The Banking Commissioner (“Commissioner”) is charged with the administration of Part I of Chapter 668, Sections 36a-485 to 36a-534c, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators”.

Pursuant to the authority granted by Section 36a-17 of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondents to determine if they have violated, are violating or are about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner.

Section 36a-17(a) of the Connecticut General Statutes provides, in pertinent part, that:

Section 36a-51 of the 2010 Supplement to General Statutes provides, in pertinent part, that:

Section 36a-52 of the Connecticut General Statutes provides, in pertinent part, that:

Section 36a-50(a) of the Connecticut General Statutes provides, in pertinent part, that:

Section 4-182 of the Connecticut General Statutes provides, in pertinent part, that:

1.	Action Mortgage is a Rhode Island corporation with its main office at 1120 Park Avenue, Cranston, Rhode Island.
2.	On November 24, 2009, Action Mortgage requested renewal of its Connecticut mortgage broker license on the Nationwide Mortgage Licensing System.
3.	Russo is an individual whose address last known to the Commissioner is 3 Wagon Trail, Johnston, Rhode Island.
4.	At all times relevant hereto, Russo was Vice President and a direct owner of Action Mortgage.
5.	On June 14, 2010, Russo was licensed as a mortgage loan originator with Action Mortgage.
6.	On June 15, 2010, a Criminal Complaint was filed in the United States District Court for the District of Connecticut (Case No. 3:10-mj-00097-EBB), charging that Russo, among others, conspired to defraud the United States in connection with mortgages insured by the Federal Housing Administration (“FHA”), in violation of 18 U.S.C. 371, and conspired to commit wire fraud in violation of 18 U.S.C. 1349 (“Criminal Complaint”).
7.	On June 22, 2010, a Superseding Indictment was filed in the United States District Court for the District of Connecticut, in which the Grand Jury charged that beginning in at least February 2007 through May 2010, Russo, among others, conspired to defraud the United States by impairing, impeding, obstructing and defeating, through deceitful and dishonest means, the governmental functions of the Department of Housing and Urban Development and the FHA in connection with mortgage loan insurance issued by the FHA in violation of 18 U.S.C. 371; committed wire fraud in violation of 18 U.S.C. 1343; and knowingly and willfully made and caused to be made materially false, fictitious and fraudulent statements and representations involving FHA-insured mortgage loans in violation of 18 U.S.C. 1001.
8.	On June 21, 2010, the State of Rhode Island and Providence Plantations, Department of Business Regulation, issued an Emergency Order In the Matter Of Action Mortgage suspending its loan broker license in Rhode Island based upon the filing of the Criminal Complaint (“Action Mortgage Order”).
9.	On June 21, 2010, the State of Rhode Island and Providence Plantations, Department of Business Regulation issued an Emergency Order In the Matter of:  Nathan M. Russo suspending his mortgage loan originator license in Rhode Island based upon the filing of the Criminal Complaint (“Russo Order”).
10.	To date, neither Action Mortgage nor Russo has informed the Commissioner of the Criminal Complaint, Indictment, Action Mortgage Order or Russo Order.

Section 36a-485(4) of the 2010 Supplement to the General Statutes provides that:

Section 36a-489(a) of the 2010 Supplement to the General Statutes provides, in pertinent part, that:

Section 36a-489(b)(1)  of the 2010 Supplement to the General Statutes provides, in pertinent part, that:

Section 36a-490(c) of the 2010 Supplement to the General Statutes provides, in pertinent part, that:

Section 36a-490(d) of the 2010 Supplement to the General Statutes provides, in pertinent part, that:

Section 36a-490(e) of the 2010 Supplement to the General Statutes, as amended by Public Act 10-32, provides, in pertinent part, that:

Section 36a-494 of the 2010 Supplement to the General Statutes provides, in pertinent part, that:

1.	The filing of the Criminal Complaint and Indictment against Russo, as more fully described in paragraphs 6 and 7 of the Matters Asserted, constitutes a basis for the Commissioner to conclude that a control person of Action Mortgage fails to demonstrate that the financial responsibility, character and general fitness of such control person are such as to command the confidence of the community and to warrant a determination that Action Mortgage will operate honestly, fairly and efficiently within the purposes of Sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b of the Connecticut General Statutes.  Such failure constitutes grounds for the Commissioner to deny an application for a mortgage broker license under Section 36a-489(a)(1)(C) of the 2010 Supplement to the General Statutes, which would be sufficient grounds for the Commissioner to revoke and refuse to renew Action Mortgage’s license to act as a mortgage broker in Connecticut pursuant to Section 36a-494(a)(1) and subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes.  Such failure also causes Action Mortgage to fail to meet minimum standards for renewal under Section 36a-489(a)(2)(A) of the 2010 Supplement to the General Statutes, which shall cause such license to expire.
2.	The filing of the Criminal Complaint and Indictment against Russo, as more fully described in paragraphs 6 and 7 of the Matters Asserted, constitutes a basis for the Commissioner to conclude that Russo fails to demonstrate that the financial responsibility, character and general fitness of Russo are such as to command the confidence of the community and to warrant a determination that Russo will operate honestly, fairly and efficiently within the purposes of Sections 36a-485 to 36a-498f, inclusive, and 36a-534a and 36a-534b of the Connecticut General Statutes.  Such failure constitutes grounds for the Commissioner to deny Russo’s application for a mortgage loan originator license pursuant to Sections 36a-489(a)(1) and 36a-489(a)(1)(C) of the 2010 Supplement to the General Statutes, which constitutes sufficient grounds for the Commissioner to revoke Russo’s mortgage loan originator license in Connecticut pursuant to Section 36a-494(a)(2) and subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes.
3.	The issuance of the Action Mortgage Order and Russo Order, as more fully described in paragraphs 8 and 9 of the Matters Asserted, constitutes a basis for the Commissioner to conclude that Action Mortgage fails to demonstrate that the financial responsibility, character and general fitness of Action Mortgage are such as to command the confidence of the community and to warrant a determination that Action Mortgage will operate honestly, fairly and efficiently within the purposes of Sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b of the Connecticut General Statutes.  Such failure constitutes sufficient grounds for the Commissioner to deny an application for a mortgage broker license under Section 36a-489(a)(1)(C) of the 2010 Supplement to the General Statutes, which would be sufficient grounds for the Commissioner to revoke and refuse to renew Action Mortgage’s license to act as a mortgage broker in Connecticut pursuant to Section 36a-494(a)(1) and subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes.  Such failure also causes Action Mortgage to fail to meet minimum standards for renewal under Section 36a-489(a)(2)(A) of the 2010 Supplement to the General Statutes, which shall cause such license to expire.
4.	Action Mortgage’s failure to inform the Commissioner of the Criminal Complaint, Indictment, Action Mortgage Order and Russo Order, as more fully described in paragraph 10 of the Matters Asserted, constitutes a violation of Sections 36a-490(c)(2) and 36a-490(c)(3) of the 2010 Supplement to the General Statutes.  Such violation constitutes sufficient grounds for the Commissioner to revoke and refuse to renew Action Mortgage’s license to act as a mortgage broker in Connecticut pursuant to Sections 36a-494(a)(1) and 36a-494(a)(1)(C) and subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes, and forms the basis to issue an order to cease and desist pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Action Mortgage in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a civil penalty upon Action Mortgage not to exceed Ten Thousand Dollars ($10,000), subject to Action Mortgage’s right to a hearing on the allegations set forth above.
5.	Russo’s failure to inform the Commissioner of the Criminal Complaint, Indictment and Russo Order, as more fully described in paragraph 10 of the Matters Asserted, constitutes a violation of Section 36a-490(d)(2) of the 2010 Supplement to the General Statutes.  Such violation constitutes sufficient grounds for the Commissioner to revoke Russo’s mortgage loan originator license in Connecticut pursuant to Section 36a-494(a)(2) and subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes, and forms the basis to issue an order to cease and desist pursuant to Sections 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Russo in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a civil penalty upon Russo not to exceed Fifteen Thousand Dollars ($15,000), subject to Russo’s right to a hearing on the allegations set forth above.

The Commissioner finds that public welfare requires immediate action to issue a temporary order requiring Action Mortgage to cease and desist from violating Sections 36a-490(c)(2) and 36a-490(c)(3) of the 2010 Supplement to the General Statutes, pursuant to Section 36a-52(b) of the Connecticut General Statutes, in that Action Mortgage’s failure to inform the Commissioner of the Criminal Complaint, Indictment, Action Mortgage Order and Russo Order fails to demonstrate that its business is being operated soundly and efficiently, in the public interest and consistent with the purposes of Sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b of the Connecticut General Statutes, and therefore adversely effects the public.

The Commissioner finds that public safety and welfare imperatively require emergency action to summarily suspend Russo’s license to act as a mortgage loan originator in Connecticut pursuant to Section 4-182(c) of the Connecticut General Statutes in that due to the issuance of the Criminal Complaint, Indictment and Russo Order, the underlying basis for such Criminal Complaint, Indictment and Russo Order and Russo’s failure to inform the Commissioner of same, fails to demonstrate that the financial responsibility, character and general fitness of Russo are such as to command the confidence of the community and to determine that Russo will operate honestly, fairly and efficiently within the purposes of Sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b of the Connecticut General Statutes, and therefore adversely effects the public.

WHEREAS, the Commissioner has reason to believe that Action Mortgage has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke and refuse to renew Action Mortgage’s license to act as a mortgage broker in Connecticut pursuant to Sections 36a-494(a)(1) and 36a-494(a)(1)(C) and subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes, and forms a basis to issue an order to cease and desist against Action Mortgage pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty upon Action Mortgage pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes;

WHEREAS, the Commissioner has reason to believe that Russo has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke Russo’s mortgage loan originator license in Connecticut pursuant to Section 36a-494(a)(2) and subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes, and forms a basis to issue an order to cease and desist against Russo pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty upon Russo pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes;

AND WHEREAS, the Commissioner has made the findings required under Sections 36a-52(b) and 4-182(c) of the Connecticut General Statutes.

THE COMMISSIONER THEREFORE ORDERS, pursuant to the authority granted in Section 4-182(c) of the Connecticut General Statutes, that the license of Nathan M. Russo to act as a mortgage loan originator in Connecticut be and is hereby SUMMARILY SUSPENDED pending proceedings for revocation.

THE COMMISSIONER FURTHER ORDERS, pursuant to the authority granted in Section 36a-52(b) of the Connecticut General Statutes, that Action Mortgage Corp. immediately CEASE AND DESIST from further violations of Sections 36a-490(c)(2) and 36a-490(c)(3) of the 2010 Supplement to the General Statutes.  This Temporary Order shall become effective upon receipt by Action Mortgage and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the Matters Asserted in this Temporary Order.

THE COMMISSIONER FURTHER ORDERS, pursuant to the authority granted in Section 36a-52(b) of the Connecticut General Statutes, that:

1.	Upon the effective date of this Temporary Order, Action Mortgage, and any and all officers, members, managers, qualified individuals or branch managers with supervisory authority at any office of Action Mortgage, employees, independent contractors or agents operating on behalf of Action Mortgage and their successors or assigns, shall immediately cease and desist from accepting applications and soliciting or advertising for its broker business in Connecticut or to Connecticut consumers.
2.	Action Mortgage submit to Alan J. Cicchetti, Deputy Commissioner, by e-mail at alan.cicchetti@ct.gov, within the time frames specified below, a detailed record, prepared as of the date of submission, of all of Action Mortgage’s pending residential mortgage loan applications on property located in Connecticut. (a) As soon as possible, but not later than five (5) days after the effective date of this Temporary Order, all information on file as of the date of submission regarding Action Mortgage’s pipeline of pending mortgage loan applications.  Such information shall include, but not limited to, the following: (i) the names of all individuals from whom Action Mortgage has accepted an application for a residential mortgage loan and the loan number; (ii) the applicants’ addresses and telephone numbers; (iii) the amount of all prepaid loan fees submitted by each applicant; (iv) rate lock status; (v) the amount of each loan; (vi) application status (i.e., filed, submitted to lenders, cleared to close, etc.); (vii) loan terms, if approved; (viii) scheduled closing dates; the loan purpose (i.e., purchase or refinance); and (ix) identification of the applicable lender with whom each application will be placed; and (b) On each Friday, by 5 p.m. Eastern Standard Time after the effective date of this Temporary Order, an updated, written status report of the mortgage loan applications identified above under paragraph 2(a).  The status report shall include the categories of information required under paragraph 2(a), and shall indicate the final disposition of each loan application and include the final terms under which each approved loan is closed.  The reporting requirement shall continue until each of the approved applications is funded by Action Mortgage, placed with another mortgage broker or mortgage lender or withdrawn by the applicant(s).
3.	Action Mortgage shall immediately place any fees previously collected from Connecticut consumers relative to any pending mortgage loan applications in a separate escrow account maintained at a federally-insured bank located in Connecticut.  Not later than five (5) days after the effective date of this Temporary Order, Action Mortgage shall provide the Commissioner with proof that the fees have been placed in an escrow account maintained at a federally-insured bank.  Such proof shall be submitted to Alan J. Cicchetti, Deputy Commissioner, by e-mail at alan.cicchetti@ct.gov.
4.	Action Mortgage shall immediately place with one or more qualified lender(s) or broker(s) as appropriate, based on the status of the application and with no loss to applicants, the following:  (a) Connecticut residential mortgage loans which were closed by Action Mortgage; and (b) Action Mortgage’s entire pending application list of Connecticut residential mortgage loans.  “No loss to the applicant” shall mean that any loan that may have been closed by Action Mortgage and remains unfunded, as well as any pending application which has been approved by Action Mortgage but has not yet closed, shall be placed with a lender willing to fund or close the mortgage loan under the same terms and conditions extended by Action Mortgage.  In the event that no such placement can be made, Action Mortgage shall either independently fund the mortgage loan under the same terms and conditions extended by Action Mortgage, or buy down the mortgage loan offered by the lender so that the applicant does not incur a loss as a result of such placement.  Action Mortgage shall obtain the prior approval of the Commissioner before placing such applications with the qualified lender(s) or broker(s).
5.	Action Mortgage shall immediately secure all pending Connecticut mortgage loan application files and, to the extent that any original documents are forwarded to the relevant lender or broker, a copy of such document, correspondence or paper relating to the mortgage loan shall be retained in Action Mortgage’s books and records, and shall be available in their entirety to the Division, immediately upon request on the date and time specified by the Division.  Action Mortgage shall provide the Division with the name and telephone numbers of the keeper of the records.  Such information shall be submitted to Alan J. Cicchetti, Deputy Commissioner, by e-mail at alan.cicchetti@ct.gov.
6.	Action Mortgage shall not pay or declare any dividend, salary or bonus, nor otherwise authorize any other material distribution of Action Mortgage’s assets to any officer, director or owner of Action Mortgage without the prior written approval of the Commissioner.  Upon the effective date of this Order, Action Mortgage shall implement or revise its practices and procedures, as necessary, to ensure that Action Mortgage’s financial books and records are accurately maintained, in a manner illustrating compliance with the provisions of this paragraph, and available for review by the Division’s examiners upon request.
7.	Upon the effective date of this Order, Action Mortgage shall provide to the Commissioner contact information for an employee of Action Mortgage that Division employees may contact with questions as well as contact information for an employee of Action Mortgage that consumers and mortgage brokers may contact with questions.  Such contact information shall be submitted to Alan J. Cicchetti, Deputy Commissioner, by e-mail at alan.cicchetti@ct.gov.
8.	Nothing in this Order shall prevent Action Mortgage from selling or assigning a residential mortgage loan to another entity, servicing closed mortgage loans or engaging in other activity not prohibited by Sections 36a-485 to 36a-498c, inclusive, 36a-534a and 36a-534b of the Connecticut General Statutes or this Temporary Order.
9.	Action Mortgage submit to Alan J. Cicchetti, Deputy Commissioner, by e-mail at alan.cicchetti@ct.gov on or before August 17, 2010, a written confirmation that Action Mortgage has informed all its mortgage loan originators of this Temporary Order.

FURTHER, notice is hereby given to Action Mortgage that the Commissioner intends to REVOKE and REFUSE TO RENEW Action Mortgage’s license to act as a mortgage broker in Connecticut, issue an order requiring Action Mortgage to CEASE AND DESIST from violating Sections 36a-490(c)(2) and 36a-490(c)(3) of the 2010 Supplement to the General Statutes, and impose a CIVIL PENALTY upon Action Mortgage as set forth herein, subject to Action Mortgage’s right to a hearing on the allegations set forth above.

FURTHER, notice is hereby given to Russo that the Commissioner intends to REVOKE Russo’s mortgage loan originator license in Connecticut, issue an order requiring Russo to CEASE AND DESIST from violating Section 36a-490(d)(2) of the 2010 Supplement to the General Statutes, and impose a CIVIL PENALTY upon Russo as set forth herein, subject to Russo’s right to a hearing on the allegations set forth above.

A hearing will be granted to Respondents if a written request for a hearing is received by the Department of Banking, Consumer Credit Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following each Respondent’s receipt of this Order of Summary Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke and Refuse to Renew Mortgage Broker License, Notice of Intent to Revoke Mortgage Loan Originator License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in Section 36a-51 of the 2010 Supplement to the General Statutes and Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes.  This Order of Summary Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke and Refuse to Renew Mortgage Broker License, Notice of Intent to Revoke Mortgage Loan Originator License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing shall be deemed received on the earlier of the date of actual receipt, or seven days after mailing or sending.  The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address.  If any Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”.  Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a presiding officer and sets the date of the hearing in accordance with Section 4-177 of the Connecticut General Statutes and Section 36a-1-21 of the Regulations of Connecticut State Agencies.  If a hearing is requested, the hearing will be held on September 28, 2010, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.

The hearing will be held in accordance with the provisions of Chapter 54 of the Connecticut General Statutes, unless Respondents fail to appear at the requested hearing.  At such hearing, Respondents will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.

If Action Mortgage does not request a hearing within the time prescribed, the Commissioner will issue an order revoking and refusing to renew Action Mortgage’s license to act as a mortgage broker in Connecticut, which order shall cause Action Mortgage’s mortgage broker license in Connecticut to be deemed EXPIRED, and issue an order that Action Mortgage cease and desist from violating Sections 36a-490(c)(2) and 36a-490(c)(3) of the 2010 Supplement to the General Statutes, and may order a civil penalty not to exceed Ten Thousand Dollars ($10,000) be imposed upon Action Mortgage.

If Russo does not request a hearing within the time prescribed, the Commissioner will issue an order revoking Russo’s mortgage loan originator license in Connecticut and issue an order that Russo cease and desist from violating Section 36a-490(d)(2) of the 2010 Supplement to the General Statutes, and may order a civil penalty not to exceed Fifteen Thousand Dollars ($15,000) be imposed upon Russo.

So ordered at Hartford, Connecticut
this 3rd day of August 2010.              ________/s/_________
                                                    Howard F. Pitkin
                                                    Banking Commissioner

I hereby certify that on this 3rd day of August 2010, the foregoing Order of Summary Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke and Refuse to Renew Mortgage Broker License, Notice of Intent to Revoke Mortgage Loan Originator License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing was sent by registered mail, return receipt requested to Action Mortgage Corp. Attention:  William A. Plante, President, 1120 Park Avenue, Cranston, Rhode Island 02910, registered mail no. RB028037252US; and Nathan M. Russo, 3 Wagon Trail, Johnston, Rhode Island 02919, registered mail no. RB028037266US.

                                                   ________/s/_________

                                                   Doniel Kitt
                                                   Prosecuting Attorney

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