. Zinser submitted a loan application, and the employee said NMB would be back in touch with him. Mr. Zinser waited three or four weeks and heard nothing. He called and was told that there were no problems. On two or three occasions, an NMB employee requested from Mr. Zinser a profit and loss statement or a verification of his wife's income. However, NMB had the wife's income information since the start of the loan application process and twice had received the profit and loss statements. On January 4, 1994, Mr. Zinser applied for a loan with another lender. Shortly thereafter, an NMB employee called him and said that his loan was approved. When he said that he had gone elsewhere, she reminded him that he had obligated himself to pay a $1250 fee in connection with the loan. He refused to pay. On or about July 15, 1993, Janice Hamann first contacted NMB about refinancing her home. She applied for a mortgage, and an NMB employee asked for more information. She supplied it the following day, and the employee said everything was fine. The employee said that it would probably take 4-6 weeks to close. On August 13, 1993, Ms. Hamann called NMB to check on the status of the loan application. An NMB employee said that they would probably close when she returned from a week's vacation. On August 23, Ms. Hamann called and was told to provide some additional information on her payment history. She provided the requested information by September 20. For a second time, she had to provide verification of her husband's employment. On September 18, Ms. Hamann received notification from her homeowner's insurer that they had changed her insurance, evidently to show a new loss payee. No one from NMB had told her that the loan was ready to close. A couple of months later, surveyors showed up and surveyed the property that was to have been the subject of the loan and additional property. Ms. Hamann called NMB and informed them of the mistaken inclusion of additional property. On November 22, Ms. Hamann called NMB and said that she wanted her paperwork and was withdrawing her application. Ten days later, someone from NMB called her and said they were ready to close. Ms. Hamann restated her demand for her paperwork and refused to close. A few days later, she received a letter demanding $1500 in addition to the $300 that she had paid for the credit check, survey, and appraisal. She still receives bills from the surveyor. On September 9, 1993, Richard Chadbourne contacted NMB about refinancing a mortgage. At the first office visit, he completed an application and delivered a check to NMB in the amount of $300. An NMB employee said they would contact him for more information and said it would take 30-45 days to close his loan. At the first meeting, Mr. Chadbourne stated that he wanted the 3.259 percent variable rate mortgage with a six point cap, which NMB was offering. An NMB employee said that they could get him a 3.375 percent rate. On the one or two occasions that NMB contacted Mr. Chadbourne for more information, he provided it to them immediately. Repeated calls to NMB by Mr. Chadbourne or his agent were never returned. No one from NMB ever called Mr. Chadbourne to tell him whether his loan was approved or denied, and he never withdrew his application. On September 10, 1993, Katherine Healey and her husband visited the NMB office to apply for a refinancing loan. Responding to a newspaper advertisement for a 3.375 percent interest rate, the Healeys learned that they would have to pay $1250 in fees to obtain such a low rate. They agreed to pay the sum. They were asked only for salary information and certain documentation concerning their liabilities. An NMB employee said they could lock in the quoted rate when they returned from vacation in a couple of weeks. After returning from vacation, the Healeys called NMB repeatedly, but often could not find anyone to speak to or to return their calls. When they finally talked to someone about their loan, they were told they had to pay another $100 or $150 to lock in at 3.375 percent. They continued calling NMB without much success for two months after returning from vacation. They could not get a closing date, and nothing was happening. In response to their repeated requests to lock in an interest rate, they were told only that they could not lock in until two weeks before closing. By the end of November, the Healeys applied elsewhere for a refinancing loan. Shortly after the Healeys applied elsewhere for a loan, which closed about three weeks later, they received a call from an employee of NMB, who told them that they had a closing date. They said that they had decided to obtain a loan elsewhere. The employee demanded the $1250 fee, which the Healeys had not yet paid, and threatened to sue them if they did not pay. The Healeys refused to pay the fee and were able to use the appraisal, for which they had already paid, with their new application. However, they had to pay for a second credit report. In November 1993, Wendy Harrison contacted NMB for two mortgages--one on a home in Massachusetts and one on a home in Punta Gorda. She filed mortgage applications on or about December 15, 1993, but, by mutual agreement, she withdrew her application on the Florida home. Ms. Harrison subsequently left several telephone messages that were not returned. In January, she was assigned a new loan processor, who still did not return calls. Around this time, Ms. Harrison's husband received a notice from the mortgagee on the Florida property concerning a payoff amount. The Harrisons contacted NMB and told them that this was the wrong property. Mortgage rates began to increase in January. Ms. Harrison called repeatedly on the status of her mortgage refinancing from mid-January to mid- March. A new person assumed loan processing duties on her file. She called Ms. Harrison on or about March 9 and said that the credit report raised some problems. This was the first time either Mr. or Ms. Harrison had been told that there were problems with the credit report, which NMB had received in late December. Ms. Harrison mailed the requested explanatory documents on the following day. Two weeks later, after hearing nothing, Ms. Harrison called NMB and learned that the interest rate would be 8 percent annually, which was higher than the rate in effect when she initiated the loan approval process. The NMB employee explained that the higher rate was due to the fact that the Massachusetts property was a rental property, but NMB employees had known that from the start. However, the NMB employee assured Ms. Harrison that the file was complete and being forwarded to Miami for final approval. The following day, Ms. Harrison sent a certified letter withdrawing the application and asking for the appraisal and any other services for which she had already paid. NMB received the letter on March 26. On April 5, Ms. Harrison found in her mailbox an unstamped, uncancelled envelope that had evidently been hand- delivered by an NMB employee or agent. Inside was a rejection letter backdated to March 23, so as to look like the Harrison application had been rejected before it was withdrawn. Based on customer complaints, the Department financial examiner conducted an unannounced inspection of NMB from November 15-17, 1993. In addition to discovering a violation of the minimum net worth requirement imposed upon mortgage lenders, the examiner found several violations of requirements imposed upon mortgage brokers. At no time did NMB disclose in writing that it could not guarantee acceptance into a particular loan program and could not promise any specific loan conditions or terms. When taking applications, NMB failed to disclose the nature of the mortgage brokerage fee charged by NMB. The fee varied according to the terms of the loan, and NMB only disclosed a broad range of fees at the time of the application. NMB received monies from customers, but did not record check numbers for checks used to pay vendors on behalf of specific customers. NMB thereby failed to maintain an updated record of escrow account activity on an appropriate form. In fact, NMB had the Department-promulgated form, but, as discussed below, used it improperly to try to record mortgage brokerage transactions. NMB did not maintain supporting documentation for monies paid from its escrow account on behalf of customers. NMB often used courier prepayments to pay unrelated expenses. NMB did not record the dates and amounts paid out of escrow. NMB maintained a mortgage brokerage transaction journal, but it lacked the date the customer applied for the mortgage loan, the date of disposition of the application, the total amount of brokerage fees, and the name of the lender. NMB used the Department-promulgated form for escrow account activity and tried to adapt it for mortgage brokerage transactions, but failed to include the above-cited crucial items of information. Concerning NMB's application for a correspondent mortgage broker's license, there is evidence, in at least one case, of fraud or deceit. Ms. Harrison, who was very credible, described an act of fraud or dishonest dealing in the postdating and delivery of her rejection letter. The atmosphere of incompetence and neglect that prevailed at NMB might well have left a typed letter unmailed for days or even weeks. However, an employee or other agent committed a wilful act of deceit in driving the letter out to Ms. Harrison's home and leaving it in the mailbox, rather than simply dropping it in the mail.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Banking and Finance enter a final order revoking the mortgage lender's license of National Mortgage Bankers, Inc. and denying its application for licensure as a correspondent mortgage lender. ENTERED on November 3, 1994, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings on November 3, 1994. COPIES FURNISHED: Hon. Gerald Lewis Comptroller The Capitol, Plaza Level Tallahassee, FL 32399-0350 William G. Reeves General Counsel Department of Banking and Finance The Capitol Plaza Level, Room 1302 Tallahassee, FL 32399-0350 Susan E. Steinberg Assistant General Counsel Office of the Comptroller 1313 Tampa St., Suite 615 Tampa, FL 33602-3394 Sheldon Voron 775 Tamiami Tr. Port Charlotte, FL 33953
The Issue The issue in this case is whether Petitioner has carried her burden of proving that her application for licensure in Florida as a loan originator should be granted.
Findings Of Fact The undersigned makes the following findings of material and relevant facts: The Office of Financial Regulation ("Respondent," "Office," or "OFR") has regulatory jurisdiction over loan originators and is responsible for the administration and enforcement of the provisions of chapter 494, Florida Statutes, which includes the approval or denial of applications for licensure as loan originators. Aliette Oliva ("Petitioner" or "Oliva") applied for a license as a loan originator and is the party that is affected by the decision of Respondent to deny her application for licensure as a loan originator. Petitioner's address of record is 13525 Southwest 83rd Avenue, Pinecrest, Florida 33156. On or about May 25, 2016, Respondent issued Petitioner a Notice of Intent to Deny Application for Loan Originator License, which denied Petitioner's application for licensure on the basis that Petitioner had a license, or the equivalent of such license, to practice any profession or occupation revoked or otherwise acted against by the State of Florida, citing provisions of chapter 494, particularly section 494.00255. The license in question, that had been permanently revoked, was Petitioner's real estate salesperson license with the Department of Business and Professional Regulation, Florida Real Estate Commission ("FREC"), revoked in Final Order No. BPR- 2003-02017. The Final Order incorporated an Administrative Complaint issued by the FREC against Petitioner, Case No. 200181619. The Final Order also incorporated an Affidavit for the Voluntary Surrender of License, Registration, Certificate/Permit for Permanent Revocation, which was voluntarily signed by Petitioner on April 30, 2003, with input and counsel from her attorney. Resp. Ex. 3. The certified copy of the Administrative Complaint in question, moved into evidence by Respondent, is missing page three. Resp. Ex. 3.1/ It was stipulated by the parties that Oliva had an active mortgage broker license with Respondent, license number MB0859332, from April 6, 1998, until December 31, 2010. Oliva attempted to modify the terms of the revocation of her real estate license by filing a Motion for Modification of Terms of Revocation, filed with the FREC. This motion was denied by the FREC in their Order Denying Reconsideration dated January 12, 2016. Jason Booth, a supervisor in the Bureau of Finance Regulation, OFR, made the recommendation to deny Oliva's application for licensure as a loan originator that is the subject of this proceeding. Booth then forwarded his recommendation to the legal staff and to the director of OFR, who ultimately denied the license to Oliva. The allegations of fraud in the 2003 Administrative Complaint filed by the FREC were significant factors supporting Booth's recommendation to deny Oliva's application for licensure. In Booth's opinion, "Fraud is the most egregious type of violation that someone in the industry would be held accountable for." In further support of his recommendation to deny Oliva's application for licensure, Booth testified that Count 37 in the Administrative Complaint was also a factor. Booth testified that Count 37 alleges that this would be the second time that Oliva had been found guilty of conduct or misconduct that warranted the suspension of her license. Booth also testified that another factor in support of his recommendation to deny Oliva's application for licensure was that Oliva's Motion for Modification of Terms of Revocation filed with the FREC on or about October 9, 2015, was denied on January 12, 2016, as per a FREC order, an order that was not appealed or contested. In addition, Booth explained that the importance of the motion and the FREC order was that the FREC did not wish to revisit its prior action, which also supported Respondent's recommendation to deny Oliva's license application. When asked by counsel for Petitioner if Respondent must automatically deny an application if the applicant has had a license from another agency previously revoked, Booth answered "maybe." Regarding the determination of whether to approve or deny applications where the applicant has had a license previously revoked, Booth was asked if Respondent has any reasoning or criteria it uses to determine whether an application for a loan originator license should be approved or denied. Booth responded by stating that there is "no criteria" and that those determinations are made on a "case-by-case basis." Other than the allegation in Count 37 regarding Petitioner "having been found guilty a second time of any misconduct that warrants his [sic] suspension," there was no evidence presented to explain or confirm the details of this allegation. Similarly, despite questions to Booth about any results from the Federal Bureau of Investigation or the Florida Department of Law Enforcement criminal background checks, there was no evidence presented revealing any criminal convictions or criminal conduct by Oliva. There was also no evidence presented to explain why the FREC denied Oliva's Motion for Modification of Terms of Revocation, or its reasoning. Edward Geraghty, branch manager for ResMac, the company for which Oliva is currently employed, is licensed with the Respondent as a loan originator. His license number is 320745. Geraghty stated that Oliva has worked as a loan coordinator and processor for Geraghty's branch since December of 2015. Oliva assists loan officers and Geraghty's processing team in obtaining mortgages for ResMac's applicants, as well as processing loans. Geraghty hired Oliva because of her experience and her knowledge about products and about guidelines, which he stated is very hard to find in his industry. As an employee, Geraghty described Oliva as very knowledgeable, proactive, and helpful in the ResMac office, and stated that she uses her experience to assist some of ResMac's less-experienced loan officers. Geraghty has no concerns over her honesty and trustworthiness and had never seen anything that would give him any doubt about Oliva's honesty and trustworthiness. Finally, Geraghty stated that he and his office have seen nothing in any of Oliva's files or tasks that has given them any questions about her abilities. Marina Greenfield has been a friend of Petitioner for ten years. Greenfield trusts Oliva explicitly and stated that she is a great person. Greenfield testified that during a period of economic misfortune for her family, she, her husband, and her two children were practically homeless. Oliva allowed them to stay at her home with her family. Greenfield testified that, if it had not been for Oliva, she would have been in a very bad place and that she cannot speak any more highly of her. During the hearing, the undersigned admitted deposition transcripts of three witnesses: Carlos Cabezas, Mayra Alderete, and Octavio Diaz, without objection, all of which have been reviewed by the undersigned. Cabezas works for ACC Mortgage as an account executive, has known Oliva for 15 years in a professional context, and has worked with Oliva intermittently during those 15 years. Cabezas described Oliva as very professional, with very high ethical standards and very strong work ethics. Alderete has known Oliva for 15 or 16 years as a former client and as a friend. Alderete described Oliva as honest, that she has integrity and good character, helps everyone that needs it, and stated that she is professional. Diaz, a Florida licensed real estate broker for Midtown Realty International, Inc., testified that Oliva worked with him from 2000 to 2003 as an associate realtor. Diaz wrote a letter of support for Oliva and described Oliva as very professional and truthful. Petitioner also offered 13 letters of support, which were admitted into evidence. These letters corroborated and supplemented the testimony given by the character witnesses present at the hearing. The letters of support were written by friends; members of the community; professionals in the community, including several who are licensed with Respondent; and a family member. The letters of support collectively confirm that Oliva is a woman of good moral character, is honest and trustworthy, has integrity, is a model citizen, and contributes a substantial amount of her time to charity and community service. Elio Oliva, Petitioner's husband, is a police officer. He began his career working for the City of Hialeah Police Department from 1988 to 1998. From 1999 to 2003, Elio Oliva was detached to the Drug Enforcement Agency ("DEA") and worked as a "Task Force Agent." During the period the subject FREC Administrative Complaint was opened and pending against Oliva, and when her real estate license was revoked, Elio Oliva had been working to infiltrate a Colombian drug cartel money laundering organization. He worked undercover for a year and a half in this role. The extent of his involvement in this undercover operation is explained in United States v. Puche, 350 F.3d 1137 (11th Cir. 2003). A copy of this case was admitted into evidence as Petitioner's Exhibit 4. Elio Oliva testified that his undercover work and infiltration of the drug cartel was very dangerous. He testified that, if the cartel knew he was an undercover DEA agent, they may have stopped dealing with him or killed him. Elio Oliva performed his undercover operations in Miami and was allowed to go home to his actual residence. After the Puche trial, Elio Oliva had local police and U.S. Marshals surveilling his house for protection. Elio Oliva testified that during the time the FREC fraud case against Petitioner was active and pending, Oliva shared with him that her identity had been stolen. After having a discussion with his wife about who would have access to her personal information, he testified that they concluded that the people who stole Oliva's identity were Igor and Harold Kuntz, two brothers that were involved in the real estate office where Oliva had been working from 1999 to 2000. The undersigned found it significant that, other than this evidence from Elio Oliva and Petitioner, there was no independent evidence offered to corroborate or prove that Oliva's identity had been stolen. For instance, there were no police, law enforcement, or other investigative reports to show that any identity theft had been reported by Oliva, investigated by law enforcement, or had, in fact, occurred. At the time the FREC Administrative Complaint was filed against Petitioner, their son was an infant. Elio Oliva explained that Petitioner was "going through a lot" and that he was not home much because of his undercover work. Elio Oliva testified that Petitioner was told by her attorney at the time to sign the Voluntary Relinquishment so the Administrative Complaint could "go away." Elio Oliva stated that Petitioner was advised to "do the wrong thing." Oliva expressed to her husband that she did not want their name out there and did not want people finding out who Elio Oliva was.2/ Elio Oliva stated that Petitioner voluntarily relinquished her real estate license for the safety of the family. Elio Oliva has been married to Petitioner for 25 years. He described her as an extraordinary human being, a giver, and unselfish. Elio Oliva testified that his wife never committed fraud, misrepresentations, or concealment. Elio Oliva stated that Oliva is "a victim" and that, because of his law enforcement experience, he knows that "bad things happen to good people." Alluding to the alleged theft of Oliva's identity and the resulting revocation of her real estate license, he testified that "in this case, that is what happened to her." During Petitioner's testimony, she explained her employment with several mortgage and real estate companies: Raurell Investment Corporation; Fidelity Plus; Capital Mortgage Providers; Millennium 2000; and Midtown Realty International, Inc. Oliva currently works for ResMac, where she works with the loan originators to get their files ready for underwriting and works in tandem with the loan processors, who perform the final review of the file. Regarding the FREC Administrative Complaint, her voluntary relinquishment of her license, and FREC's Final Order revoking her real estate license, Oliva testified that she was unaware that she had a Final Order entered against her. She testified that she never received a copy of the Final Order. Oliva surrendered her license at the direction and on the advice of her attorney. The Certificate of Service section of the FREC Final Order shows that a copy of the Final Order was sent to the same attorney in Miami, Florida, who had notarized Petitioner's signature on the affidavit which voluntarily relinquished her license, and the senior attorney for the Department of Business and Professional Regulation ("DBPR"). Despite signing the affidavit marked as Respondent's Exhibit 3, page 4, and voluntarily relinquishing her real estate license in response to the FREC 37-count Administrative Complaint, Oliva testified that she is not the person who committed the actions alleged in the FREC Administrative Complaint. Oliva stated she believed that her identity had been stolen by Igor and Harold Kuntz. She testified that, after one of the people Oliva suspected of stealing her identity died, no additional illicit transactions under her real estate license occurred. As support for her claim that she was not the culpable party identified in the FREC fraud complaint, Oliva testified that she could not have committed one of the fraud transactions alleged in the Administrative Complaint because she was caring for her infant son at the time, in February 2001.3/ Because of Elio Oliva's undercover activity, and because Elio Oliva had been involved in two police shootings in 1991 and 1997, Oliva testified that she was not doing well mentally at the time she relinquished her real estate license. In addition, Elio Oliva had not yet been cleared by the state attorney for a shooting incident in 1997 during the time the FREC Administrative Complaint was filed, which also was difficult for her. Oliva's counsel in the fraud case told her that it would be nearly impossible to prove that her identity had been stolen because of the nature of the identity theft and that it would cost a lot of money to contest the allegations. Her counsel also told her that everything was going to go away after she signed the Voluntary Relinquishment form. She claimed that the personal security provided to the family by the police and the U.S. Marshals, the fear of retaliation by the drug cartel against whom Elio Oliva had just testified in Puche, the safety and health concerns of her family, her desire to protect her family, and the pressure from her counsel at the time all factored into her decision to voluntarily relinquish her real estate license. Oliva applied for a loan originator license because of financial concerns, as her family has two children in college, with one more about to go to college, and her husband is retiring soon. Oliva believes she is qualified, that she is a good person, and that she has lived her life in a way that allows her to be an example for her family, friends, and clients.
Recommendation Based on the foregoing Findings of Fact and Conclusions of law, it is RECOMMENDED that the Office of Financial Regulation enter a final order denying Aliette Oliva's application for a loan originator license. DONE AND ENTERED this 4th day of January, 2017, in Tallahassee, Leon County, Florida. S ROBERT L. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of January, 2017.
The Issue The issue presented for decision herein is whether or not Respondent unlawfully refused to honor a subpoena issued by Petitioner as is more particularly set forth hereinafter in detail.
Findings Of Fact Respondent, ASPEC, Inc., is a Florida Corporation engaged in the business of Mortgage Brokerage in Florida. Shanker S. Agarwal is President of ASPEC, Inc. Mr. Agarwal has been licensed by the Department as a Mortgage Broker since May 24, 1985 and currently holds License No. HB-0016435 which expired, by its terms, August 31, 1986. On February 14, 1986, the Department received a consumer complaint about ASPEC, Inc., and pursuant to its investigation of Respondent's brokerage activities, the Department sent a certified letter to ASPEC, Inc., on March 21, 1986, to the attention of President Agarwal requesting that an appointment be scheduled with its Area Financial Manager, Division of Finance, Paul Richman. The returned service of the referenced letter was postmarked April 14, 1986. President Agarwal, or an officer from Respondent failed to schedule an appointment with Paul Richman as requested. On May 22, 1986, the Department served Respondent a subpoena duces tecum on May 23, 1986, by its then Financial Examiner Analyst I, Kevin J.C. Gonzales. (Petitioner's Exhibit 1, pp 9-10.) The subpoena issued to President Agarwal requested that the custodian of records, an officer, director, employee or member of ASPEC, Inc. appear before Paul Richman on May 30, 1986, at 9:00 a.m. at the Department's Miami Office and produce all books, papers and documents (of ASPEC, Inc.) from its inception to April 29, 1986, so that the Department could determine ASPEC's compliance with Chapter 494, Florida Statutes. President Agarwal, or a representative on behalf of ASPEC, Inc., failed to appear at the date and time specified on the subpoena, or thereafter, at the designated place to produce the requested documents. Respondent has challenged on constitutional and other procedural grounds, the Department's authority to conduct an investigation of Respondent as a licensee under the Mortgage Brokerage Act. Respondent's challenges were determined to be either beyond the authority of the Hearing Officer or lacked merit, and rulings to this effec were made during the course of the hearing.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: Petitioner enter a Final Order suspending the Mortgage Brokers License No. HB-0016435 issued to Respondent for a period of (1) year. RECOMMENDED this 8th day of May 1987, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 8th day of May 1987. COPIES FURNISHED: Miles J. Gopman Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399 Mr. Shanker S. Agarwal, President ASPEC, INC 6912 Stirling Road Hollywood, Florida 33024 Ronald P. Glantz, Esquire 320 Southeast 9th Street Fort Lauderdale, Florida 33316 Hon. Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0305 =================================================================
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. It was incorporated on September 10, 1991. On August 25, 1995, it was administratively dissolved for failure to file its annual report. It has not been reinstated. At present, Petitioner has no assets. Its liabilities exceed $250,000.00 and include a judgment against it in the amount of $11,857.00 (plus interest) and numerous unpaid bills. Before its demise as an active corporation, 3/ Petitioner was a provider of travel services. It was registered as a "seller of travel" with the Agency in 1992 (from January 1 to December 31) and in 1993 (also from January 1 to December 31), during which time it held Seller of Travel Registration Number 14223. As part of the registration process, Petitioner posted with the Agency a $10,000.00 performance bond effective for the one year period commencing November 19, 1991 (the 1991-92 Performance Bond) and another $10,000.00 performance bond effective for the one year period commencing November 19, 1992 (the 1992-93 Performance Bond). 4/ The surety on these two performance bonds (the 1991-92 Performance Bond and the 1992-93 Performance Bond) was the Hartford Fire Insurance Company (the Hartford). Edward Volz, in his capacity as Petitioner's President, signed an indemnity agreement obligating Petitioner to indemnify the Hartford for any payments made by the Hartford "by reason or in consequence of its suretyship." 5/ Consumer claims against Petitioner were received by the Agency. By letter dated February 28, 1994, the Agency advised Petitioner of these "claims on the above referenced security" and of the Agency's intention "to make a demand under its [the security's] terms." By letter to the Hartford dated February 28, 1994, the Agency made "a demand on the surety bond." 6/ The letter read as follows: This is to notify your company that the Department of Agriculture and Consumer Services is in possession of claims made by persons who purchased travel-related services from the above-mentioned seller of travel [Petitioner]. This bond was issued by your company to secure the services of the seller of travel or to provide a refund to those customers who do not receive the services purchased. Please accept this letter as a demand on the surety bond. We would appreciate your advising this office in writing within fifteen (15) days from the date of this letter as to the form and information you require in order to make payment pursuant to the bonded obligation. If you have any questions please contact me at 904-922-2972 or Mr. Wayne Searcy, 904-922-2920. In or around March of 1994, Petitioner filed an application with the Agency to renew its "seller of travel" registration. In conjunction with the filing of its application, Petitioner posted with the Agency a $25,000.00 performance bond effective for the one year period commencing November 19, 1993 (the 1993-94 Performance Bond). The surety on the bond was the Hartford. 7/ By letter dated June 22, 1994, the Agency notified Petitioner that Petitioner's application for renewal of its registration had ben denied for failure "to provide a financial statement prepared by an independent public accountant." After receiving the Agency's June 22, 1994, letter, Petitioner discontinued its business operations. Having received additional claims against Petitioner since it had sent its February 28, 1994, demand letter to the Hartford and not having received any response from the Hartford to that letter, the Agency sent a second letter, dated September 29, 1994, to the Hartford. The letter read as follows: Subject: Excell Travel Club, Inc. 1239 East Newport Ctr., [Number] 113 Deerfield Beach, Florida 33442 Surety Bonds [Number] 41770-77 ($25,000) and [Number] 41770-77 ($10,000) Effective November 19, 1993/ Effective November 19, 1992 Dear Sir: The Department of Agriculture has claims exceeding the amount of the bonds [the 1992- 93 Performance Bond and the 1993-94 Performance Bond] from persons who purchased travel-related services from the above- mentioned seller of travel [Petitioner]. Therefore, the Department of Agriculture is making a demand on the bonds. The bonds were issued by your company to secure the services of the seller of travel or to provide a refund to those customers who do not receive the services purchased. Please accept this letter as a follow up demand on the surety bonds. We would appreciate your advising this office in writing within ten (10) days from the date of this letter as to the form and infor- mation you require in order to make payment to the bonded obligation. If you have any questions please contact me at 904-922-2820. A copy of this letter was sent to Petitioner. The Hartford sent a letter, dated October 18, 1994, to the Agency acknowledging receipt of the Agency's September 29, 1994, letter. Subsequently, the Hartford sent a second letter, dated November 2, 1994, to the Agency. The letter read as follows: RE: Our file: 319 S 26747 and 319 S 26748 Principal: Excell Travel Club, Inc. Dear Mr. Cloud: Enclosed are our checks totalling $35,000.00 which are in settlement of the two surety bonds with effective periods 11/19/92 to 11/19/93 and 11/19/93 to 11/19/94. Please acknowledge receipt of these two checks and acknowledge that our bonds are exonerated. Thank you for your advices concerning these matters. Appearing on both of the two checks that were enclosed with the Hartford's November 2, 1994, letter was the notation, "full and final settlement." Each of the checks also had a "loss date" written on it. The "loss date" written on the $10,000.00 check was November 18, 1993. The "loss date" written on the $25,000.00 check was September 29, 1994. Petitioner had no advance notice that the Hartford was going to make a "settlement" with the Agency. By letter dated May 17, 1995, the Agency advised Petitioner of its intention "to make distribution of the entire bond proceeds to the claimants on a pro rata basis." Thereafter, Petitioner filed a petition requesting an administrative hearing on such proposed action. Petitioner has not repaid any of the $35,000.00 that the Hartford paid the Agency for the benefit of those who filed claims against Petitioner, nor has the Hartford instituted legal proceedings to require Petitioner to indemnify it for having made such payment to the Agency.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Agency enter a final order dismissing, on the ground of lack of standing, Petitioner's petition requesting an administrative hearing on the Agency's proposed action to distribute the proceeds of the 1992-93 and 1993-94 Performance Bonds to claimants on a pro rata basis. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 8th day of October, 1996. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October, 1996.
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint? If so, what disciplinary action should be taken against him?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Department is a state government licensing and regulatory agency. Respondent is now, and has been at all times material to the instant case, a licensed real estate salesperson in the State of Florida. He holds license number 0497295. The license is "involuntary inactive." Respondent has also held a State of Florida mortgage broker's license issued by DBF. The license had an expiration date of August 31, 1991. On or about May 31, 1989, DBF issued an administrative complaint in DBF Proceeding No. 1307-F-1-1/89 alleging that Respondent and others violated various provisions of the Florida's Mortgage Brokers Act. Not having received a request for hearing from Respondent, DBF, on January 11, 1990, prior to the expiration date of Respondent's mortgage broker's license, issued a default order finding Respondent guilty of the violations alleged in the administrative complaint and permanently revoking his license, as well as ordering him to "tender the payment of an administrative fine in the amount of fifteen thousand dollars ($15,000.00) and a payment of three thousand ($3,000.00) for cost of investigation and prosecution." On or about January 23, 1990, Respondent, through counsel, filed a Motion to Set Aside the default order. In the motion, Respondent asserted that he had "failed to request a hearing [on the administrative complaint] simply because he was not aware of same." He further contended in his Motion to Set Aside that the allegations of wrongdoing advanced in the administrative complaint were "totally erroneous." On or about January 26, 1990, before DBF had ruled upon the Motion to Set Aside, Respondent, again through counsel, appealed the default order to the district court of appeal. On or about October 31, 1991, Respondent and DBF entered into a Stipulation and Consent Agreement which provided, in pertinent part, as follows: In the interest of compromise and settlement, the Department and Reynolds agree to resolve the appeal of the Default Final Order on the following terms and conditions: Reynolds agrees to withdraw his appeal of the Default Final Order and his execution of this Stipulation and Consent Agreement shall constitute a withdrawal of the notice of appeal. Reynolds neither admits nor denies the truth of the allegations in the Complaint and Default Final Order. Reynolds agrees not to reapply for a mortgage broker license under the provisions of Chapter 494, Florida Statutes, for a period of three (3) years retroactive to January 11, 1990. Reynolds further agrees to cease and desist from any and all future violations of Chapter 494, Florida Statutes, and the rules promulgated thereunder. This Stipulation and Consent Agreement and accompanying Final Order supersede the "Default Final Order Revoking Mortgage Broker License and Registration" issued by the Department against Reynolds on January 11, 1990. The Department agrees to reduce the administrative fine imposed by the Default Final Order to One Thousand Dollars ($1,000.00). Reynolds agrees to pay an administrative fine of One Thousand Dollars ($1,000.00) by cashier's check or money order payable to "Gerald Lewis, Comptroller, Department of Banking and Finance, Division of Finance," immediately upon execution of the Stipulation and Consent Agreement. This Stipulation and Consent Agreement is being executed solely for the purpose of resolving and settling Reynolds' appeal of the Default Final Order. . . . 8. Reynolds agrees that the accompanying Final Order, which will incorporate this Stipulation shall constitute final agency action by the Department, for which the Department may seek enforcement pursuant to Chapters 120 and 494, Florida Statutes. Reynolds further voluntarily and knowingly waives: (a) any right to an administrative hearing or issuance of a recommended order as provided by Chapter 120, Florida Statutes, and by Chapters 3-7, 28, or 22, Florida Administrative Code; (b) any right to separately stated findings of fact and conclusions of law; (c) any rights to contest in any judicial or administrative forum the validity of any term, condition, obligation, or duty created by this Stipulation or Final Order; and (d) any rights to object to or to challenge in any judicial proceeding, including, but not limited to, an appeal pursuant to Section 120.68, Florida Statutes, any aspect, provision, or requirement of the Stipulation or Final Order, based upon its content, procedure of issuance, or timeliness. . . . Respondent entered into the Stipulation and Consent Agreement and agreed "to pay an administrative fine of One Thousand Dollars ($1,000.00)" and "not to reapply for a mortgage broker license under the provisions of Chapter 494, Florida Statutes, for a period of three (3) years retroactive to January 11, 1990," not because he was guilty of any wrongdoing, but simply as a matter of convenience to avoid, among other things, the expense of litigation. The Final Order incorporating the Stipulation and Consent Agreement was issued by DBF on November 5, 1991. It provided as follows: Petitioner, Department of Banking and Finance, Division of Finance ("Department"), and Respondent, Sherin V. Reynolds ("Reynolds"), having entered into the attached Stipulation and Consent Agreement last dated October 31, 1991, resolving and concluding this matter: IT IS, THEREFORE ORDERED: The Stipulation and Consent Agreement entered into by Reynolds with the Department and attached hereto is incorporated by reference as if set forth herein at length. The Department and Reynolds shall comply with all provisions of the incorporated Stipulation and Consent Agreement. This Final Order supersedes the "Default Final Order Revoking Mortgage Brokerage License and Registration and Imposing Administrative Fines" issued by the Department on January 11, 1990.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby recommended that the Commission enter a final order dismissing the instant Administrative Complaint in its entirety. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 10th day of February, 1994. 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 10th day of February, 1994.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Respondent, Department of Banking and Finance, Division of Finance (Division), is the state agency charged with administering the mortgage brokerage guaranty fund (fund) codified in Sections 494.042 through 494.045, Florida Statutes (1987). Among other things, the Division processes claims for payment from the fund by persons who were parties to a mortgage financing transaction and who have suffered monetary damages as a result of a violation of the law by a licensed mortgage broker. In this case, the perpetrator was Stackhouse Mortgage Corporation (Stackhouse), which held mortgage brokerage license number HB-0006527 from September 19, 1976 through August 31, 1986 and operated at least part of that time in the Brevard County area. In order to perfect a successful claim and be assured of participating in the distribution of moneys from the fund, a person must satisfy a number of statutory criteria within a specified time period after the first notice is filed. This proceeding involves a number of claims by various parties who suffered monetary damages as a result of the illicit acts of Stackhouse. The principal factual issues are whether petitioners, Robert Motes, Machiko Motes, Madge Chesser and Christiane E. Driscoll, all claimants, satisfied the required statutory criteria within the specified time period, and whether the first valid and complete notice of a claim was filed on January 20, 1987 as maintained by the Division, or occurred on a later date as urged by petitioners. These issues are crucial to petitioners' interests since the amount of money to be distributed from the fund for all claimants (on a pro rata basis) is $100,000, and all of that money has been proposed to be distributed to intervenors and other claimants because of the alleged untimeliness of petitioners' claims. The Stackhouse matter first came to the Division's attention on January 20, 1987 when it received by certified mail a letter containing a copy of a complaint filed against Stackhouse by intervenors, Richard S. and Althea M. Rucki, in the circuit court of the eighteenth judicial circuit in and for Brevard County. This filing constituted the first valid and complete notice of the matter. As such, it triggered a two year time period in which other claimants had to file such notice with the Division and then satisfy all statutory criteria in order to share in the first, and in this case the only, distribution of moneys from the fund. Intervenors eventually obtained a summary final judgment against Stackhouse on January 10, 1989 in the amount of $27,200 plus $1,972 in interest, $76 in court costs, and $2,000 in attorney's fees. Copies of the judgment, unsatisfied writ of execution and affidavit of diligent search were filed with the Division on January 19, 1989, or within two years from the date the first notice was filed. After the Rucki notice was filed, a number of claimants, including the other intervenors, filed their notices with the Division within the two year time period and thereafter satisfied all pertinent statutory criteria. Their names, dates of filing their final claims with the Division, and amounts of final judgment, including costs and fees, are listed below in the order in which the claimants filed their first notice with the Division: Claimant Date of Filing Claim Amount of judgment Roberts January 19, 1989 $84,562.30 Rucki January 19, 1989 31,248.00 Gantz January 19, 1989 15,634.28 Carman January 19, 1989 48,767.87 Thomas July 21, 1988 40,103.22 Hahn January 19, 1989 14,165.14 Ulriksson January 18, 1989 14,497.00 Choate January 18, 1989 28,994.00 Anderson December 22, 1988 84,443.20 Resnick December 22, 1988 32,912.22 It is noted that each of the foregoing claimants satisfied all statutory requirements prior to the date of the filing of their respective final claims with the Division. This included the obtaining of a judgment against the debtor, having a writ of execution issued upon the judgment which was later returned unsatisfied, and thereafter having made a reasonable search and inquiry to ascertain whether the judgment debtor possessed any property or other assets to be used in satisfying the judgment. Based upon the judgments obtained by the above claimants, those persons are entitled to distribution from the fund in the following pro rata amounts: Anderson claim - $10,950.00 Resnick claim - 10,950.00 Carman claim - 10,950.00 Thomas claim - 10,950.00 Ulriksson claim - 7,937.83 Choate claim - 10,950.00 Roberts claim - 10,950.00 Gantz claim - 7,697.63 Hahn claim - 7,714.54 Rucki claim - 10,950.00 $100.000.00 On July 27, 1988 petitioners, Robert and Machiko Motes and Madge Chesser, filed their notices with the Division. On August 2, 1988, they were advised by the Division that "the first time period for payment of the Guaranty Fund claims is `two years after the first claim.'" Even so, petitioners did not complete all required statutory steps and file their final claims with the Division until March 1, 1989, or after the two year period had expired. Petitioner, Christiane E. Driscoll, filed her notice, copy of complaint and final judgment on January 23, 1989. Thereafter, she completed all required statutory steps and filed her final claim with the Division on June 6, 1989. As a consequence, none of petitioners are entitled to share in the first distribution of moneys from the fund. An attorney who once represented Driscoll, Rafael A. Burguet, made inquiry by telephone with a Division employee in either late December 1988 or early January 1989 concerning the steps required to process a claim on behalf of his client. It was his recollection that the Division employee did not advise him that the two year period for perfecting claims was triggered in January 1987. On January 20, 1989, Burguet sent a letter to the Division with a copy of the complaint and final judgment against Stackhouse. In the letter, he requested the Division to "please advise as to what further requirements you may have to file this claim." On January 23, 1989 a Division employee acknowledged by letter that the Division had received the complaint and judgment. The letter contained copies of the relevant portions of the Florida Statutes and advice that "claims for recovery against Stackhouse Mortgage Corporation are currently being forwarded to our Legal Department for the drafting of a Notice of Intent to either grant or deny payment from the Fund." There is no evidence that the Division made any positive representations to Burguet that either mislead him or caused him to delay in filing his claim. Similarly, the Division responded on August 2, 1988 to the initial filing of the Motes and Chesser notices with advice that the time period for complying with the statutory criteria was "two years after the first claim." Although there were subsequent telephone conversations (but no written communications) between their attorney and the Division, there was no evidence that the Division made any positive representations that would mislead petitioners or otherwise cause them to delay processing their claims. Petitioners Motes and Chesser contend that the first valid and complete notice was not received by the Division until May 20, 1987 when intervenor Carman filed a complaint against Stackhouse in circuit court and also filed her claim and copy of the complaint with the Division the same date. Under this theory, the two year period would not expire until May 19, 1989. This contention is based on the fact that the Rucki complaint was filed in circuit court on January 9, 1987 but the claim and copy of the complaint were not filed with the Division until January 20, 1987. Petitioners contend that subsection 494.043(1)(e) requires both acts to be accomplished the same date. However, this construction of the statute is contrary to the manner in which it has been construed by the Division. According to the stipulated testimony of an employee of the Brevard County sheriff's office, if the property to be levied on is not listed on the instructions to levy, the sheriff's office requires a court order prior to filing a return nulla bona. In this case seven claimants obtained such a court order directing the sheriff to furnish a return nulla bona as to the writ of execution. However, petitioners Motes and Chesser did not do so until after the two year time period had expired. The records received in evidence reflect that the initial inquiry made by Robert and Virginia R. Enteen was never pursued and therefore their claim should be denied.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent enter a final order distributing the moneys from the mortgage brokerage guaranty fund in a manner consistent with its proposed agency action entered on June 21, 1989. The requests of petitioners to share in the first distribution of moneys from the fund should be DENIED. DONE and ORDERED this 11th day of December, 1989 in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 11th day of December, 1989.
Findings Of Fact Respondent, George G. Walsh, is a licensed real estate broker in the State of Florida, holding license number 0117943. Mr. Walsh is the owner of and the qualifying broker for G. G. Jerry Walsh Real Estate, located in Panama city, Florida. In May 1989, Respondent was the acting broker for Howard Bilford of Miami, Florida. Mr. Bilford owned a five acre parcel of property located in Bay County, Florida. Around May 15, 1989, Tama and Paul Russ, through Mr. Walsh's office, entered into a contract for the purchase of Mr. Bilford's property. The purchase price of the property was $15,000. The Russ' gave Mr. Walsh a $500 binder for deposit in his escrow account. The $500 was placed in Respondent's escrow account. Simultaneous with the signing of the sales contract and deposit receipt agreement, Mr. Walsh also prepared an estimated closing cost statement. On that closing cost statement, Mr. Walsh estimated that a survey of the property would cost the Russ' $450. During this meeting, Mr. Walsh explained to the Russ' that, especially if a financial institution was involved in the financing of the property, there would be certain costs which they would probably have to pay up front. Part of those costs included a survey of the property. At about the same time, the Russ' made application for a loan to a credit union located in Panama City, Florida. At the time of the loan application, the loan officers Mrs. Stokes, prepared a closing cost statement estimating the loan closing costs which the Russ' would encounter. On the credit union's closing cost statement, the cost of a survey was estimated to be $150 to $200. Since it was the credit union that required the survey, the Russ' believed that that estimate was the more accurate. The Russ' simply could not afford a $500 survey. As part of the loan application, an appraisal of the property was required. The appraisal was ordered by the credit union on May 16, 1989, and was completed on May 31, 1989. Unfortunately, the property had been vandalized by unknown persons, and the mobile home which was on the property had suffered severe and substantial damage. The appraisal indicated that the real estate was worth $10,500. With such a low appraisal, the credit union would not lend the amount necessary to purchase the property at the negotiated price. In an effort to renegotiate the property's price, Tama Russ inspected the property and prepared a list of the items which would have to be repaired to make the mobile home liveable. At the same time, the Russ' placed no trespassing signs and pulled logs across the entry to the property. The Russ' also placed padlocks on the doors to the mobile home and removed the accumulated garbage inside the mobile home in an effort to secure the property. They made no other repairs to the property. On June 1, 1990, the Russ' told the loan officer to hold the loan application. At some point during this process, both Mr. Walsh and the Russ' became aware that the survey would cost a considerable amount more than had been expected. By using a favor with Mr. Walsingham of County Wide Surveying, Mr. Walsh obtained a survey price of $500 for the Russ'. In an effort to help the Russ' close on the property, Mr. Walsh contacted Mr. Bilford to see if he would agree to pay the $500 survey cost. Mr. Bilford so agreed, contingent on the closure of the transaction, and sent Mr. Walsh a check made out to County Wide Surveying in the amount of $500. At that point, the Russ' believed that they were no longer obligated to pay for the survey since Mr. Walsh told them that Mr. Bilford was to pay for the survey. On June 3, 1989, Mr. Bilford agreed to a renegotiated price of $10,500.00 on the property. Additionally the Russ' agreed to sign a ten year promissory note for $2,000 bearing 11% interest per annum. Since there were changes in the terms of the contract, the Russ' entered into a net contract with Mr. Bilford on June 3, 1989. The new contract expired on June 30, 1989. Around June 5, 1989, the Russ' learned that their credit had been preliminarily approved. However, such preliminary approval only indicated that the Russ' had sufficient income to proceed with the more costly loan underwriting requirements of the credit union. Such preliminary approval did not indicate that the loan would be finally approved by the financial institution. The preliminary approval was communicated to Mr. Walsh by Tama Russ. Ms. Russ intended the communication to mean that they had been preliminarily approved by the financial institution. Mr. Walsh in an abundance caution contacted Mrs. Stokes, the loan officer. Mrs. Stokes advised him that the Russ' credit had been preliminarily approved. She did not tell him that the loan had been finally approved. Through a misunderstanding of what Mrs. Stokes communicated to him, Mr. Walsh ordered the survey from County Wide Realty on June 7, 1989. There was no reliable evidence presented that the credit union had authorized him to order the survey. The credit union at no time during this process ordered the survey. Mr. Walsh testified that Ms. Russ told him to order the survey. Ms. Russ denies that she gave Mr. Walsh permission to order the survey. At best this evidence goes only to demonstrate Respondent's intent with regards to the actions he undertook in this case and removes this case from a Section 475.25(1)(b), Florida Statutes, violation. At some point Ms. Stokes left the employ of the credit union. On June 16, 1989, as part of her leaving, she unilaterally closed the Russ' loan application file and cancelled the loan application. Neither the Russ' nor Mr. Walsh were notified of the closure or the cancellation. The credit union's file fell into the void created between a change of employees. Because Mr. Walsh was unaware of Ms. Stokes' actions, Mr. Walsh, on July 13, 1989, after the expiration of the Russ' sales contract, contacted the credit union in order to obtain the loan closing package from the institution. The credit union had to hunt for the Russ' file. The credit union president called the Russ' about the loan and he was advised that they did not want the loan. The credit union's president then reviewed the loan file and noted that the Russ' had insufficient income to come up with the amount of the promissory note. He also thought the real estate constituted insufficient collateral for the loan. The loan application was officially denied on July 15, 1989. The Russ' were notified of the credit union's denial credit. The real estate transaction never closed. However, sometime after July 15, 1989, Mr. Walsh received the survey from County Wide. The survey indicates that the field work for the survey was completed on July 17, 1989, and that it was drawn on July 18, 1989. 1/ There was no reliable evidence which indicated any attempt had been made to cancel the survey. Sometime, after July 15, 1989, Tama Russ contacted Mr. Walsh in order to obtain the return of their $500 deposit. After many failed attempts to get the Russ' to voluntarily agree to pay for the cost of the survey, Mr. Walsh, around October, 1989, unilaterally paid the Russ' deposit to County Wide Realty. Mr. Walsh followed this course of action after speaking with some local FREC members who advised him that since FREC was swamped with deposit disputes that nothing would happen as long as he used his best judgment. The payment of the deposit to the surveyor, without prior authorization from the Ruse' violates Section 475.25(1)(d) and (k) Florida Statutes.
Recommendation Based on the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, the pleadings and argument of the parties, it is therefore, RECOMMENDED that the Florida Real Estate Commission enter a Final Order finding Respondent guilty of violating Sections 475.25(1)(d) and 475.25(1)(k), Florida Statutes, issuing a letter of reprimand to Respondent with instructions to immediately replace the Russ' trust deposit and forthwith submit the matter to the commission for an escrow disbursement order and levying a $250 fine. IT IS FURTHER RECOMMENDED that the portions of the Administrative Complaint alleging violation of Section 475.25(1)(b) be dismissed. DONE and ENTERED this 29th day of January, 1991, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of January, 1991.
Findings Of Fact In his application for registration as a mortgage broker (Exhibit 2), David Stain, Petitioner, in response to question 7 "Have you any judgments against you?" answered "No". By letter dated May 12, 1980 (Exhibit 1), Respondent advised Stein that background investigation revealed numerous judgments against him and stated it would he necessary for Stein to advise why he chose to answer question 7 in the negative. After receiving no response from Stein, Respondent, on 2 July 1980, entered a Final Order denying Stein's application for registration as a mortgage broker. Grounds given in this Order were based upon numerous unsatisfied judgments entered against Stein in Pennsylvania. Exhibit 3, a composite exhibit of court records from Allegheny County, Pennsylvania, shows judgements entered against David Stein and in favor of: Pennsylvania Department of Revenue (2), Diner's Club, Ford Motor Credit Company, Charles Arnold, Alan Shaffer, Carl Kronander, and CNA Financial Corporation.
Findings Of Fact Respondent is an applicant to register as a securities salesman with Realty Income Securities, Inc., said application having been submitted to the Division of Securities on February 2, 1975 and is currently pending (Testimony of Dove). During the period of approximately February through - September, 1973, Respondent, a registered mortgage broker, was employed by Financial Resources Corporation of Fort Lauderdale, Florida, in the sale of promissory notes secured ostensibly by first mortgages upon land located in Highlands County, Florida. These notes and security documents were issued by Equitable Development Corporation of Miami Beach, Florida. The notes were payable to "investors" at 14 percent interest per year, payable monthly for several years at which time the full principal balance would become due. The mortgage deeds recited that Equitable Development Corporation held the land which secured the notes in fee simple, free and clear of all encumbrances except real estate taxes. The mortgage deeds further recited that Equitable reserved the right to convey the land to a purchaser under an installment land contract subject to the lien of the mortgage and would deliver to the National Industrial Bank of Miami, an escrow agent, a copy of any such agreement for deed and a quit-claim deed which would be held in escrow. They also provided a procedure by which under any default of Equitable, the escrow agent would deliver the escrow documents to the investor (Testimony of Dove, Petitioner's Composite Exhibit 1). Respondent's association with Financial Resources Corporation came about as a result of a visit by Mr. Robert Rinehart, President of the firm, who explained the mortgage sales program to him and stated that the security instruments were indeed first mortgages. Additionally, Rinehart supplied Respondent with brochures, letters, and documents containing questions and answers concerning the program and the protection afforded thereby to investors. Respondent personally viewed the property in question at Highland Park Estates and observed that over a hundred homes had been constructed which were of a value from $14,000 to $40,000. He also observed that docks had been built on the lake in the project area and that almost all of the roads had been paved. He was shown the MIA appraisal on the property which stated that Rinehart's representations as to property values were accurate. Equitable further represented to him that the notes in question were exempt securities in that they came within the provisions of Section 517.06(7), F.S., concerning the issuance or sale of notes secured by a specific lien upon real property created by mortgage or security agreement. In fact, Respondent became so convinced of the merits of these transactions that he had his mother invest twenty thousand dollars in the program (Testimony of Respondent, Watts; Respondent's Exhibits 1,2). In September 1973, Respondent formed Florida Income Resources Corporation, a mortgage brokerage firm. He did not sell any of the Equitable notes for a period of some months and, prior to commencing sale of them through his firm in the Spring of 1974, his attorney looked over the various aspects of the Equitable program and advised him that everything seemed "open and above board." Respondent thereafter on April 9 and August 1, 1974 sold to William H. Mott secured promissory notes of Equitable Development Corporation in the amounts of $2,000 and $2,250 respectively (Testimony of Respondent, Zawadsky; Petitioner's Composite Exhibit 1). During the period of these sales, letters of Albert George Segal, attorney, were being sent to investors advising them that he had examined the title to the real property purchased and that it was free and clear of encumbrances and constituted valid first mortgages (Respondent's Exhibit 3, Stipulation). Administrative proceedings were brought against Respondent by the Division of Finance involving sales of the notes in question resulting in a settlement by stipulation whereby Respondent did not acknowledge any wrongdoing, but agreed to a suspension of his mortgage broker's registration for two years. Respondent's firm secured no appraisals or title searches on the property involved in the sales to Mott (Testimony of Respondent).
Recommendation That the allegations be dismissed and that Respondent Edgar A Dove be registered as a securities salesman if he otherwise meets the qualifications set forth in Section 517.12, Florida Statutes and Chapter 3E-30, Florida Administrative Code. DONE and ENTERED this 15th day of March, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Fred O. Drake, III Assistant General Counsel Office of the Comptroller The Capitol Tallahassee, Florida 32304 H. Gordon Brown, P.A. 301 W. Camino Gardens Boulevard Suite B P.O. Box 1079 Boca Raton, Florida 33432
