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35. Mortgage Applications

Case #260 Matter of DOS v. Levine, Consent Order -submission of false mortgage application; $3,500 fine

1 DOS 94 Matter of ERA Faza Realty - DOS is not divested of jurisdiction by voluntary surrender of license or expiration of license if action occurred while licensed, while an applicant for a license, or while eligible to automatically renew per RPL §441(2); requirement of informed consent to dual agency; concealment, misrepresentation and failure in seeking to purchase for own account (2 transactions arranged - sale to licensee and resale at profit to customer, who was qualified for mortgage, but who seller was told had failed to qualify); disgorge profit and commission; fee not related to performance of legitimate service; representative broker must be corporate officer and is vicariously liable for wrongful act of associated salesperson under RPL §442-c; restitutionnot attributed to corporate broker where no proof that funds illegally obtained were collected by or in any way benefitted the corporation; DOS has no power to assess damages; representative broker not required to supervise another representative broker and not liable for misconduct of another representative broker who meets test of RPL §442-c; complaint dismissed as to other representative broker

CRC #586 Matter of DOS v. Sbarra, Consent Order - falsifying of mortgage application (false information on income, forged signatures); fraud and fraudulent practices violates RPL §441-c; commingling of escrow monies violation 19 NYCRR §175.1; fine of $10,000 and six-month suspension

3 DOS 95 Matter of Tucci - licensee as partner in entity selling property to builder does not come within 19 NYCRR §175.6; dual agency found where licensee represents seller in real estate transaction and serves as mortgage broker for buyer; failure to make agency relationships clear violates 19 NYCRR §175.7; pre-hearing and post-hearing motions; restitution of $1,081; fine of $1,000; DOS determination vacated by stipulation of settlement; non-admission, restitution of earned mortgage broker fee

CRC #95-0475, Matter of DOS v. Weinrib - Consent Order - failure to pay judgment; mortgage application; attempt to broker commercial real estate mortgage under unlicensed name; failure to satisfy judgment in a timely manner; $500.00 fine; $1,005.58 restitution plus interest

80 DOS 97 Matter of DOS v. Robin - laches; reliance on attorney advise; mortgage applications; real estate brokers license needed to negotiate loan on unimproved property; mortgage broker license only applies to residential mortgage loans; disclosure of ownership interests; dual agency; disclosure of agency relationships; bankruptcy; to establish defense of laches, respondent must show substantial prejudice arising out of the delay such that the delay significantly and irreparably handicapped it in preparing a defense; reliance on attorney advise is a valid defense and may relieve respondent of liability; DOS has jurisdiction to review licensee’s conduct for untrustworthiness or incompetency even when not acting in licensed capacity; Reg. 175.7 requires a broker to make it clear for which party he is acting; licensee may act as a dual agent only upon full and fair disclosure and with the informed consent of the parties; it is not necessary that there be a showing of injury or actual fraud for a finding of improper conduct regarding dual agency so long as the licensee fails to obtain the principals informed consent; licensee may act as agent and principal in same transaction on disclosing all relevant facts to principal; broker may be required to return monies, with interest, where broker was not entitled thereto; discharge of broker’s debts in bankruptcy prevents DOS from ordering refund, however, DOS may impose other sanctions; corporate broker is responsible for acts of its representative broker within actual or apparent scope of authority; sanctions cannot be applied against entity no longer licensed, which has been unlicensed for more than two years and has no automatic right of renewal; individual broker’s license suspended for 6 months

84 DOS 99 Matter of DOS v. Woodland - failure to appear at hearing; jurisdiction; mortgage applications; failure to pay judgment; ex parte hearing may proceeding upon proof of proper service; DOS has jurisdiction over respondents for acts of misconduct which occurred during licensure even though the licenses expired on their own terms; DOS fails its burden of proof to establish broker failed to obtain signature on agency disclosure form; DOS fails its burden of proof to establish that a broker has an obligation to “pre-qualify” a potential purchaser; broker breached duty to deal honestly with the public when advised purchaser he would assist in obtaining financing and failed to do so; DOS fails its burden of proof that broker wrongfully failed to hold a $500.00 deposit in escrow as deposit was remitted to seller with the permission of buyer; failure to pay judgment without a showing that broker is unable to do so is a demonstration of untrustworthiness; no action to be taken for reapplication for broker’s license until payment of $1,000.00 fine and proof of satisfaction of judgment

13 DOS 01 Matter of DOS v. Parkin - forgery; fraudulent practices; jurisdiction; mortgage application; notarization; licensee demonstrates untrustworthiness by causing a deed bearing a forged signature to be recorded; licensee demonstrates untrustworthiness and incompetency by using various social security numbers other than his own on various documents prepared by him including license application, mortgage application and various bankruptcy petitions; failure to cooperate with DOS investigation by failing to supply requested and agreed to documents and lying to investigator about his knowledge of a fraudulent notary public; DOS retains jurisdiction where, although license has expired, two applications are pending, one for renewal and one for a new license; broker’s license revoked and pending applications denied

1517 DOS 07 Matter of Bizzari- Broker; fraud and breach of fiduciary duty re deposit; bad check; commingling (19 NYCRR §175.1) unauthorized demand for 50% down payment; fraud and misrepresentation as registered HUD agent; false statement that purchase would be owner-occupied; failure to disclose broker ownership interest in listed property (19 NYCRR 175.6); failure to deliver duplicate original (19 NYCRR 175.12); agency disclosure notice (RPL § 443[3][b]); use of unlicensed name (RPL § 440-a; 441 [1][a]); incompetency; revocation

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