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First Advantage Funding, LTD - Suspension Order

State of New York Banking Department


In the Matter of

First Advantage Funding, LTD         

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

- Registrant -

SUSPENSION ORDER

 


Whereas, First Advantage Funding, LTD (“the Registrant”), was granted a registration on  January 24, 1989 to engage in business as a mortgage broker 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 Registrant maintains a principal office at 173-12 Jamaica Avenue, # 2F, Jamaica, NY 11432;

Whereas, Section 591-a of the New York Banking Law specifies that as a condition for the issuance and retention of a mortgage broker’s registration, and subject to such regulations as the superintendent shall prescribe, applicants for a registration 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 410.14 of Part 410 of the Superintendent’s Regulations specifies that every mortgage broker registered pursuant to Banking Law Section 591-a shall file with the Superintendent a corporate surety bond in a principal amount of not less than $10,000 or more than $100,000 based on its number of applications;

Whereas, in accordance with the requirements of Section 410.14 of Part 410 of the Superintendent’s Regulations, the Registrant was required to maintain a corporate surety bond in the amount of 10,000 based on its number of  New York State applications;

Whereas, on November 19, 2008, a Department field examiner made a request to the Mortgage Banking Bond Unit for verification of a bond continuation certificate for the Registrant.  It was determined that the bond identified on the bond continuation certificate was not on file with the Department;

Whereas, on November 19, 2008, the Mortgage Banking Bond Unit telephoned the Baltimore, MD office of the surety company, CNA Surety, to confirm the validity of the bond.  The surety confirmed that the bond referenced on the bond continuation certificate had been cancelled effective June 30, 2004.  The surety was also asked to confirm the validity of the bond that was on file with the Department.  The bond on file with the Department had been cancelled effective June 13, 2005.  According to the Department’s records this bond was active and in effect.  The Registrant had been operating without a valid surety bond since June 13, 2005; 

Whereas, on November 24, 2008, the Mortgage Banking Bond Unit telephoned the Attorney - in - Fact for the surety, Mr. Glenn J. Goldburn, Jr. of Oxley & Goldburn Insurance, Inc.  Mr. Goldburn stated that the bond continuation certificate appeared to be a “total forgery” since his signature as written on the certificate was not authentic;

Whereas, on November 24, 2008, Mr. Michael Chirozzi, Underwriting Manager, at CNA Surety telephoned the Mortgage Banking Bond Unit and reiterated that the bond number on the bond continuation certificate was cancelled and the bond certification did not appear to be valid;

Whereas, on December 2, 2008, Mr. Chirozzi sent an email to the Mortgage Banking Bond Unit summarizing CNA’s position concerning the bond continuation certificate.    CNA’s stance is that the bond continuation certificate is fraudulent since it was cancelled in August, 2004 and not June 30, 2004 as originally stated on November 19, 2008 and the signature was not Mr. Goldburns’.  Mr. Chirozzi also forwarded an email that CNA had received from Ms. Sherrie S. Kennedy at the agent involved with the transaction.  The agent confirmed the following: the agency did not issue a bond renewal certificate for the Registrant for the term April 11, 2008 – April 11, 2009, the bond renewal certificate and power of attorney are not documents currently being utilized by the agent, the bond renewal certificate does not list the current attorneys employed at the agent, the bond renewal certificate was on the wrong color paper, the bond renewal certificate shows no evidence of the agent’s corporate seal and if the bond was still in effect Western Surety Company would be listed as the surety on the renewal certificate;

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

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 Registrant’s mortgage broker registration for a period not exceeding thirty days, pending investigation;

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

Whereas, the Registrant’s failure to maintain the required corporate surety bond or to place assets on deposit and the Registrant’s fraudulent practice of submitting an improperly authorized bond continuation certificate to the Department constitutes grounds for suspension or revocation of its registration under Sections 595.1(b) and 595.2 and;

NOW THEREFORE, the Superintendent hereby finds that the Registrant’s mortgage broker registration should be suspended because the Registrant has failed to maintain the required corporate surety bond or to place assets on deposit and has perpetrated documentation fraud.  Therefore, a substantial risk of public harm exists and/or good cause exists in that the Registrant has defaulted or is likely to default in performing its financial engagements warranting such suspension.  Accordingly, the Superintendent hereby immediately suspends the Registrant’s mortgage broker registration for a period not exceeding thirty days from the date of this Suspension Order pending investigation.

Witness, my hand and official seal of the Banking Department at the City of New York, this 24th day of April in the year two thousand nine.

____________________________
Rholda L. Ricketts
Deputy Superintendent of Banks

 

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