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15-1005-14145-2 |
STATE OF MINNESOTA
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE DEPARTMENT OF COMMERCE
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FINDINGS OF FACT, CONCLUSIONS AND RECOMMENDATION |
The above-entitled matter came on before Administrative Law Judge Beverly Jones Heydinger (“ALJ”) on April 12, 2001 for a prehearing conference. The prehearing conference was held pursuant to a Notice of and Order for Hearing, Notice of Prehearing Conference and Statement of Charges, dated February 28, 2001.
Jennifer S. Kenney, Assistant Attorney General, 1200 NCL Tower, 445 Minnesota Street, St. Paul, MN 55101-2130, appeared on behalf of the Minnesota Department of Commerce (“Department”). The Respondents, Great Lakes Funding, Inc. and Louis D. Colson, Jr., did not appear in person or by counsel. The record closed upon the Respondents’ default on April 12, 2001.
This Report is a recommendation, not a final decision. The Commissioner of Commerce will make the final decision after reviewing the record and may adopt, reject or modify these Findings of Fact, Conclusions, and Recommendations. Under Minn. Stat. § 14.61, the Commissioner’s decision shall not be made until this Report has been available to the parties to the proceeding for at least ten (10) days. An opportunity must be afforded to each party adversely affected by this Report to file exceptions and present argument to the Commissioner. Parties should contact James C. Bernstein, Commissioner, Minnesota Department of Commerce, 85 Seventh Place E., Suite 500, St. Paul, MN 55101, telephone (651) 296-6025 to ascertain the procedure for filing exceptions or presenting argument to the Commissioner.
STATEMENT OF ISSUE
1. Did Respondent Great Lakes Funding, Inc. surrender its mortgage originator license without adequate plans for withdrawal from regulated business and timetable for disposition of the business?
2. Did Respondents fail to fund a residential mortgage for which it had a contractual obligation?
3. Did the Respondents demonstrate untrustworthiness, financial irresponsiblity, or incompetence by failing to satisfy a judgment obtained by Burnet Title in Hennepin County District Court for approximately $83,000.00?
4. Did the Respondents fail to perform in conformance with their written agreements with borrowers, investors, other licensees, or exempt persons by failing to return approximately $600,000 in funds or provide acceptable security instruments to Provident Bank?
5. Did the Respondents engage in an act or practice that demonstrates untrustworthiness, financial irresponsibility, or incompetence by failing to return approximately $600,000 in funds or provide acceptable security instruments to Provident Bank?
6. Did the Respondents fail to notify the Department of a corporate officer’s resignation and change of address?
7. Did Respondents fail to respond to requests from the Department for information on April 7, and April 27, 2000?
8. Did the Respondents fail to appear before the Department, as ordered?
Based upon all of the files, records and proceedings herein, the Administrative Law Judge makes the following:
FINDINGS OF FACT
1. On March 5, 2001, a copy of the Notice of and Order for Hearing, Notice of Prehearing Conference, and Statement of Charges was delivered via first class and certified mail to Great Lakes Funding, Inc., 6750 France Avenue south, suite 126, Edina, MN 55435 and Louis D. Colson, Jr., 3227 Lakeshore Boulevard, Minnetonka, MN 55391, as appears from an Affidavit of Mailing on file herein. The United States Post Office returned both the certified and first class mail notices mailed to Great Lakes Funding, Inc. Neither notice mailed to Louis D. Colson, Jr. was returned, nor did the Department receive notice that the certified mail was claimed or delivered.
2. The Respondents did not appear at the prehearing conference, did not obtain the ALJ’s prior approval to be absent from the prehearing conference, did not file a Notice of Appearance, and did not request a continuance or any other relief.
3. The Notice of and Order for Hearing, Notice of Prehearing Conference, and Statement of Charges contained the following informational warning:
If Respondents fail to attend or otherwise appear at any prehearing conference, settlement conference, or the hearing in this matter, or fail to comply with any interlocutory order of the judge after having been served with a copy of this Order, Respondents shall be deemed in default and the allegations or issues set forth herein may be deemed proved, and Respondent Great Lakes Funding, Inc.’s mortgage originator license may be retroactively revoked, Respondent Louis D. Colson, Jr. may be barred from engaging in residential mortgage origination or servicing, Respondents may be censured, and/or a civil penalty may be imposed against Respondents without further proceedings.
4. Because Respondents failed to appear, they are in default.
5. Pursuant to Minnesota Rules, part 1400.6000, the allegations contained in the Notice of and Order for Hearing, Notice of Prehearing Conference, and Statement of Charges are taken as true and incorporated by reference into these Findings of Fact.
Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:
CONCLUSIONS
1. The Administrative Law Judge and the Commissioner of Commerce are authorized to consider the charges against Respondent under Minn. Stat. §§ 326.91, 45.027, subd. 1, 45.024, and 14.50 (2000).
2. Respondents received due, proper and timely notice of the charges against them, and of the time and place of the prehearing conference. This matter is, therefore, properly before the Commissioner and the Administrative Law Judge.
3. The Department has complied with all relevant substantive and procedural legal requirements.
4. Under Minn. R. 1400.6000, a contested case may be decided adversely to a party who defaults. On default, the allegations of and the issues set out in that Notice of and Order for Hearing or other pleading may be taken as true or deemed proved without further evidence.
5. The Respondents are in default herein as a result of their failure, without the ALJ’s prior consent, to appear at the prehearing conference.
6. By surrendering its mortgage originator license without adequate plans for withdrawal from regulated business and timetable for disposition, Respondent Great Lakes Funding, Inc. violated Minn. Stat. § 58.11, subd. 4 (2000).
7. By failing to fund a residential mortgage for which it had a contractual obligation and failing to disburse funds according to their contractual obligation, Respondent violated Minn. Stat. § 58.13, subd. 1(4)(2000).
8. By failing to satisfy a judgment obtained by Burnet Title in Hennepin County District Court for approximately $83,000.00, Respondents demonstrated untrustworthiness, financial irresponsiblity, or incompetence and violated Minn. Stat. §58.12, subd. 1(b)(2)(v)(2000).
9. By failing to return approximately $600,000 in funds or provide acceptable security instruments to Provident Bank, Respondents did not perform in conformance with their written agreements with borrowers, investors, other licensees, or exempt persons, and violated Minn. Stat. § 58.13, subd. 1(5)(2000).
10. By failing to return approximately $600,000 in funds to Provident Bank, Respondents engaged in an act or practice that demonstrates untrustworthiness, financial irresponsibility, or incompetence and violated Minn. Stat. § 58.12, subd. 1(b)(2)(v)(2000).
11. By failing to notify the Department of a corporate officer’s resignation and change of address, the Respondents violated Minn. Stat. §§ 45.0112 and 58.12, subd. 1(b)(2)(iii)(2000).
12. By failing to respond to the Department’s requests for information and the Department’s orders to appear, the Respondents violated Minn. Stat. § 45.027, subd. 1a (2000).
13. Disciplinary action against the Respondent is in the public interest.
Based upon the foregoing Conclusions, the Administrative Law Judge makes the following:
IT IS HEREBY RECOMMENDED: that the Commissioner of the Minnesota Department of Commerce take adverse action against Respondents’ licenses, censure Respondents, and/or impose a civil penalty upon Respondents.
Dated this 17th day of April, 2001
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S/Beverly Jones Heydinger |
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BEVERLY JONES HEYDINGER |
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Administrative Law Judge |
Reported: Default (no tapes)
Under 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 or as otherwise provided by law.