SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This is a contested case brought by Petitioner Tony McElveen challenging the decision of the South Carolina Department of Consumer Affairs ("Department") which denied Petitioner's Application for a Mortgage Broker License based on Petitioner's brokering without a license. A hearing was held before me on February 7, 2006 at the offices of the Administrative Law Court ("ALC" or "Court") in Columbia, South Carolina.

FINDINGS OF FACT

Having observed the witness and exhibits presented at the hearing and closely passed upon their credibility, the court makes the following Findings of Fact by a preponderance of the evidence.

1. Notice of the time, date, place and subject matter of the hearing was given to Petitioner and Respondent.

2. Petitioner’s mortgage broker license for Palmetto Mortgage Company expired on September 30, 2006. Petitioner failed to renew his license. The Department notified petitioner on November 6, 2006 that his license had expired, Palmetto Mortgage Company could not broker any loans until they applied for and received a new license. In December 2006, the Department received a routine verification from a lender for the license of Palmetto Mortgage Company that included a copy of Palmetto Mortgage Company’s license that had been counterfeited. The Department notified Palmetto Mortgage Company on January 10, 2007 that it had learned that Palmetto Mortgage Company was brokering without a license and their license application was denied.

3. Testimony of petitioner indicated that Palmetto Mortgage Company had been brokering without a license since their license had expired September 30, 2006.

CONCLUSIONS OF LAW

Based on the forgoing Findings of Fact, the court concludes the following as a matter of law.

1. Jurisdiction over this case is vested with the South Carolina Administrative Law Court pursuant to S.C. Code Ann. § 40-58-55 (Supp. 2006), S.C. Code Ann. § 40-58-80 (Supp. 2006), S. C. Code Ann. §§ 1-23-600, et seq. (Supp. 2006) and S.C. Code Ann. § 1-23-380 (Supp. 2006).

2. Under the South Carolina Licensing Requirements Act of Certain Brokers of Mortgages on Residential Real Property, a mortgage broker or an originator may not engage in the business of processing, placing, or negotiating a mortgage or offering to process, place, or negotiate a mortgage in this State without first being licensed with the administrator. See S.C. Code Ann. §§ 40-58-30(A).

3. S.C. Code Ann. § 40-58-55 (2005) sets forth:

(A) The department may refuse [*4] to license an applicant or refuse to renew a license if it finds, after notice and a hearing pursuant to the Administrative Procedures Act, that the applicant or his agent 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;

(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.

4. Petitioner failed to renew the license for his company, Palmetto Mortgage Company, and continued to engage in mortgage broker activity in violation of S.C. Code Ann. 40-58-30(A). Subsequently, petitioner applied for a license and was denied by the Department based on the foregoing violation pursuant to S.C. Code Ann. 40-58-55. Additionally, Palmetto Mortgage Company counterfeited a license and submitted it via fax to a lender. The lender submitted the license to the Department for verification. The Department confirmed that the official license had expired and the license submitted for verification was not valid.

ORDER

Based on the Findings of Fact and Conclusions of Law stated above, it is ORDERED that:

IT IS HEREBY ORDERED that the Department's decision in the above-referenced case is AFFIRMED.

IT IS FURTHER ORDERED that Petitioner Tony McElveen and Palmetto Mortgage Company, their agents and assigns, SHALL PROVIDE the Department, within 30 days of the date of this Order, with copies of all contracts, files and documents related to mortgages that were originated on residential real estate located in South Carolina after September 30, 2006, at or through their office at 2284 West Evans Street Suite B, Florence, South Carolina 29501 or at or through other locations.

IT IS FURTHER ORDERED that Petitioner Tony McElveen and Palmetto Mortgage Company, their agents and assigns, SHALL REFUND all fees and premiums charged to consumers for all mortgages that were originated on residential real estate located in South Carolina after September 30, 2006, at or through their office at 2284 West Evans Street Suite B, Florence, South Carolina 29501 or at or through other locations.

IT IS FURTHER ORDERED that the Petitioner Tony McElveen and Palmetto Mortgage Company, their agents and assigns, SHALL BE ASSESSED an administrative fine of five hundred ($500.00) dollars for each violation of the Act.

AND IT IS SO ORDERED.

_________________________________

John D. McLeod

Administrative Law Judge

October 1, 2007

Columbia, South Carolina