SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter is before the Administrative Law Court (“ALC”) for a final order and decision following a contested case hearing pursuant to S.C. Code Ann. § 40-58-55(A) (Supp. 2006). Petitioner Chavonda R. Gallman (“Gallman”) challenges the decision of Respondent South Carolina Department of Consumer Affairs (“Department”) denying her application for a mortgage loan originator’s license pursuant to § 40-58-55 (Supp. 2006). The Department denied Gallman’s application because Gallman has had three criminal convictions involving offenses of moral turpitude within the past ten years. After notice to the parties, the court held a hearing on this matter on April 11, 2007. After carefully weighing all of the evidence, the court finds that Gallman’s application for a mortgage loan originator’s license should be denied.

ISSUE

Does Gallman possess the requisite financial responsibility, character, and general fitness to command the confidence of the community and to warrant the belief that her business will be operated honestly, fairly, and efficiently such that she should be granted a mortgage originator’s license?

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, and taking into consideration the burden of persuasion by the parties, the court makes the following Findings of Fact by a preponderance of the evidence.

In January 2007, Chavonda Gallman applied for a license to work as a mortgage originator at Atlantic Mortgage Associates in Mauldin, South Carolina. The Department denied Gallman’s mortgage originator’s license because Gallman’s criminal record revealed two convictions for writing a fraudulent check in 1997^[1] and one conviction for writing a fraudulent check in 2001. Gallman failed to disclose these convictions on her application to the Department. Her explanation was that she was unaware of the convictions and is now trying to remedy them. Since the Department initially denied Gallman’s application, she has applied to have one of the convictions expunged. If the expungement is successful, Gallman testified that she will apply to receive a pardon for the remaining convictions.

In support of her application Gallman testified that she enjoys helping people and is active in the community. Since 2001, Gallman has acquired two businesses and is qualified as a minister at her church. Gallman testified that she has made some mistakes, but if the court grants her license she will follow the laws and be a good citizen.

LAW

Based upon the foregoing Findings of Fact, the court concludes the following as a matter of law.

1. Jurisdiction

Jurisdiction over this case is vested with the South Carolina Administrative Law Court pursuant to S.C. Code Ann. § 37-6-414 (Supp. 2006), S.C. Code Ann. § 40-58-55(A) (Supp. 2006), and S.C. Code Ann. § 1-23-600(B) (Supp. 2006). The weight and credibility assigned to evidence presented at the hearing of a matter is within the province of the trier of fact. See S.C. Cable Television Ass’n v. S. Bell Tel. & Tel. Co., 308 S.C. 216, 222, 417 S.E.2d 586, 589 (1992). Furthermore, a trial judge who observes a witness is in the best position to judge the witness’s demeanor and veracity and to evaluate the credibility of his testimony. See, e.g., Woodall v. Woodall, 322 S.C. 7, 10, 471 S.E.2d 154, 157 (1996); Wallace v. Milliken & Co., 300 S.C. 553, 556, 389 S.E.2d 448, 450 (Ct. App. 1990).

In presiding over this contested case, the court serves as the finder of fact and makes a de novo determination regarding the licensing matters at issue. See S.C. Code Ann. § 1-23-600(B) (Supp. 2006); Marlboro Park Hosp. v. S.C. Dep’t of Health & Envtl. Control, 358 S.C. 573, 577-79, 595 S.E.2d 851, 853-54 (Ct. App. 2004); Brown v. S.C. Dep’t of Health & Envtl. Control, 348 S.C. 507, 512, 560 S.E.2d 410, 413 (2002).

2. Mortgage Loan Originator Requirements

To be licensed as a mortgage loan originator, an applicant must be at least eighteen years of age and must have at least six months’ experience in residential mortgage lending or complete eight hours of continuing education within ninety days of employment. S.C. Code Ann. § 40-58-50(D) (Supp. 2006). Further, before issuing a license to a mortgage loan originator, the Department must find that the applicant’s “financial responsibility, experience, character, and general fitness . . . are such as to command the confidence of the community and to warrant the belief that the business may be operated honestly, fairly, and efficiently according to the purposes of this chapter . . . .” S.C. Code Ann. § 40-58-60(A) (Supp. 2006). If these requirements have not been met, the Department is required to refuse the license. Id. (“If the department does not so find, it shall refuse to license the applicant . . . .”) (emphasis added).

In determining whether an applicant has the requisite character and fitness to be licensed as a mortgage loan originator, the court may consider factors such as whether the applicant has “(1) violated a provision of this chapter or an order of the department; (2) withheld material information in connection with an application for a license or its renewal, or made a material misstatement in connection with the application; [or] (3) been convicted of a felony or of an offense involving breach of trust, moral turpitude, fraud, or dishonest dealing within the past ten years.” S.C. Code Ann. § 40-58-55(A) (Supp. 2006). Whether an applicant has demonstrated the requisite financial responsibility, experience, character, and fitness is within the discretion of the court. See S.C. Code Ann. § 1-23-600(B) (Supp. 2006); Marlboro Park Hosp., 358 S.C. at 577-79, 595 S.E.2d at 853-54; Brown, 348 S.C. at 512, 560 S.E.2d at 413; see also S.C. Code Ann. § 40-58-60(A) (Supp. 2006).

3. Conclusions

After carefully weighing the evidence and applying the law as discussed above, the court finds that Gallman’s application for a mortgage originator’s license should be denied.

Gallman has presented insufficient evidence to the court to overcome her criminal convictions and prove to the court by a preponderance of the evidence that she has the character and fitness required by the statute. Within the last ten years Gallman has been convicted of multiple fraudulent check charges, which are crimes of moral turpitude, see State v. Harrison, 298 S.C. 333, 380 S.E.2d 818 (1989), as well as indications of financial irresponsibility. The repeated nature of Gallman’s offenses further leads the court to conclude that Gallman’s request for a mortgage originator’s license should be denied.^[2]

ORDER

Based upon the Findings of Fact and Conclusions of Law stated above, it is

ORDERED that the Department shall deny Petitioner’s application for a mortgage loan originator’s license in accordance with §§ 40-58-50 et seq. (Supp. 2006).

IT IS SO ORDERED.

______________________________

PAIGE J. GOSSETT

Administrative Law Judge

April 27, 2007

Columbia, South Carolina