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ISLAND EQUITY MORTGAGE INC.

State of New York Banking Department

In the Matter of

ISLAND EQUITY MORTGAGE INC.

A Registered Mortgage Broker pursuant
to Article XII-D of the New York 
Banking Law

- Respondent -

SETTLEMENT AGREEMENT

 

                                         

Whereas, ISLAND EQUITY MORTGAGE INC. (“Island Equity” or the “Registrant”) was granted a registration on November 12, 2002 to engage in business as a registered mortgage broker pursuant to Article XII-D of the New York Banking Law (the “Banking Law”) and currently operates its headquarters located at 555 Broadhollow Road, Suite 203, Melville, NY 11747; and

Whereas, on July 7, 2006, the Banking Department (the ‘Department”) received a consumer complaint raising the issue of misleading advertisement received from Island Equity.  A review of the advertisement noted the use of the term ‘United States of America” and an image of the Statue of Liberty;

Whereas, Island Equity’s use of the advertisement represents a violation of Part 38.2(e) of the General Regulations of the Banking Board which reads “No mortgage broker, mortgage banker or exempt organization shall fraudulently or deceitfully advertise a mortgage loan, or misrepresent the terms, conditions or charges incident to a mortgage loan in any advertisement therefore;”

Whereas, in August 2004, the Department cited Island Equity for advertisement violations relating to Island Equity’s failure to include APR in its advertisement and to comply with the provisions of Part 38.2(a) and (d) of the GRBB;

Whereas, Part 38.2(a) requires the inclusion of the legend “Registered Mortgage Broker-NYS Banking Department” and Part 38.2(d) requires a statement to the effect that the mortgage broker arranges mortgage loans with third-party providers.

Whereas, the Superintendent and the registrant mutually agree to resolve such Violations by the imposition of a fine in the amount of $15,000 in lieu of commencing a hearing seeking revocation of the registration;

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

THAT, the Registrant agrees as follows:

  1. Without admitting or denying the aforementioned allegations and fully understanding the terms and conditions of the Settlement Agreement (the “Agreement”), Island Equity knowingly and voluntarily waives its right to a hearing on the violations cited and any appeal relating to this matter.
  2. Island Equity will take all necessary steps to ensure compliance with all applicable federal and state laws and regulations relating to its mortgage business;
  3. Island Equity agrees to pay a fine of $15,000 payable upon execution of this Agreement.  Payment shall be made by electronic transfer, in immediately available funds, pursuant to transfer instructions received from the Banking Department;
  4. Island Equity will develop appropriate written advertisement policies and procedures designed to ensure compliance with all applicable federal and state laws, regulations and supervisory requirements.  The policies and procedures shall, at a minimum, address:
    1. Designation of an individual responsible for monitoring compliance with applicable laws and regulations and supervisory requirements;
    2. Methodology for ensuring that Island Equity and its employees are knowledgeable of regulatory and legislative changes and supervisory requirements;
  5. Within ninety (90) days of the execution of this Agreement, Island Equity will submit a draft copy of its advertisement policies and procedures to the Banking Department for review;
  6. Within one hundred and twenty (120) days of the execution of this Agreement, Island Equity will final copies of its advertisement policies and procedures, approved by an authorized officer,  to the Banking Department for review;
  7. Island Equity fully understands the requirements of this Agreement and that failure to meet the above conditions and timeframes shall result in the Banking Department suspending its mortgage broker registration and scheduling a hearing for revocation;
  8. All communications regarding this Settlement Agreement shall be sent to:

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

    Mr. Ernesto Puteri
    Chief Executive Officer
    Island Equity Mortgage Inc.
    555 Broadhollow Road, Suite 203
    Melville, NY 11747
  9. The provisions of this Settlement 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 Licensee, any of its current or former officers, directors, employees, or insiders, or their successors or assigns with respect to the matters not relating to this Memorandum of Understanding or any criminal aspect of the concerned matters in this Memorandum of Understanding. 
  10. No extension or waiver of the terms of this Settlement Agreement shall be binding on the Banking Department except if in writing, signed by the Superintendent. 
  11. Each provision of this Settlement Agreement shall remain effective and enforceable until stayed, modified, terminated, or suspended in writing by the Superintendent.
  12. The effective date of this Settlement Agreement is the date on which it is executed by the Superintendent or his Deputy.
  13. The provisions of this Settlement Agreement are not confidential

Agreed to and Accepted: 

Dated:__________________.

By: ___________________________
Rholda L. Ricketts
Deputy Superintendent of Banks 
New York State Banking Department  

Dated:__________________.

By: ___________________________
Enersto Puteri, Chief Executive Officer
Island Equity Mortgage, Inc.

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