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Mega Home Equities, Inc. - Settlement Agreement

January 30, 2006

State of New York
Banking Department


Mega Home Equities, Inc.

A Mortgage Broker registered
pursuant to Article XII-D of the Banking Law

(Respondent)

SETTLEMENT AGREEMENT

WHEREAS, Mega Home Equities, Inc. ("Mega" "Registrant"), with headquarters at 115-70 Lefferts Boulevard, South Ozone Park, NY 11420, was granted a registration on February 26, 1998 to engage in business as a registered mortgage broker pursuant to Article XII-D of the New York Banking Law (the "Banking Law") by the Superintendent of Banks (the "Superintendent") of the State of New York;

WHEREAS, Section 590.2(c) of the Banking Law requires a registrant to apply for authority to open and maintain one or more branch offices;

WHEREAS, Section 38.1(u) of the General Regulations of the Banking Board defines a full service branch office as any location at which loan processing takes place, whether or not loan solicitation also occurs thereat, and the licensee or registrant owns or pays rent or any other form of consideration for the use thereof;

WHEREAS, Section 38.1(v) of the General Regulations of the Banking Board defines a loan solicitation branch as any location at which only loan solicitation takes place and the licensee or registrant owns or pays rent or any other form of consideration for the use thereof;

WHEREAS, the Banking Department issued industry letter dated June 14, 1999, disallowing net branching for mortgage brokers and mortgage bankers;

WHEREAS, the examination of Mega by the New York State Banking Department as of April 8, 2005, disclose that the Registrant operated three net branches at the following locations in violation of the provisions of the industry letter;

WHEREAS, in a letter to the Department dated April 25, 2005, the Registrant admitted that the above solicitation branches operated under split arrangements (50% of all fees) with branch managers paying expenses, such as rents, utilities, credit reports, and advertisements.  

Additionally, the Branch Establishment Agreement between the Registrant and the Jamaica office disclosed the following:

WHEREAS, the Superintendent and the Registrant mutually agree to resolve such violation by the imposition of a fine in the aggregate amount of $15,000.00, in lieu of commencing a hearing seeking revocation of Registrant’s registration.

NOW, THEREFORE IT IS STIPULATED AND AGREED BY THE PARTIES HERETO AS FOLLOWS:

THAT, the Registrant agrees as follows:

  1. Mega, fully understanding the terms and conditions of the Settlement Agreement ( the “Agreement”), freely and voluntarily waives its right to a hearing on the violation cited and any and all appeal relating to this matter.
  2. The loan solicitation licenses for each aforementioned location were surrendered effective May 24, 2005. Additionally, Mega ceased all New York regulated mortgage activities at those locations.
  3. Mega will take all necessary steps to ensure compliance with all applicable federal and state laws and regulations relating to its mortgage business, including but not limited to Article XII-D of the Banking Law; General Regulations of the Banking Board Parts 38, 39 and 41; and the Superintendent’s Regulations Part 410.
  4. Mega agrees to pay a fine in the amount of $15,000.00 payable in three equal installments as follows:
  • $5,000 upon execution of this Agreement;
  • $5,000 within 90 days of the date of this Agreement, and
  • $5,000 within 180 days of the date of this Agreement.

Payment shall be made by electronic transfer, in immediately available funds, pursuant to transfer instructions received from the Banking Department.

  1. All communication regarding this Agreement shall be sent to:

Rholda L. Ricketts
Deputy Superintendent of Banks
Mortgage Banking Division
New York State Banking Department
One State Street
New York , NY 10004

Mr. Krishna Singh
Mega Home Equities Inc.
115-70 Lefferts Boulevard
South Ozone Park , NY 11420

  1. The provisions of this Agreement shall not bar, estop or otherwise prevent the Superintendent, or any state or federal agency or department, from taking any other action affecting the Registrant, any of its current or former officers, directors, employees, or insiders, or their successors or assigns with respect to the matters relating to this Agreement or other matters not relating to this Agreement.
  2. No extension or waiver of the terms of this Agreement shall be binding on the Banking Department unless it is in writing and signed by the Superintendent or her Deputy.
  3. Each provision of this Agreement shall remain effective and enforceable until stayed, modified, terminated or suspended in writing by the Superintendent or her Deputy.
  4. The effective date of this Agreement is the date on which it is executed by the Superintendent or her Deputy.
  5. The provisions of this Agreement are not confidential.

Agreed to and accepted by:  

New York State Banking Department

by:_________________________
Rholda L. Ricketts
Deputy Superintendent

Dated: ________________________

Mega Home Equities, Inc.

by: ________________
Krishna Singh
President/Owner

Dated: ________________________

by: ________________
Richard H. Lovell,  
Legal Counsel  

Dated: ________________________  

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