SC Administrative Law Court Decisions

STATEMENT OF THE CASE

The above-captioned matter comes before this court pursuant to S.C. Code Ann. § 40-58-55(A) (Supp. 2007) for a contested case hearing. Petitioner Anthony Lamaris Shands seeks review of the decision of Respondent South Carolina Department of Consumer Affairs to deny his application for a mortgage loan originator’s license. The Department denied Petitioner’s application because he had been convicted of crimes involving breach of trust within the past ten years. After timely notice to the parties, a hearing of this case was held on June 25, 2008, at the South Carolina Administrative Law Court in Columbia, South Carolina. The Department noted at the outset that it is charged with protecting the public and thus routinely denies applications where a prior criminal record shows convictions involving fraud. However, the Department stated it would not oppose Mr. Shands’ application if he made a sufficient showing that these convictions would not be a concern regarding his professional integrity. Based upon the evidence presented at the hearing, I find that Petitioner’s application for a mortgage loan originator’s license should be granted.

FINDINGS OF FACT

Having carefully considered all testimony, exhibits, and arguments presented at the hearing of this matter, and taking into account the credibility and accuracy of the evidence, I make the following Findings of Fact by a preponderance of the evidence:

1. On or about November 6, 2007, Petitioner Anthony Lamaris Shands submitted an application for a mortgage loan originator’s license to the Department. Among other things, the application contained the following question regarding Petitioner’s criminal history:

Have you ever been convicted of a felony or of an offense involving breach of trust, moral turpitude or dishonest dealings within the past ten years? (Include all offenses other than minor traffic violations.) Provide details about the offense, including conviction date, court, penalty and attach a certified copy of the Criminal Docket Sheet and the Presentence Investigation Report.

Resp. Ex. 1 at 2. In response to this question, Petitioner checked the box marked “YES” and attached additional sheets to the application, in which he explained the circumstances surrounding his prior convictions.

2. Petitioner pled guilty to breach of trust with fraudulent intent over $1000 and breach of trust over $1000 resulting from a single incident where he reported his manager for stealing from Wal-Mart but he represented that the charges were turned on him for letting someone leave the store with merchandise. At the close of the case, the Department averred that Mr. Shands had provided a satisfactory explanation and that the two convictions based on this incident were no longer a concern. Moreover, those convictions will be over ten years old this November. Traffic offenses are not of concern to the Department, nor are convictions more than ten years old.

3. The main incident of concern was a forgery charge on March 29, 2001. At the hearing, Mr. Shands explained the circumstances surrounding that incident. His mother was shot in the head by her live-in boyfriend on October 31, 1999; as a result of the trauma, his mother was paralyzed on her left side. Mr. Shands was the primary caregiver for his mother until her death in 2006. Mr. Shands had her power of attorney and wrote a check for the mortgage for the land on which she lived but he owned. (Mr. Shands owned both the property where she lived and the one where he lived next door at the time.) The check was written on a joint account his mother shared with her assailant, who later pressed charges against Mr. Shands for forgery. He served a probationary sentence, and the solicitor recommended a pardon even though he considered Mr. Shands to be technically guilty of forgery, as noted in the letter attached to Mr. Shands’ application. At the close of the hearing, the Department averred on the record in open court that Mr. Shands had made a very strong showing why this conviction should not preclude his application and that it was satisfied with his explanation regarding the forged check.

4. Petitioner was honest and candid with the Department and this court and takes full responsibility for his past and has worked diligently to improve his life. Since becoming his mother’s caretaker and later coping with her death, he has worked hard to turn his life around, to provide a good example as a divorced parent for his fourteen-year-old daughter who lives with him, to become a morally upstanding member of his community, and to be a regular presence at his daughter’s school, in which she excels. He became involved in church through attendance with his mother. However, based upon his convictions, which, under the law, are defined as crimes involving fraud, the Department initially denied Petitioner’s application for a mortgage loan originator’s license.

5. In short, there is nothing in the record to suggest that Petitioner does not have the financial responsibility, experience, character, and fitness necessary to operate as a mortgage loan originator in an honest, fair, and efficient manner in compliance with state law. Moreover, the Department no longer opposes Petitioner’s application based upon the explanations for the convictions he provided at the hearing.

CONCLUSIONS OF LAW

Based upon the foregoing Findings of Fact, I conclude the following as a matter of law:

1. This court has jurisdiction over this contested case proceeding pursuant to S.C. Code Ann. § 37-6-414 (Supp. 2007), S.C. Code Ann. § 40-58-55(A) (Supp. 2007), and S.C. Code Ann. § 1-23-600(B) (Supp. 2007).

2. In presiding over this contested case, this 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. 2007); 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).

3. In order 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 of 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. 2007). Further, before issuing a license to a mortgage loan originator, the licensing authority 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 belief that the business may be operated honestly, fairly, and efficiently according to the purposes of [Chapter 58 of Title 40, which pertains to the licensing of mortgage loan brokers].” S.C. Code Ann. § 40-58-60(A) (Supp. 2007). In determining whether an applicant has the requisite character and fitness to be licensed as a mortgage loan originator, the licensing authority may consider such factors as whether the applicant has “(1) violated a provision of this chapter or an order of the [D]epartment; (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.” See S.C. Code Ann. § 40-58-55(A) (Supp. 2007).

4. In the case at hand, Petitioner has been convicted of crimes involving fraud within the past ten years. Nevertheless, when those failings are balanced against the mitigating circumstances surrounding his criminal offenses and the older offense being almost ten years old, I find that Petitioner does possess the financial responsibility, experience, character, and general fitness necessary to secure licensure as a mortgage loan originator.

ORDER

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

IT IS HEREBY ORDERED that the Department shall GRANT Petitioner’s application for licensure as a mortgage loan originator.

AND IT IS SO ORDERED.

______________________________

June 26, 2008 JOHN D. GEATHERS

Columbia, South Carolina Administrative Law Judge

1205 Pendleton Street, Suite 224

Columbia, South Carolina 29201-3731