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Agency Mortgage Corporation - Suspension Order

State of New York Banking Department


In the Matter of

Agency Mortgage Corporation

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

- Licensee -

SUSPENSION ORDER

 


Whereas, Agency Mortgage Corporation (“the Licensee”) was granted a license on June 9, 2005, to engage in business as a mortgage banker pursuant to Article XII-D of the New York Banking Law (the “Banking Law”).  Based on the State of New York Banking Department’s (“the Department”) records the Licensee maintains a principal office at 6000 Sagemore Drive, Ste. 6302, Marlton, NJ 08053;

Whereas, Section 591(4) of the New York Banking Law specifies that as a condition for the issuance and retention of a mortgage banker’s license, and subject to such regulations as the Superintendent shall prescribe, applicants for a license shall file with the Superintendent a surety bond or make a deposit in an amount and form prescribed by regulations of the Superintendent;

Whereas, Section 410.8 of Part 410 of the Superintendent’s Regulations specifies that every mortgage banker licensed pursuant to Banking Law Section 591(4) shall file with the Superintendent a corporate surety bond in a principal amount of not less than $50,000 or more than $500,000 based on its aggregate dollar amount of New York loans closed;

Whereas, in accordance with the requirements of Section 410.8 of Part 410 of the Superintendent’s Regulations the Licensee was required to maintain a corporate surety bond in the amount of $100,000 based on its aggregate dollar amount of New York loans closed;

Whereas, Section 410.7(e) of Part 410 of the Superintendent’s Regulations specifies that each mortgage banker shall have prepared an annual audited financial statement as of its fiscal year end, which must be filed with the Department within 90 days of the close of the fiscal year.  The financial statement shall be prepared in accordance with generally accepted accounting principles and audited by an independent certified public accountant.  Such audit shall be performed in accordance with generally accepted auditing standards and shall include a calculation of adjusted net worth as defined in Section 410.1(b)(1) of this Part and an opinion from the accountant;   

Whereas, Section 410.1(b)(2) of Part 410 of the Superintendent’s Regulations specifies that each mortgage banker shall demonstrate and maintain a line of credit in an amount of not less than $1,000,000 provided by an unaffiliated banking institution, insurance company, or a similar credit facility approved by the Superintendent of Banks;   

Whereas, on June 17, 2008, the Department sent a letter to the Bankruptcy Chapter 7 Trustee, (“the Trustee”) informing the Trustee that the Licensee must demonstrate compliance with the following regulatory requirements: maintenance of a line of credit in an amount of not less than $1,000,000, maintenance of a surety bond or place assets on deposit with the Superintendent and the evidence of an adjusted net worth of not less than $250,000;

Whereas, on August 29, 2008, the Department sent a letter to the Trustee informing the Trustee to immediately surrender Agency Mortgage Corporation’s banker license for failure to provide evidence of compliance to the regulatory requirements as stated in the June 17, 2008 letter;
Whereas, on October 7, 2008, the Department received a letter from Western Surety Company cancelling the Licensee’s $100,000 corporate surety bond effective November 6, 2008;

Whereas, on January 15, 2009, the Department sent a letter to the Trustee by certified mail informing the Trustee to voluntarily surrender Agency Mortgage Corporation’s banker license for failure to provide evidence of compliance to the regulatory requirements;

Whereas, on January 23, 2009, the Department sent a letter to the Trustee by certified mail informing the Trustee that the Licensee has failed to provide documentation evidencing the required line of credit, surety bond and adjusted net worth necessary to hold a New York State Banker License.  In addition, the Trustee was advised that the Licensee failed to file the Annual Volume of Operations Report.  The Trustee was further notified that the Department would be taking steps to schedule a hearing for revocation of the Licensee’s banker license.  Lastly, the Trustee was offered the opportunity to surrender the license in lieu of a hearing.

Whereas, pursuant to Section 595.1(b) of the Banking Law, the Superintendent may revoke a mortgage banker’s license if it is found that any fact or condition exists which, if it had existed at the time of original application for such license, would have warranted the Superintendent in refusing originally to issue such license;

Whereas, pursuant to Section 595.2 of the Banking Law, the Superintendent may on good cause shown, or where there is substantial risk of public harm, suspend the Licensee’s mortgage banker license for a period not exceeding thirty days, pending investigation;

Whereas, pursuant to Section 595.5 of the Banking Law, the suspension of a mortgage banker license shall not impair or affect the obligation of any pre-existing lawful contract between Licensee and any person;

Whereas, the Licensee’s failure to maintain the required corporate surety bond or to place assets on deposit, and the Licensee’s failure to provide annual audited financial statements as of its fiscal year end within 90 days of the close of its fiscal year and the Licensee’s failure to maintain a line of credit in an amount of not less than $1,000,000 provided by an unaffiliated banking institution, insurance company, or a similar credit facility approved by the Superintendent of Banks constitutes grounds for suspension or revocation of its license under Sections 595.1(b) and 595.2;

NOW THEREFORE, the Superintendent hereby finds that the Licensee’s mortgage banker license should be suspended because the Licensee has failed to maintain the required corporate surety bond or to place assets on deposit and the Licensee has failed to provide annual audited financial statements as of its fiscal year end within 90 days of the close of its fiscal year and the Licensee has failed to secure and maintain a line of credit of not less than $1,000,000 provided by an unaffiliated banking institution, insurance company, or a similar credit facility approved by the Superintendent of Banks.  Therefore, a substantial risk of public harm exists and/or good cause exists in that the Licensee has defaulted or is likely to default in performing its financial engagements warranting such suspension.  Accordingly, the Superintendent hereby immediately suspends the Licensee’s mortgage banker license for a period not exceeding thirty days from the date of this Order pending investigation.

Witness, my hand and official seal of the Banking Department at the City of New York, this 25th day of March in the year two thousand nine.

____________________________
Rholda L. Ricketts
Deputy Superintendent of Banks