East Bay Funding Corp. v. McCaul

Determination of respondent Superintendent of Banks, dated May 21, 2001, revoking petitioner’s mortgage banker license and fining petitioner $100,000, unanimously confirmed, the petition denied and the proceeding brought pursuant to CPLR article 78 (transferred to this Court by order of the Supreme Court, New York County [Leland DeGrasse, J.], entered on or about February 16, 2002), dismissed, without costs. 140 Substantial evidence supports respondent’s finding that petitioner routinely charged consumers excessive mortgage brokerage fees for which no meaningful processing or underwriting was provided and that were drastically disproportionate to the time spent and expertise involved. We reject petitioner’s argument that respondent cannot sanction on the basis of such finding since there is no law or regulation that limits the fee, i.e., “number of points,” a mortgage broker can charge. Respondent’s construction of Banking Law article 12-D is entitled to deference if not irrational or unreasonable (see Matter of Howard v Wyman, 28 NY2d 434, 438 [1971]). Therein, it is the declared policy of the State “to ensure that the mortgage lending industry is operating fairly, honestly and efficiently, free from deceptive and anti-competitive practices” (Banking Law § 589). This was adequate to give petitioner constitutionally fair notice that the fees it was charging were excessive (see Matter of Gold v Lomenzo, 29 NY2d 468, 476-479 [1972]). We have considered petitioner’s other arguments, including that respondent’s conduct in a prior proceeding estops it from asserting that petitioner’s fees were excessive, and that respondent is bound by a settlement agreement reached in this proceeding, and find them unavailing. We note the findings of other violations that petitioner does not contest. Concur — Buckley, P.J., Nardelli, Mazzarelli, Sullivan and Gonzalez, JJ.