STATE OF MINNESOTA OFFICE OF ADMINISTRATIVE HEARINGS FOR THE DEPARTMENT OF COMMERCE

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1 OAH STATE OF MINNESOTA OFFICE OF ADMINISTRATIVE HEARINGS FOR THE DEPARTMENT OF COMMERCE In the Matter of Nationwide Solutions, David Newman and Mitch Matthews FINDINGS OF FACT, CONCLUSIONS AND RECOMMENDATION This matter came on before Administrative Law Judge Richard C. Luis on April 13, 2012, for a Prehearing Conference at the Office of Administrative Hearings, 600 North Robert Street, St. Paul, Minnesota. Michael J. Tostengard, Assistant Attorney General, appeared on behalf of the Minnesota Department of Commerce (Department). David Newman (Newman) appeared on his own behalf and without counsel. There was no appearance by or on behalf of Nationwide Solutions and Mitch Matthews (Respondents). The record closed on June 5, 2012, the last day allowed under Minn. Rule to respond to the Department s Motion for Default. STATEMENT OF THE ISSUES 1. Whether the Respondents violated Minn. Stat and by engaging in unlicensed mortgage origination activities (soliciting, placing or negotiating a residential mortgage loan)? 2. Whether Respondents violated Minn. Stat , subd. 1(a)(6) by charging a fee for a product or service where that product or service was not provided? 3. Whether Respondents violated Minn. Stat , subd. 1(a)(5) by failing to conform to the requirements of a written agreement with a homeowner? 4. Whether Respondents violated Minn. Stat , subd. 1(a)(6) by placing false and misleading advertisements before the public? 5. Whether Respondents violated Minn. Stat , subd. 1(a)(9) by making false and misleading statements to customers in connection with a residential loan transaction? 6. Whether Respondents violated Minn. Stat by failing to respond to a customer s complaints?

2 7. Whether Respondents violated by failing to provide customers with written contracts at the time an advance fee was accepted? 8. Whether Respondents violated Minn. Stat. 325N by making representations to homeowners that it would perform services on their behalf in order to obtain forbearance from existing mortgages? 9. Whether Respondents violated Minn. Stat , subd. 1, by offering to obtain an extension of credit in the form of a loan modification without being properly registered with the Commissioner? fees? 10. Whether Respondents violated Minn. Stat. 332/56 by collecting advance 11. Whether Respondents violated Minn. Stat and by failing to provide a borrower with proper disclosure statements? 12. Whether Respondents violated Minn. Stat. 332B.03 and 332B.04, subd. 3, by offering to provide advice or act as an intermediary between a debtor and creditor, and offering debt settlement services without a registration or a bond? 13. Whether Respondents violated Minn. Stat , subd. 1a by failing to respond to the Department s requests for information? Based on the proceedings herein, the Administrative Law Judge makes the following: FINDINGS OF FACT 1. Respondents Nationwide Solutions, David Newman and Mitch Matthews are not licensed in any capacity by the State of Minnesota. 2. The Department received a Complaint from an attorney on behalf of A.W.G. (a Minnesota Resident). The Complaint alleges that Nationwide offered and sold mortgage loan modification services to A.W.G, accepted up-front payments totaling $6,375.00, and failed to provide any modification services. 3. The Department conducted an investigation of Respondents and learned that Nationwide s business consists of providing loan modifications, loss mitigation and debt settlement services. 4. The Allegations in the Notice and Order for Hearing, Order for Prehearing Conference and Statement of Charges (Notice) detail Nationwide s standard modification agreement, its representations to the public, and how payments are made for its services. 2

3 5. On April 17, 2010, A.W.G. signed Nationwide s standard modification agreement to provide loan modification services in connection with the note and mortgage on six properties, including A.W.G. s residence. 6. On April 27, 2010, September 2, 2010 and September 13, 2010, A.W.G. made payments totaling $6, to Nationwide. 7. Nationwide failed to modify any of A.W.G. s loans and failed to account to him for the use of his money. A.W.G. and his attorney attempted to contact the company, but Nationwide failed to respond. 8. On February 18, 2011, the Department sent a request for information to Mitch Matthews and Nationwide. Nationwide did not respond. On April 25, 2011, the Department sent a second request for information to Nationwide. On May 9, 2011, counsel for Nationwide contacted the Department, contending that Nationwide was not a mortgage originator since it did not accept applications for, or actually make, residential mortgage loans. The Department s subsequent written document request of May 17, 2011 was ignored. 9. The Notice was served and filed on March 12, The Notice states, on page 8 under Additional Notice: 1. Respondents failure to appear at the prehearing conference, settlement conference, or the hearing, or failure to comply with any order of the Administrative Law Judge, may result in a finding that Respondents are in default, that the Department s allegations contained in the Statement of Charges may be accepted as true, and that Respondent may be subject to discipline by the Commissioner, including revocation, suspension, censure, or the imposition of civil penalties. 11. Respondents Nationwide Solutions and Mitch Matthews did not appear at the Prehearing Conference, and made no request for a continuance or any other relief. They did not notify the Department, Office of Attorney General, or the Administrative Law Judge that they would be unable to appear. 12. Because Respondents failed to appear as scheduled, Respondents are in default. Under Minn. Rule , the allegations contained in the Notice of and Order for Hearing, Order for Prehearing Conference and Statement of Charges are taken as true and incorporated into these Findings of Fact. 13. On May 31, 2012, David Newman and the Department reached a separate Agreement. Mr. Newman will not contest the allegations in the Statement of Charges, without admitting those allegations; and he reserves his right to submit written argument to the Commissioner as to the appropriate sanction. 3

4 Based on the Findings of Fact, the Administrative Law Judge makes the following: CONCLUSIONS 1. The Department of Commerce and the Administrative Law Judge have jurisdiction in this matter pursuant to Minn. Stat and The Department gave proper notice of the Prehearing Conference and has fulfilled all procedural requirements. 3. Respondents Nationwide and Mitch Matthews, having made no appearance at the Prehearing Conference, and absent a request for a continuance or other relief, are in default. Pursuant to Minn. Rule , the allegations contained in the Notice of and Order for Hearing, Order for Prehearing Conference, and Statement of Charges are hereby taken as true. 4. The Respondents have violated Minn. Stat ; 58.04; 58.13, subd. 1(a)(5), (6), (9); 58.14; 58.16; 325N; , subd. 1; ; 332B.03; 332B.04, subd. 3; and , subd. 1a. 5. Discipline of the Respondents, Nationwide Solutions and Mitch Matthews, and discipline of David Newman, is in the public interest. Based on the Conclusions, the Administrative Law Judge makes the following: RECOMMENDATION IT IS RECOMMENDED that appropriate disciplinary action be taken against Respondents Nationwide Solutions and Mitch Matthews, and against David Newman. Dated: June _15th_, 2012 /s/ Richard C. Luis RICHARD C. LUIS Administrative Law Judge Reported: Default 4

5 NOTICE This report is a recommendation, not a final decision. The Commissioner of Commerce will make the final decision after a review of the record. Under Minn. Stat , the Commissioner shall not make a final decision until this Report has been made available to the parties for at least ten calendar days. The parties may file exceptions to this Report and the Commissioner must consider the exceptions in making a final decision. Parties should contact Mike Rothman, Commissioner, Minnesota Department of Commerce, 85 Seventh Place East, Suite 500, St. Paul, MN 55101, telephone (651) to learn the procedure for filing exceptions or presenting argument.. The record closes upon the filing of exceptions to the Report and the presentation of argument to the Commissioner, or upon the expiration of the deadline for doing so. The Commissioner must notify the parties and Administrative Law Judge of the date the record closes. If the Commissioner fails to issue a final decision within 90 days of the close of the record, this Report will constitute the final agency decision under Minn. Stat , subd. 2a. In order to comply with this statute, the Commissioner must then return the record to the Administrative Law Judge within ten working days to allow the Judge to determine the discipline imposed. Under Minn. Stat , subd. 1, the Agency is required to serve its final decision upon each party and the Administrative Law Judge by first class mail or as otherwise provided by law. 5