ALJDEC decisions subject to certification as final

09F-BD021-BNK · Arizona Department of Financial Institutions · 2008-10-28

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 28, 2008 APPEARANCES: Assistant Attorney general Liane Kido appeared for the Arizona Department of Financial Institutions; Respondent failed to appear. ADMINISTRATIVE LAW JUDGE: Michael G. Wales _____________________________________________________________________ FINDINGS OF FACT 1. Justin Rich, dba 1st Solutions Mortgage, (“Respondent”) is authorized to transact business in Arizona as a mortgage broker, license number MB 0908980. 2. On January 23, 2008, the Arizona Department of Financial Institutions (“Department”) was notified by Old Republic Insurance Company that Respondent’s bond number 1246777 in the amount of $10,000.00 would be canceled effective February 28, 2008. 3. On February 5, 2008, the Department sent Respondent a letter via certified mail, return receipt requested, to its address of record on file with the Department, 12910 W. Charter Oak Rd. in El Mirage, Arizona 85335, informing it that the Department had received notification of the cancellation of the above-mentioned bond. The Department also informed Respondent of the statutory obligation of a mortgage broker licensee to maintain a bond and the need to replace the canceled bond or its mortgage broker license would be revoked. 4. On or about February 23, 2008, the Department received the envelope containing the Certified Letter back from the U.S. Post Office. The envelope contained markings that indicated that that Respondent had been notified by the U.S. Post Office of the Certified Letter on February 13, and again on February 18, 2008, but Respondent failed to pickup the certified letter. 5. On April 23, 2008, Department staff received a call from Mr. Rich wherein he acknowledged that his bond had been canceled and indicating he would provide the Department with a new bond. 6. Richard Fergus (“Mr. Fergus”) is in charge of supervising the Financial Services Division of the Department, and has done so for the past three years. Mr. Fergus testified that to-date the Department has not received any updated bond information from Respondent to replace the canceled bond. 7. On September 22, 2008, the Superintendent of the Department issued an Order of Summary Suspension and Notice of Hearing to Revoke (“Order and Notice”) immediately suspending Respondent’s mortgage broker’s license based on Respondent’s failure to maintain the required surety bond. The Order and Notice was sent to Respondent by certified mail, return receipt requested. The envelope containing the Order and Notice was returned to the Department by the U.S. Postal Service as unclaimed. 8. The Department also attempted personal service on Respondent on September 25, 2008 at Respondent’s address on record, but personal service was not obtained and the address on record with the Department appeared vacant. Assistant Attorney General Liane Kido avowed to this tribunal that one day prior to the instant hearing she received a call from Mr. Rich. During that call, Mr. Rich acknowledged that he was aware of the hearing date, place and time. 9. The commencement of the instant hearing was delayed 15 minutes to allow for the late arrival of an authorized representative or attorney for Respondent. Respondent failed to appear individually or by proper authorized or legal representative. Likewise, Respondent did not contact the Office of Administrative Hearings to request a delay or continuance of the matter and did not file any request to appear by telephone. Therefore, after the 15 delay, the Administrative Law Judge conducted the hearing in the Respondent’s absence. 10. At hearing, Mr. Fergus testified that Respondent failed to update the Department regarding the cancellation of its surety bond. The Department initiated this disciplinary action to revoke the mortgage broker’s license of Respondent.

CONCLUSIONS OF LAW 1. The Superintendent of the Department is vested with the authority to regulate persons engaged in the mortgage broker business and has the duty to enforce statutes and rules relating to mortgage brokers. See A.R.S. § 6-901 et seq. 2. The Department bears the burden to prove by a preponderance of the evidence that Respondent has violated State laws pertaining to mortgage brokers. See A.A.C. R2-19-119. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 3. Credible evidence established that Respondent failed to maintain a surety bond in the amount of $10,000.00 as required by A.R.S. §§ 6-903(G) and (H) or provide for an alternative as provided in A.R.S. § 6- 903(J). 4. By failing to maintain the required surety bond, Respondent failed to conduct its mortgage broker business in accordance with the law and violated the provisions of Title 6, Chapter 9 and rules relating thereto, in which constitute grounds for revocation of the license pursuant to A.R.S. § 6-905. 5. Pursuant to A.R.S. § 41-1092.11, the Superintendent has the authority to suspend Respondent’s mortgage broker’s license if emergency action is required to protect the health, safety and welfare of the public. 6. Based on the above, grounds existed for the issuance of the Order of Summary Suspension of Respondent’s mortgage broker’s license. 7. Based on the above, grounds exist for the revocation of Respondent’s mortgage broker’s license pursuant to A.R.S. §§ 6-905. . . . . . . ORDER Respondent’s mortgage broker’s license summary suspension is upheld and on the effective date of the Ordered entered in this matter, the license is to be revoked.

Done this day, October 28, 2008.

Office of Administrative Hearings

__________________________ Michael G. Wales Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

Arizona Department of Financial Institutions Felecia A. Rotellini, Director ATTN: Susan Longo 2910 N. 44th Street, Suite 310 Phoenix, AZ 85018

By ___________________________ -----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826