SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter is before the Administrative Law Court (ALC) upon a petition dated July

11, 2008 from the South Carolina Department of Consumer Affairs (Department) for an order

from this Court enjoining Residential Mortgage Solutions, Inc., and Guillermo Hernandez,

individually (Respondents) from employing, compensating or appointing as its agent, unlicensed

originators as defined in S.C. Code Ann. § 40-58-20(14), a violation of S.C. Code Ann.§§ 40-58-

10(B) and 40-58-30(A) and 40-58-30(B). This Court issued an Order Directing Entry of Default

and Directing Answer to be filed by Respondent Hernandez dated September 24, 2008, and

ordering that Respondent file an Answer to the Petition on or before October 23, 2008.

Additionally, the Court’s Order to Answer Petition for Injunctive Relief stated that a failure to

file an answer will be deemed to be a default and the matter will be disposed of adversely of the

Respondents interest. Respondent failed to file an Answer. This Court issued an Order for

Entry of Default to be filed by Respondents dated November 3, 2008. After carefully weighing

the evidence, the court finds that the Respondent should be permanently enjoined from further

violations of the Act and other relief sought by Petitioner as stated below.

FINDINGS OF FACT

The Department sent a letter to Respondent date May 20, 2008, subject “Employing

Unlicensed Originators,” to determine if Respondents was in compliance with the Act in regards

to the employment of Timothy Wilson. The Department identified the above violation and

requested that Respondent furnish the Department with the broker fee agreements and settlement

statements for all loans originated by unlicensed originators. The Respondent has not, as of this

date, responded to the Department’s letter. The Department filed a petition with this court based

on the above violations, requesting that the court issue an order:

(1) Requiring Respondents, their agents or assigns to cease and desist from

employing, compensating, or appointing as its agents unlicensed originator’s in violation of the

Act.

(2) Requiring Respondents, their agents or assigns to provide copies of all contracts,

files and documents related to mortgages that were originated by unlicensed originators on

residential real estate located in South Carolina at or through their office at 2611 Forest Drive,

Suite 117, Columbia, South Carolina 29204 location.

(3) Requiring Respondents, their agents or assigns to refund all monies collected

under any contracts entered into or mortgages originated by unlicensed originators with

consumers on residential real property located at their 2611 Forest Drive, Suite 116, Columbia,

South Carolina 29204 location or at or through other locations. This includes any monies paid

by the lender for these contracts or mortgages to respondent.

(4) Assessing Respondents an administrative fine of five hundred ($500.00) dollars

for each violation of the Act, pursuant to S.C. Code Ann. § 40-58-80 (C).

(5) Restraining the Respondents from violating the Act.

(6) That this Order take effect immediately; and

(7) Granting such other relief as may be necessary; just and appropriate.

CONCLUSIONS OF LAW

Jurisdiction over this case is vested with the South Carolina Administrative Law Court

pursuant to S.C. Code Ann. 40-58-80 (Supp. 2007) and S.C. Code Ann. § 1-23-600 (E) (Supp.

2007). 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. Additionally, a

mortgage broker cannot employ, compensate or appoint as its agent, an unlicensed originator

unless they are licensed. See S.C. Code Ann. §§ 40-58-30 (A) and 40-58-30 (B).

After carefully weighing the evidence and applying the law as discussed above, the court

finds that the Department’s petition should be granted without exception. The Department has

presented uncontested evidence that the Respondents have violated the provisions of the

Licensing Requirements Act of Certain Brokers of Mortgage on Residential Real Property by

employing, compensating or appointing as its agent an unlicensed originator that has

offered to process, place or negotiate a mortgage.

ORDER

Based on the Finding of Fact and Conclusions of Law stated above, it is hereby

ORDERED that the Respondents SHALL CEASE AND DESIST from employing, compensating and appointing as its agents unlicensed originators in violation of the Act.

IT IS FURTHERMORE ORDERED that the Respondents 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 by unlicensed originators on residential real estate located in South Carolina, at or through their office at 2611 Forest Drive, Suite 117, Columbia, South Carolina 29204, or through other locations.

IT IS FURTHERMORE ORDERED that the Respondents shall be assessed an administrative fine of five hundred ($500.00) dollars for each violation of the Act.

AND IT IS SO ORDERED.

__________________________________________

Ralph King Anderson, III

Administrative Law Judge

January 5, 2008

Columbia, South Carolina

December 5, 2008

Honorable Ralph King Anderson

Administrative Law Court Judge

South Carolina Administrative Law Court

1205 Pendleton Street, Suite 224

Columbia, SC 29201

RE: SCDCA vs. Residential Mortgage Solutions, Inc.,

and Guillermo Hernandez, Individually

Docket No. 08-ALJ-30-0326-IJ

Dear Judge Anderson:

I have enclosed with this letter the proposed Order in the above referenced case.

Sincerely,

Charles M. Knight

Staff Attorney

CMK/bfc

Enclosures: as stated

cc: Mr. Guillermo Hernandez

Residential Mortgage Solutions, Inc.

2611 Forest Drive, Suite 117

Columbia, SC 29204