Filed: october 16 department of real estate
hearing date: june 15
Before the department of real estate
State of california
* * * * *
No. H-35387 la
Accusation
In the Matter of the Accusation of
New haven financial inc;
And, lawrence s. Rabinoff,
Individually and as designated
Officer of New Haven Financial Inc.,
Respondents,
The Complainant, Robin Trujillo, a Deputy Real Estate Commissioner of the State of California, for cause of Accusation against NEW HAVEN FINANCIAL INC., and LAWRENCE S. RABINOFF, individually and as designated officer of New Haven Financial Inc., alleges as follows:
1.
The Complainant, Robin Trujillo, acting in her official capacity as a Deputy Real Estate Commissioner of the State of California, makes this Accusation against NEW HAVEN FINANCIAL INC. And lawrence s. RABINOFF
2.
All references to the Code are to the California Business and Professions Code and all references to Regulations are to Title 10, Chapter 6, California Code of Regulations.
License history
3.
A. New haven fiiancial inc. At all times mentioned, NEW HAVEN FINANCIAL INC. (NHF) was licensed or had license rights issued by the Department of Real Estate (Department) as a real estate broker. On July 28,1994, NHF was originally licensed as a real estate broker by LAWRENCE S. RABINOFF as the designated officer.
B. Lawrence s. Rabinoff. At all times mentioned, LAWRENCE S. RABINOFF (RABINOFF) was licensed or had license rights issued by the Department as a real estate broker. On September 16,1989, RABINOFF was originally licensed as a real estate broker; and
C. At all times material herein, NHF was licensed by the Department as a corporate real estate broker by and through RABINOFF, as the designated officer and broker responsible, pursuant to Code Section 10159.2 of the Business and Professions Code for supervising the activities requiring a real estate license conducted on behalf NHF of by NHF's officers, agents and employees, including RABINOFF.
Brokerage and licensed activities
4.
At all times mentioned, in the City of Calabasas, County of Los Angeles, NHF acted as a real estate broker and conducted licensed activities within the meaning of:
A. Code Section 10131 (d). NHF operated a mortgage and loan brokerage; and
B.in addition, NHF conducted broker-controlled escrows through its escrow division under the exemption set forth in California Financial Code Section 17006 (a) (4) for real estate brokers performing escrows incidental to a real estate transaction where the broker is a party and where the broker is performing acts for which a real estate license is required.
Mortgage loan and broker escrow audit
5.
On September 24, the Department completed an audit examination of the books and records of NHF pertaining to the mortgage loan and broker-escrow activities described in Paragraph 4 that require a real estate license. The audit examination covered a period of time beginning on March 1 to January 31. The audit examination revealed violations of the Code and the Regulations as set forth in the following paragraphs, and as more fully discussed in Audit Report LA 070290 and 070295 and the exhibits and work papers attached to said audit report.
Trust accounts
6.
At all times mentioned, in connection with the activities described in Paragraph 4, NHF accepted or received funds in trust (trust funds) from or on behalf of buyers, sellers, borrowers and escrow holders. Thereafter NHF made disposition of such funds. From time to time herein mentioned during the audit period, said trust funds were deposited and/or maintained by NHF in the bank accounts as follows:
New Haven Financial Inc. Account No. 7601002673 Union Bank of California P.O. Box 512380 Los Angeles, CA 90051-0380 (escrow trust account)
New Haven Financial Inc. Account No. 1290067479 Union Bank of California P.O. Box 512380 Los Angeles, CA 90051-0380 (loan servicing trust account)
Violations of the real estate law
Mortgage loand and broker escrow audit
Violations of the real estate law
Mortgage loand and broker escrow audit
7.
In the course of activities described in Paragraphs 4 and 6, above, and during the examination period described in Paragraph 5, Respondents NHF and RABINOFF, acted in violation of the Code and the Regulations in that they:
(a) Permitted, allowed or caused the disbursement of trust funds from the loan servicing trust account where the disbursement of funds reduced the total f aggregate funds in escrow trust account, to an amount which, on January 31, was $1,939.65, less than the existing aggregate trust fund liability of NHF to every principal who was an owner of said funds, without first obtaining the prior written consent of the owners of said funds, as required by Code Section 10145 and Regulations 2832.1,2950 (g) and 2951.
(b) Failed to notify investors Sherman and Symonds that borrower Yniguez had defaulted on her loan, in violation of Code Section 10233 (c) (1).
(c) The bank accounts for the broker escrow and loan servicing were not in the name of the broker as trustee at a bank or other financial institution, nor designated as trust accounts, in violation of Code Section 10145 of the Code and Regulations 2832 (a), 2950 (d) and 2951
(d) No separate trust fund beneficiary records were maintained for the unidentified and unaccounted for trust funds in the loan servicing trust account in the amount of $2,000, in violation of Code Section 10145 and Regulations 2831.1,2950 (d) and 2951.
(e) Charged financed points and fees in excess of $1000 or 6% of the original principal balance, exclusive of points and fees in the three (3) covered loan transactions for borrowers Yniguez, Goeckner and Ray, in violation of Financial Code Section 4979.6 of the Predatory Lending Act.
(f) Failed to provide Consumer Caution and Home Ownership Counseling Notice no later than three business days prior to signing of the loan documents in the Yniguez, Goeckner and Ray covered loan transactions, in violation of Financial Code Section 4973 (k) (1) of the Predatory Lending Act.
(g) (1) Permitted and/or caused the disbursement of trust funds t credit report companies on the representation that these amounts were needed to pay for credit report fees, which payments exceeded the actual costs of these services. Respondents did not disclose to borrowers Yniguez, Rhodes, Balderas-Gallardo, Keshishi, Metcalf, Goeckner and Ray these mark-ups of said trust funds, did not obtain their consent to these mark-ups. Respondents retained the difference between the amounts paid and the actual costs of the services, in violation of Code Sections 10176 (a) and 10176 (g), and
(g) (2) Failed to disclose in writing to all parties including borrowers Anaya, Rhodes, Balderas-Gallardo, Keshishi, Metcalf, Arredondo, Goeckner and Cohen of HNF's financial interest and ownership of its escrow division, as required by Code Section 10176 (g) and Regulation 2950 (h).
(h) Failed to retain a true and correct copy of a Department of Real Estate approved Mortgage Loan Disclosure Statements signed by the broker for borrowers Yniguez, Anaya, Balderas-Gallard, Keshishi, Metcalf, Goeckner and Ray, as required by Code Section 10240 and Regulation 2840.
(i) Failed to retain a statement wherein the investors indicate whether or not the investment in the multi-investor loans that exceeded ten percent (10%) of the investors adjusted gross income or ten percent (10%) of the investors net worth, as required by each investor of whom meets one or both of the aforesaid suitability standards and qualifications, evidenced by a statement signed by the investor charged, and retained by NHF for four years, in violation of Code Sections 10238 (f) (1) with respect to borrowers Yniguez, Rhodes, Balderas-Gallardo, Keshishi, Metcalf and Arredondo.
Disciplinary statutes and regulations
Mortgage loan and broker escrow audit
8.
The conduct of Respondents NHF and RABINOFF described in Paragraph 7, above, violated the Code and Regulations as set forth below:
Paragraph provision violated
7 (a) Code Section 10145 and Regulations 2832.1,2950 (g) and 2951
7 (b) Code Section 10233 (c) (1)
7 (c) Code Section 10145 and Regulations 10145 and Regulations 2832 (a), 2950 (d) and 2951
7 (d) Code Section 10145 and Regulations 2831.1,2950 (d) and 2951
7 (e) Financial Code Section 4979.6
7 (f) Financial Code Section 4973 (k) (1)
7 (g) Code Sections 10176 (a) and 10176 (g) and Regulation 2950 (h)
7 (h) Code Section 10240 and Regulation 2840
7 (i) Code Section 10238 (f) (1)
The foregoing violations constitute cause for the suspension or revocation of the real estate license and license rights of NHF and RABINOFF, under the provisions of Code Sections 10176 (a) for substantial misrepresentation, 10176 (c) for a continued and flagrant course of misrepresentations or making of false promises through real estate agents or salespersons, 10176 (g) for undisclosed compensation, 10177 (d) for violations of the Real Estate Law, 10177 (g) for negligence or incompetence.
Misrepresentation
9.
Respondents NHF and RABINOFF intentionally engaged in the conduct above set forth in Paragraph 7. Alternatively, Respondents NHF and RABINOFF engaged in deceit by way of negligent misrepresentation, in violation of and Code Sections 10176 (a) for misrepresentation, 10176 (i) for fraud and dishonest dealing and/or 10177 (g) for negligence or incompetence.
10.
The overall conduct of Respondents NHF and RABINOFF constitutes negligence or incompetence. This conduct and violations are cause for the suspension or revocation of the real estate license and license rights of Respondents NHF and RABINOFF pursuant to Code Section 10177 (g).
11.
The overall conduct of Respondent RABINOFF constitutes a failure on his part, as officer designated by a corporate broker licensee, to exercise the reasonable supervision and control over the licensed activities of NHF as required by Code Section 10159.2, and to keep NHF in compliance with the Real Estate Law, and is cause for the suspension or revocation of the real estate license and license rights of RABINOFF pursuant to the provisions of Code Section 10177 (h).
WHEREFORE, Complainant prays that a hearing be conducted on the allegations of this Accusation and that upon proof thereof, a decision be rendered imposing disciplinary action against the license and license rights of Respondents NEW HAVEN FINANCIAL INC. And lawrence s. RABINOFF, under the Real Estate Law (Part 1 of Division 4 of the Business and Professions Code) and for such other and further relief as may be proper under other applicable provisions of law.
Dated this
Deputy Real Estate Commissioner
Cc:
New Haven Financial Inc.
C/o Lawrence S. Rabinoff D.O.
Sacto
Audits Darryl M. Thomas
Kimberly Wessle
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