Letter of Complaint to Bank Re Loan Officer - PDF by ill21369


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                                    IN A MATTER
                         BEFORE THE COMMISSIONER OF BANKS
                               DOCKET NO. 04:014:MBB

 IN RE:                                        )
 LICENSE OF JEFFREY M. CORBETT,                )
 LICENSE NUMBER: I-103826                      )

       THIS MATTER came on for hearing before the Commissioner of Banks (hereinafter the
“Commissioner”), on January 22, 2004, pursuant to N.C. Gen. Stat. § 150B-38(b) and 4 NCAC
3B .0200, et seq., upon Notice of Intent to Revoke the loan officer license of Jeffrey M. Corbett
served on December 20, 2003.

       Appearing at the hearing for the Office of the Commissioner of Banks ("OCOB") was
Anne J. Brown, Assistant Attorney General, Raleigh, North Carolina. Jeffrey M. Corbett
("Corbett" or "Respondent") was represented at the hearing by J. Patrick Haywood ("Haywood"),
Attorney, Greensboro, North Carolina. George C. King, Director of the Mortgage Division at
OCOB, was a witness for OCOB. Respondent testified on his own behalf.

      Based upon the exhibits admitted into evidence, the testimony of witnesses, and
arguments of the parties and counsel, the Commissioner makes the following Findings of Fact
and Conclusions of Law:

                                   I. FINDINGS OF FACT

1.     On or about September 25, 2002, Jeffrey M. Corbett signed under oath and afterwards
       filed with the Office of the Commissioner of Banks (“OCOB”) an Application (the
       “Application”) for licensure as a loan officer pursuant to N.C. Gen. Stat. § 53-243.05 and
       the grandfather provisions of Section 5 of Senate Bill 904, Session Law 2001-393.

2.     Based on the information contained in the Application, OCOB staff issued Respondent a
       license as a loan officer, License I-103826, on or about October 15, 2002. Upon further
       review, OCOB staff issued a preliminary determination that the license should be

3.     The Notice of Intent to Revoke, dated December 18, 2003, stated that Respondent's
       license should be revoked for the following reasons:

       A.      Respondent has outstanding Judgments or liens not reported, in violation of N.C.
               Gen. Stat. § 53-243.12(a)(2)g.
            1)      Judgment in the amount of $2,177 in favor of Hearth Technologies filed
                    May 5, 2003, BK 371 PG 311 Wake County

            2)      Judgment dated October 14, 2002, in the amount of $1,981 in favor of
                    Chandler Concrete, recorded in BK 429 PG 152 Guilford County

            3)      Judgment dated April 2, 2003, in the amount of $7,597 in favor of
                    Insulating, Inc., recorded in BK 432 PG 241 Guilford County

            4)      Judgment dated June 11, 2003, in the amount of $1,562 in favor of
                    MacCord Mason LLC, recorded in BK 434 PG 84 Guilford County

     B.     Respondent has unsatisfactory credit in that Respondent's credit score is below the
            minimum satisfactory credit level of 550, together with a number of past due,
            collection, and charge off accounts, all of which demonstrate a lack of financial

     C.     Respondent has outstanding complaints regarding use of letters containing
            misrepresentations to borrowers from other companies who have closed loans.
            The letter alleges that there is an “interest rate discrepancy” and urges the
            borrower to call someone at Empire Mortgage.

4.   The state entered into evidence the following exhibits:

            Exhibit 1:     The original Grandfathered Mortgage Lender/Broker Application
                           Respondent filed in September 25, 2002

            Exhibit 2:     The mortgage broker license renewal application, filed in June 10,

            Exhibit 3:     The Notice of Intent to Revoke the Respondent's license, mailed on
                           December 18, 2003

            Exhibit 4:     A copy of Respondent's credit report

            Exhibit 5:     Solicitation letter from Empire; list of Empire loan officers; and
                           copies of complaints against Empire

5.   At the hearing, Respondent stated that he was unaware of the judgments against him. He
     said the judgments were from creditors for Ducor Development, Ltd. ("Ducor"), his
     general contractor company that closed in 2002. Respondent stated that he had hired
     Carruthers & Roth, P.A., to handle his finances at the time and believed that they had
     taken care of the claims of all his creditors. Respondent stated that he had about 15 to 20
     creditors of which he was aware and those were satisfied.
6.   Respondent states that he has now satisfied the judgment for Hearth Technologies, Inc.
     ("Today's Fireplace") and Chandler Concrete Co. Inc. ("Chandler Concrete").
     Respondent also stated that he did not receive any mailings regarding the McCord Mason
     LLC judgment due to a change in address; therefore, he was not aware of that judgment.
     Respondent testified that he had attempted to satisfy the judgment the day before the
     hearing, but the attorneys were not in the office.

7.   Respondent's credit rating was below the minimum established by the Commissioner as
     acceptable on a credit report in violation of N.C. Gen. Stat. § 53-243.12(a)(2)g.
     Respondent had a score of 517 whereas the minimum acceptable credit score is ordinarily

8.   The complaints sent to OCOB staff, in general, reflect that Respondent mailed letters to
     the complainants' clients, and claimed that his company, Empire Mortgage, Ltd.
     ("Empire"), is a representative of their company. The letters from Empire tells the client
     that there is an "interest-rate discrepancy" on loans they previously closed with these
     companies and asks the letter recipients to call Empire. Respondent has responded to
     OCOB on each complaint to try to explain his actions and to correct the problems and
     entered into evidence the following exhibits:

            Exhibit 1:     Letter from OCOB staff to Respondent requesting a response in
                           regards to a complaint from CTX Mortgage Company; CTX's
                           letter of complaint against Empire addressed to OCOB;
                           Respondent's response to OCOB

            Exhibit 2:     A settlement agreement between Ducor and Chandler Concrete

            Exhibit 3:     Not offered nor admitted into evidence

            Exhibit 4:     A check remitted by Jeffrey Corbett to Today's Fireplace

            Exhibit 5:     Not offered nor admitted into evidence

            Exhibit 6:     Letter of complaint from SterlingSouth Bank & Trust Company's
                           counsel, Charles T. Hagan, III, addressed to David Held of Empire;
                           Corbett's response to the complaint; Hagan's response to Corbett

9.   As agreed upon during the hearing, Haywood on behalf of Respondent later submitted
     supplemental evidence to OCOB on February 19, 2004, regarding the Respondent's
     outstanding judgments. Judgments have been satisfied for Chandler Concrete and
     Today's Fireplace, but Haywood is still attempting to resolve the judgment with
     Insulating, Inc. Haywood submitted the following labeled exhibits with his February 19,
     2004 letter:

            Exhibit A:     Letter from Haywood to Today's Fireplace, dated May 17, 2002
            Exhibit B:     Letter from Haywood to Insulating, Inc., dated May 17, 2002

            Exhibit C:     Letter from Haywood to Chandler Concrete, dated November 27,
                           2002; Carruthers & Roth, P.A.'s invoice for Chandler Concrete

            Exhibit D:     Settlement agreement with Chandler Concrete

            Exhibit E:     Letter from Corbett to Chandler Concrete, dated January 8, 2004,
                           regarding the satisfaction of judgment

            Exhibit F:     Letter from counsel for Today's Fireplace to Haywood, dated
                           September 10, 2002, regarding a balance due

            Exhibit G:     Letter from counsel for Today's Fireplace to Haywood, dated
                           January 12, 2004, regarding a payment of $1,250 toward the
                           $3,287.70 balance; copy of $1,250 check from Corbett to Today's

            Exhibit H:     Letter from Insulating, Inc. to Haywood regarding Corbett's
                           balance of $7,597, dated June 4, 2002

     Corbett's counsel submitted additional written evidence regarding the handling of Ducor's
     indebtedness and legal issues.

                             II. CONCLUSIONS OF LAW

1.   The Commissioner has jurisdiction over the parties and the subject matter of the hearing
     any defects in notice are deemed waived by Respondent’s appearance without objection.

2.   Inasmuch as Respondent has previously been issued a license by the Office of the
     Commissioner of Banks, the burden of proof is upon the state to show that Respondent's
     license should be revoked. Based on the evidence entered into the record, a prima facie
     case for revocation was made.

3.   Respondent knew or should have known about his outstanding judgments, which
     appeared on his credit report, and about his complaints, and he should have addressed
     these matters in his Application.

4.   The Mortgage Lending Act (“MLA”) requires truthfulness and accuracy in filing
     documents with the Office of the Commissioner of Banks. The documents filed by
     Respondent with the Office of the Commissioner of Banks for licensure as a loan officer
     were inaccurate and untruthful.
5.   Those who participate in the mortgage industry are obligated to take the time and care to
     ensure that applications and loan-related documents are truthful and accurate in every
     respect. This obligation applies to documents relating to a loan as well as for documents
     relating to a loan officer’s licensure.

6.   The Mortgage Lending Act contemplates that the Commissioner and his staff will
     consider a licensee's financial responsibility as it may reflect upon the licensee's
     “character and general fitness” under N.C. Gen. Stat. § 53-243.05. Therefore, if in that
     review and consideration, OCOB finds outstanding tax liens, outstanding judgments, or
     deficient credit score they may weigh as aggravating factors against licensure. The
     Commissioner is required to make an affirmative finding under the statute that a licensee
     is entitled to licensure.

7.   Based on the Respondent's efforts to promptly address complaints and to resolve as soon
     as possible the outstanding judgments and debts, there are sufficient grounds for the
     Commissioner in the exercise of his discretion to grant licensure as a loan officer upon
     stated terms and conditions.

                                       III. ORDER

1.   The preliminary decision of OCOB staff to revoke the loan officer license of Jeffrey M.
     Corbett is, for good cause shown, vacated and the Respondent's licensure as a loan officer
     is granted conditionally as set forth herein:

     A.     Respondent shall have no meritorious complaints filed against him with OCOB
            for five years from the date of this Order and shall so certify annually under oath
            at renewal for the next five years. Respondent shall resolve current complaints
            promptly and shall hereafter avoid such approaches in his advertising and

     B.     Respondent shall comply promptly and fully with any OCOB request for
            assistance in resolving a complaint, any request for information, or any request for
            assistance in connection with any examination or investigation.

     C.     Respondent shall continue his efforts to remedy or satisfy the outstanding
            judgment of Insulating, Inc. and the judgment of MacCord Mason, LLC and, at
            the time of annual renewal of his licensure, he shall certify under oath to the
            OCOB his progress in remedying these matters.

     D.     Respondent shall diligently seek to improve his credit rating and to strengthen the
            financial position of Empire Mortgage, of which he is the owner and managing
3.     The Commissioner reserves the right to re-open this matter for reconsideration of the case
       and immediate action, including possible summary revocation or suspension of licensure
       if any one of the foregoing conditions is not satisfied.

4.     Any material violation of any of the terms and conditions stated herein shall be grounds
       for immediate action by the Commissioner to re-open this matter and to suspend or
       revoke the license granted by this order.

5.     OCOB staff will prepare and send the Appellant a license in the normal course of

This the 10th day of March, 2004.

                                            Joseph A. Smith, Jr.
                                            Commissioner of Banks
                               CERTIFICATE OF SERVICE

       THE UNDERSIGNED hereby certifies that he has this day served a copy of the
foregoing Final Order and Decision by personal delivery or by faxing a copy to the persons and
fax numbers shown below or by placing a copy of the same in the mail, at Raleigh, first class
mail, postage prepaid and addressed to the persons below:

J. Patrick Haywood, Attorney
Carruthers & Roth, PA
235 N. Edgeworth Street, P.O. Box 540
Greensboro, NC 27402
Phone: (336) 273-7885
Fax: (336) 478-1175

Anne J. Brown
North Carolina Department of Justice
Office of the Attorney General
9001 Mail Service Center
Raleigh, North Carolina 27699-9001
Phone: (919) 716-6800
Fax: (919) 716-6755

This the 10th day of March, 2004.

                                            Daniel E. Garner
                                            Executive Legal Specialist
                                            Office of the Commissioner of Banks
                                            4309 Mail Service Center
                                            Raleigh, North Carolina 27699-4309
                                            Phone: (919) 733-3016
                                            Fax: (919) 733-6918

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