9-1005-13132-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE DEPARTMENT OF COMMERCE

 

In the Matter of the Mortgage Originator License of Island Mortgage Network, d/b/a Reliance Mortgage, d/b/a AppOnline.Com, License No. 20188284,

Department of Commerce File No. MO2005273/CMF

 

FINDINGS OF FACT,

CONCLUSIONS OF LAW

AND RECOMMENDATION

 

The above-entitled matter came on for hearing before Administrative Law Judge Phyllis A. Reha on September 28, 2000 at 3:00 p.m. at the Office of Administrative Hearings, 100 Washington Square, Suite 1700, 100 Washington Avenue South, Minneapolis, Minnesota 55401.

            Jennifer S. Kenney, Assistant Attorney General, 1200 NCL Tower, 445 Minnesota Street, St. Paul, Minnesota 55101-2130, appeared on behalf of the Department of Commerce.  There was no appearance by or on behalf of the Respondent, Island Mortgage Network, d/b/a Reliance Mortgage, d/b/a AppOnline.Com, 201 Old County Road, Melville, NY  11747.

NOTICE

            This Report is a recommendation, not a final decision.  The Commissioner of the Minnesota Department of Commerce will make the final decision after a review of the record. The Commissioner may adopt, reject or modify the Findings of Fact, Conclusions, and Recommendations. Pursuant to Minn. Stat. § 14.61, the final decision of the Commissioner shall not be made until this Report has been made available to the parties to the proceeding for at least ten days and an opportunity has been afforded to each party adversely affected to file exceptions and present argument to the Commissioner.  Parties should contact the Commissioner of Commerce, 133 East Seventh Street, St. Paul, Minnesota 55101, telephone (651) 297-3238 for information on filing exceptions and presenting argument.

STATEMENT OF ISSUE

The issue in this contested case proceeding is whether the Commissioner of Commerce should take adverse action against the Residential Mortgage Originator License of the Respondent.

 

Based upon all of the files, records and proceedings herein, the Administrative Law Judge makes the following:

            FINDINGS OF FACT

1.         Island Mortgage Network, d/b/a Reliance Mortgage, d/b/a AppOnline.Com (“Respondent”) was initially licensed as a residential mortgage originator in the State of Minnesota on July 26, 1999.  (Ex. A, pg. 1)

2.         On July 3, 200, the Department received notice from the New York State Banking Department that it had issued an Order for Suspension, Statement of Charges, and Notice of Hearing against Respondent. (Ex. A, pg.1)

3.         The Statement of Charges alleged six counts, including that Respondent had stopped payment on checks issued at closings to sellers or mortgagees of property, and that Respondent had failed to respond to the New York State Banking Department's requests for information. (Ex. .A, pg. 2)

4.         The Department's attempts to contact Respondent by telephone have been unsuccessful. (Ex. A, pg. 2).

5.         On July 20, 2000, the New York State Banking Department informed an investigator for the Department that Respondent had filed a bankruptcy petition in U.S. Bankruptcy Court, Eastern Division of New York on July 19, 2000.  The Department confirmed that Respondent filed a bankruptcy petition on July 19, 2000, case number 0084687-478. (Ex. A, pg. 2)

6.         The Notice of and Order for Hearing in this matter was served upon the Respondent by first class and certified mail (Certified Mail No. 17536) on August 16, 2000, at 201 Old County Road, Melville, NY 11747. This was the Respondent’s last known address on file with the Department of Commerce.  The Certified mail envelope was returned to the Office of the Attorney General as undeliverable.  (Ex. C).

7.         The Notice of and Order for Hearing mailed to the Respondent included the following notice in boldface type on page 5:

If Respondent fails to attend or otherwise appear at any prehearing conference, settlement conference, or hearing in this matter, or fails to comply with any interlocutory order of the judge after having been served with a copy of this Order, Respondent shall be deemed in default and the allegations or issues set forth herein may be deemed proved, and Respondent’s real estate broker's (sic) license may be revoked or suspended, Respondent may be censured and/or a civil penalty may be imposed against Respondent without further proceedings.   (Ex. A, pg. 5). 

8.         The Respondent did not appear at the hearing scheduled for September 28, 2000, or have an appearance made on its behalf.  Respondent did not request a continuance or any other relief prior to the hearing. 

9.         Because Respondent failed to appear at the September 28, 2000 hearing in this matter, it is in default.  Pursuant to Minn. Stat. § 58,12, subd. 2 (1998) and Minn. R. 1400.6000 (1997), the allegations contained in the Notice of and Order for Hearing are hereby taken as true and incorporated into these Findings of Fact.

            Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

 

CONCLUSIONS

1.         The Commissioner of Commerce and the Administrative Law Judge have jurisdiction in this matter pursuant to Minn. Stat. §§ 14.50, 45.027, subds. 6, 7 (Supp.1999) and 11 (1998), and 58.12, subds. 1,2 and 3 (1998).

2.         The Department gave proper notice of the hearing in this matter and fulfilled all relevant substantive and procedural requirements of law or rule.

            3.         The Respondent, having made no appearance at the September 28, 2000 prehearing conference, and not requesting a continuance or other relief, is in default.  Pursuant to Minn. Stat. § 58.12, subd. 2 and Minn. R. 1400.6000, the allegations contained in the Notice of and Order for Hearing are hereby taken as true.

4.         Respondent has been the subject of an order of suspension or revocation, cease and desist order or injunction order or order barring involvement in an industry or profession issued by this or any other state or federal regulatory agency in violation of Minn. Stat. § 58.12, subd.1(b)(2)(vii) (1998).

5.         Respondent has failed to maintain compliance with the affirmations made under section 58.06, subdivision 2, by failing to maintain adequate staffing levels, becoming financially insolvent, and failing to notify the commissioner immediately of any bankruptcy petition filed against or by it, in violation of Minn. Stat. § 58.12, subd.1(b)(2)(iii) (1998).

6.         The conduct described in Conclusions 4 and 5 and in the Notice of and Order for Hearing, Notice of Prehearing Conference, and Statement of Charges constitutes violations of Minn. Stat. § 58.12, subd. 1(b)(2) (iii) and (vii) (1998). 

7.         As a result of Conclusion 6 above, the Commissioner may take disciplinary action against Respondent’s residential Mortgage Originator License pursuant to Minn. Stat. § 45.027, subds. 6 and 7 (Supp. 1999) and 11 (1998) and Minn. Stat. § 58.12, subd. 1-3 (1998).

            Based upon the foregoing Conclusions, the Administrative Law Judge makes the following:

RECOMMENDATION

IT IS HEREBY RESPECTFULLY RECOMMENDED that appropriate disciplinary action be taken against the Residential Mortgage Originator License No. 20188284 of Island Mortgage Network, d/b/a Reliance Mortgage, d/b/a AppOnline.Com.

 

Dated this 10th day of October, 2000.

 

                                                                             

PHYLLIS A. REHA

Administrative Law Judge

 

NOTICE

            Pursuant to Minn. Stat. § 14.62, subd. 1, the Agency is required to serve its final decision upon each party and the Administrative Law Judge by first-class mail.

Reported:  Default.