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SETTLEMENT AGREEMENT
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State of California – Department of Business Oversight
MARY ANN SMITH
Deputy Commissioner
SEAN M. ROONEY
Assistant Chief Counsel
JUDY L. HARTLEY (State Bar No. 110628)
Senior Counsel
Department of Business Oversight
320 West 4
th
Street, Ste. 750
Los Angeles, California 90013-2344
Telephone: (213) 576-7604
Facsimile: (213) 576-7181
Attorneys for Complainant
BEFORE THE DEPARTMENT OF BUSINESS OVERSIGHT
OF THE STATE OF CALIFORNIA
In the Matter of:
THE COMMISSIONER OF BUSINESS
OVERSIGHT,
Complainant,
v.
GATEWAY MORTGAGE GROUP, LLC,
Respondent.
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CRMLA LICENSE NO.: 413-0789
SETTLEMENT AGREEMENT
This Settlement Agreement (Agreement) is entered into by and between Respondent
Gateway Mortgage Group, LLC (Gateway Mortgage) and Complainant the Commissioner of
Business Oversight (Commissioner), and is made with respect to the following facts:
I.
RECITALS
A. Gateway Mortgage is a limited liability company in good standing, duly formed and
existing pursuant to the laws of the State of Oklahoma and is authorized to conduct business in the
State of California.
B. Gateway Mortgage is a residential mortgage lender and servicer licensed by the
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State of California – Department of Business Oversight
Commissioner pursuant to the California Residential Mortgage Lending Act (CRMLA) (Fin. Code
§50000 et seq.). Gateway Mortgage has its principal place of business located at 244 South Gateway
Place, Jenkins, Oklahoma 74037. Gateway Mortgage has 25 branch locations under its CRMLA
license in California and elsewhere. Gateway Mortgage employs mortgage loan originators in its
CRMLA business.
C. The Department of Business Oversight (Department), through the Commissioner, has
jurisdiction over the licensing and regulation of persons and entities engaged in the business of
lending and/or servicing pursuant to the CRMLA.
D. On August 22, 2018, Gateway Mortgage was personally served by the Commissioner
with a Notice of Intention to Issue Orders Suspending Residential Mortgage Lender and/or Servicer
Licenses and to Levy Penalties, Accusation and accompanying documents dated August 21, 2018
(Accusation). Gateway Mortgage has filed a Notice of Defense with the Commissioner regarding
the Accusation.
E. On August 22, 2018, Gateway Mortgage was also personally served by the
Commissioner with an Order to Discontinue Violations Pursuant to Financial Code Section 50321
and Statement of Facts In Support of Order to Discontinue Violations Pursuant to Financial Code
Section 50321 and Notice of Intent to Make Order Final dated August 21, 2018 (Order to
Discontinue Violations) and an Order to Refund Excessive Per Diem Interest Charges Pursuant to
Financial Code Section 50504 dated August 21, 2018 (Order to Refund)(collectively Orders).
Gateway Mortgage has filed requests for hearing with the Commissioner regarding the Orders.
F. The Commissioner hereby acknowledges that Gateway Mortgage has submitted
information demonstrating that it has adopted policies and procedures addressing the issues
described in the Accusation and Orders.
G. As of December 31, 2018, Gateway Mortgage ceased loan originations from retail
production office locations in the state of California except to close loans in its pipeline as of that
date.
H. It is the intention and desire of the parties to resolve this matter without the necessity
of a hearing and/or other litigation.
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State of California – Department of Business Oversight
NOW, THEREFORE, in consideration of the foregoing, and the terms and conditions set
forth herein, the parties agree as follows:
II.
TERMS AND CONDITIONS
1. Purpose. This Agreement is entered into for the purpose of judicial economy and
expediency, and to avoid the expense of a hearing, and possible further court proceedings.
2. Waiver of Hearing Rights. Gateway Mortgage acknowledges its right to an
administrative hearing under the CRMLA in connection with the Accusation and/or Orders and
hereby waives that right to a hearing, and to any reconsideration, appeal, or other rights which may
be afforded pursuant to the CRMLA, the California Administrative Procedure Act, the California
Code of Civil Procedure, or any other provision of law in connection with these matters.
3. Final Orders. Gateway Mortgage hereby agrees that the Orders described in
Paragraph E above are hereby deemed final orders.
4. Administrative Penalty. Gateway Mortgage agrees to pay to the Commissioner the
sum of $37,200.00 in administrative penalties within 5 business days of the effective date of this
Agreement as that date is defined in paragraph 23 herein. The payment shall be made by cashiers’
check payable to the Department of Business Oversight and shall be sent to the Department,
attention, Accounting-Litigation, 1515 K Street, Suite 200, Sacramento, CA 95814-4052.
5. June 28, 2013 through August 31, 2018 Audit. The parties acknowledge that
Gateway Mortgage has conducted a self-audit of per diem interest charges for all loans originated
between June 28, 2013 and August 31, 2018 that has been reviewed by an independent certified
public accounting firm (audit). Pursuant to such audit, Gateway Mortgage has issued refunds plus
per diem interest at a rate of ten percent from the date of loan funding to borrowers identified
pursuant to the audit and submitted the audit report along with evidence of payment of borrower
refunds to the Commissioner.
6. Outstanding Refunds. Gateway Mortgage shall be responsible for ensuring that any
outstanding refund payment owed to any borrower identified in the audit described in Paragraph 5
above shall be escheated to the State of California pursuant to the provisions of the California
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Unclaimed Property Law (Code Civ. Proc., § 1500 et seq.).
7. Effect of Agreement on Licenses. In consideration of the information provided to the
Commissioner by Gateway Mortgage as described in Paragraph F above and the agreement of
Gateway Mortgage to the entry of the finality of the Orders and payment of penalties as provided for
in Paragraphs 3 and 4 above, the Commissioner hereby agrees that, except as otherwise set forth in
this Agreement, she shall not suspend and/or revoke the residential mortgage lender and servicer
licenses of Gateway Mortgage. Accordingly, this Agreement does not affect the licensing status of
Gateway Mortgage.
8. Failure to Comply. Gateway Mortgage agrees that if it fails to comply with
Paragraph 4 above, the Commissioner may, in addition to all other available remedies under the
CRMLA, summarily suspend the CRMLA licenses of Gateway Mortgage until such time as
Gateway Mortgage is in compliance. Gateway Mortgage waives any notice and hearing rights to
contest such summary suspension which may be afforded under the CRMLA, the California
Administrative Procedure Act, the California Code of Civil Procedure, or any other provision of law
in connection therewith.
9. Information Willfully Withheld. This Agreement may be revoked and the
Commissioner may pursue any and all remedies available under law against Gateway Mortgage, if
the Commissioner later finds out that Gateway Mortgage knowingly or willfully withheld
information used and relied upon in this Agreement.
10. Binding. This Agreement is binding on all heirs, assigns and/or successors in interest.
11. Third Party Actions. This Agreement does not create any private rights or remedies
against Gateway Mortgage, create any liability for Gateway Mortgage or limit defenses of Gateway
Mortgage for any person or entity not a party to this Agreement.
12. Full and Final Settlement. The parties hereby acknowledge and agree that this
Agreement is intended to constitute a full, final and complete resolution of the Accusation and
Orders and that no further proceedings or actions will be brought by the Commissioner in connection
with these matters either under the CRMLA, or any other provision of law, excepting therefrom any
proceeding or action if such proceeding or action is based upon facts not presently known to the
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Commissioner and which were actively concealed from the Commissioner by Gateway Mortgage.
13. Commissioner’s Duties. The parties further acknowledge and agree that nothing
contained in this Agreement shall operate to limit the Commissioner's ability to assist any other
agency, (city, county, state or federal) with any prosecution, administrative, civil or criminal,
brought by any such agency against Gateway Mortgage or any other person based upon any of the
activities alleged in these matters or otherwise.
14. Independent Legal Advice. Each of the parties represents, warrants, and agrees that it
has received independent advice from its attorney(s) and/or representatives with respect to the
advisability of executing this Agreement.
15. Reliance. Each of the parties represents, warrants, and agrees that in executing this
Agreement it has relied solely on the statements set forth herein and the advice of its own counsel
and/or representative. Each of the parties further represents, warrants, and agrees that in executing
this Agreement it has placed no reliance on any statement, representation, or promise of any other
party, or any other person or entity not expressly set forth herein, or upon the failure of any party or
any other person or entity to make any statement, representation or disclosure of anything
whatsoever. The parties have included this clause: (1) to preclude any claim that any party was in
any way fraudulently induced to execute this Agreement; and (2) to preclude the introduction of
parol evidence to vary, interpret, supplement, or contradict the terms of this Agreement.
16. Full Integration. This Agreement is the final written expression and the complete and
exclusive statement of all the agreements, conditions, promises, representations, and covenants
between the parties with respect to the subject matter hereof, and supersedes all prior or
contemporaneous agreements, negotiations, representations, understandings, and discussions
between and among the parties, their respective representatives, and any other person or entity, with
respect to the subject matter covered hereby.
17. No Presumption from Drafting. In that the parties have had the opportunity to draft,
review and edit the language of this Agreement, no presumption for or against any party arising out
of drafting all or any part of this Agreement will be applied in any action relating to, connected, to,
or involving this Agreement. Accordingly, the parties waive the benefit of California Civil Code
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State of California – Department of Business Oversight
section 1654 and any successor or amended statute, providing that in cases of uncertainty, language
of a contract should be interpreted most strongly against the party who caused the uncertainty to
exist.
18. Waiver, Modification, and Qualified Integration. The waiver of any provision of this
Agreement shall not operate to waive any other provision set forth herein. No waiver, amendment,
or modification of this Agreement shall be valid or binding to any extent unless it is in writing and
signed by all of the parties affected by it.
19. Headings and Governing Law. The headings to the paragraphs of this Agreement are
inserted for convenience only and will not be deemed a part hereof or affect the construction or
interpretation of the provisions hereof. This Agreement shall be construed and enforced in
accordance with and governed by California law.
20. Counterparts. This Agreement may be executed in one or more separate counterparts,
each of which when so executed, shall be deemed an original. Such counterparts shall together
constitute a single document.
21. Signatures. A signature delivered by facsimile or electronic mail will be deemed an
original signature.
22. Voluntary Agreement. Gateway Mortgage enters into this Agreement voluntarily and
without any coercion and acknowledges that no promise, threats, or assurances about this Agreement
have been made by the Commissioner or any of her officers or agents.
23. Effective Date. This Agreement shall not become effective until signed by all parties
and a fully executed copy is delivered by counsel for the Commissioner via email to counsel for
Gateway Mortgage.
24. Notice. Any notice/report required under this Agreement shall be addressed as
follows:
To Gateway Mortgage Group, LLC: Mitchel H. Kider, Esq.
Weiner Brodsky Kider PC
1300 9
th
Street NW 5
th
Floor
Washington, D.C. 20036
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SETTLEMENT AGREEMENT
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State of California – Department of Business Oversight
David M. Souders, Esq.
Weiner Brodsky Kider PC
1300 9
th
Street NW 5
th
Floor
Washington, D.C. 20036
souders@thewbkfirm.com
To the Commissioner: Judy L. Hartley, Esq.
Senior Counsel
Department of Business Oversight
320 W. 4
th
Street, Suite 750
Los Angeles, California 90013-2344
25. Public Record. Gateway Mortgage acknowledges that this Agreement is a public
record.
26. Settlement Authority. Each signatory hereto covenants that he/she possesses all
necessary capacity and authority to sign and enter into this Agreement.
Dated: 1/30/19 JAN LYNN OWEN
Commissioner of Business Oversight
By______________________________
MARY ANN SMITH
Deputy Commissioner
Dated: 1/29/19 GATEWAY MORTGAGE GROUP, LLC
_______________________________ By
ALAN FERREE, President
APPROVED AS TO FORM:
WEINER BRODSKY KIDER PC
By__________________________
MITCHEL H. KIDER, ESQ. attorneys for
GATEWAY MORTGAGE GROUP, LLC
Commissioner of Business Oversight
By___________________________
JUDY L. HARTLEY, ESQ.
Senior Counsel
