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In re Violation of Wyoming Residential Mortgage Practices Act by CalCon Mut. Mortg. Corp.

Supreme Court of Wyoming

May 5, 2014

IN THE MATTER OF A VIOLATION OF THE WYOMING RESIDENTIAL MORTGAGE PRACTICES ACT BY CALCON MUTUAL MORTGAGE CORPORATION: CALCON MUTUAL MORTGAGE CORP., Appellant (Petitioner),
v.
STATE OF WYOMING, ex rel., WYOMING DEPARTMENT OF AUDIT, DIVISION OF BANKING, Appellee (Respondent)

Appeal from the District Court of Laramie County. The Honorable Thomas T.C. Campbell, Judge.

Representing Appellant: James R. Salisbury and Anthony M. Reyes, Riske & Salisbury, Cheyenne, Wyoming. Argument by Mr. Salisbury.

Representing Appellee: Peter K. Michael, Attorney General; Martin L. Hardsocg, Deputy Attorney General; Ryan T. Schelhaas, Senior Assistant Attorney General. Argument by Mr. Schelhaas.

Before KITE, C.J., and HILL, BURKE, DAVIS, and FOX, JJ.

OPINION

Page 1099

BURKE, Justice.

[¶1] The Wyoming Department of Audit, Division of Banking (Division) conducted a compliance examination of Appellant, CalCon Mutual Mortgage Corporation (CalCon), and determined that, in six separate brokering transactions, CalCon had received application fees and " yield spread premiums" exceeding those previously disclosed to its customers in violation of the Wyoming Residential Mortgage Practices Act. The Division sought reimbursement of the fees charged in those transactions. CalCon objected and the matter was referred to the Office of Administrative Hearings (OAH) for a contested case hearing. The OAH determined that CalCon had violated the Act and the State Banking Commissioner subsequently ordered CalCon to reimburse the fees. CalCon filed a petition for review in the district court, and the district court affirmed. CalCon appeals from the district court's decision. We affirm.

ISSUES

[¶2] CalCon presents the following issues:

1. Whether the Office of Administrative Hearings erred as a matter of law in its construction and interpretation of Wyoming Statute § 40-23-114(d).
2. Whether the decision of the Office of Administrative Hearings is arbitrary, capricious, and not supported by substantial evidence.

The Division states the issues in a substantially similar manner.

FACTS

[¶3] The facts of this case are undisputed. In March, 2010, the Division conducted a regular examination of CalCon's brokering activities within the state to determine compliance with the Wyoming Residential Mortgage Practices Act. After completing the examination, the Division concluded that CalCon, in six separate brokering transactions between January, 2008 and February, 2010, had received application fees and " yield spread premiums" [1] exceeding those

Page 1100

which had been previously disclosed to its customers. In a representative example of the brokering transactions at issue, A.H., a borrower, submitted a residential loan application to CalCon on July 15, 2009. On the same day, CalCon provided A.H. with a good faith estimate of the transaction fees which did not disclose either an application fee or a yield spread premium. CalCon then sent a revised good faith estimate, which disclosed a $150.00 application fee and a yield spread premium of $4,224.21, to A.H. on November 17, 2009, seven days prior to execution of the mortgage loan closing documents. The revised estimate, however, was not accompanied by a written explanation of the increased fees or the reason for charging fees exceeding those which were previously disclosed to A.H. In the remaining brokering transactions at issue, CalCon followed a similar pattern of disclosure of the yield spread premiums, which ranged in amounts from ...


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