Union Financial Corporation - Mortgage Violations Cease and Desist Order

ALAN G. LANCE ATTORNEY GENERAL MARYE. HUGHES Deputy Attorney General Department of Finance P.O. Box 83720 Boise, Idaho 83720-0031 Telephone: (208) 332-8092 Facsimile: (208) 332~8098 BEFORE THE DIRECTOR OF THE DEPARTMENT OF FINANCE OF THE STATE OF IDAHO STATE OF IDAHO, Department of ) Finance, Securities Bureau, ) ) Docket No. 1997-7-72 Complainant, ) ) AGREEMENT AND ORDER vs. ) ) UNION FINANCIAL CORPORATION, ) ) Respondent. ) ~~~~~~~~~~~~~.> The Director of the Department of Finance has instituted an investigation into the conduct of Union Financial Corporation (Respondent). Pursuant to said investigation it appears to the Director that violations of the Idaho Residential Mortgage Practices Act have occurred. The Director and Respondent have agreed to resolve this matter without a public hearing. Therefore, the Director deems it appropriate and in the public interest that this Agreement and Order be entered. Respondent admits the allegations as set forth, and consents to the entry of the Agreement and Order. AGREEMENT AND ORDER - 1

FINDINGS OF FACT 1. Respondent is in the business of accepting applications for residential mortgage loans, commonly referred to as first and second mortgages. Respondent is not otherwise regularly engaged in making regulated consumer loans. 2. Respondent submitted an application to the Department to obtain a regulated lender's license on approximately April 25, 1997. Respondent had been mistakenly informed that a regulated lender's license would allow it to engage in mortgage banking activities in Idaho. 3. A regulated lender's license was granted to Respondent as of June 10, 1997. 4. Prior to the grant of that license, Respondent solicited applications for residential mortgage loans in Idaho, in violation of the Residential Mortgage Practices Act. 5. A Cease and Desist Order was entered against Respondent on July 29, 1997. FINDINGS OF VIOLATIONS 6. Idaho Code § 26-3104 provides that no person shall engage in mortgage banking activities in Idaho without first obtaining a license under the Act from the Director of the Department. 7. Idaho Code§ 26-3103(4) provides an exemption from licensing for regulated lenders licensed under the Idaho credit code and regularly engaged in making regulated consumer loans other than those secured by a security interest in real property. Respondent does not qualify for this exemption because it is not regularly engaged in making regulated consumer loans other than those secured by a security jnterest in real property. 8. Assuming Respondent's mistaken belief regarding the requirement for a mortgage lender's license, Respondent, in any event, actively engaged in and conducted mortgage banking activities, as defined at Idaho Code § 26-3102(12), in Idaho on at least two (2) occasions prior to having obtained its regulated lender's license. AGREEMENT AND ORDER

1. By conducting mortgage banking activities in Idaho without a license, Respondent has violated Idaho Code§ 26-3104. ADMISSIONS AND COMPLIANCE IO. Respondent represents that the information provided to the Department ofFinance concerning these allegations is accurate and complete. 11. Respondent admits that it conducted mortgage banking activities in Idaho in violation ofidaho Code§ 26-3104. 12. Respondent agrees to comply with all provisions of the Idaho Residential Mortgage Practices Act in the future. DONE AND DATED at Boise, Idaho this tq..P,day of August, 1997. Ken Block f Attorney for Union Financial Corporation UNION FINANCIAL CORPORATION By:~l~~:·~ T. I PRESIDENT/CEO rte: ~----------------------~ Securities Bureau Chief Department of Finance IT IS SO ORDERED this ~Cft4-day of August, 1997. AGREEMENT AND ORDER Director of Finance State of Idaho