JOSE DE LA ROSA
Caught up in ‘mess’

The professional fortunes of would-be mortgage broker Jose de la Rosa may be improving, with a Dec. 19 decision from Suffolk Superior Court ordering the Division of Banks to issue him the license it denied in February.

Associate Justice Thomas P. Billings ruled that the DOB’s denial of de la Rosa’s application for a mortgage broker’s license “was arbitrary, capricious and based on an error of law.”

But DOB Senior Deputy Commissioner David Cotney said his agency is “concerned” with the decision “given the current environment with rising instances of mortgage fraud.”

The division is reviewing its options, he added.

A year ago, de la Rosa’s pending application for a Massachusetts license for his brokerage, Boston Financial Group, had a major setback when DOB learned that a letter copied and pasted on its letterhead, over a fake signature, had been sent from the Jamaica Plain office BFG was setting up to a Florida mortgage lender, claiming BFG was already licensed here.

The letter, faxed to Fremont Investment & Loan in Tampa, Fla., on Dec. 19, 2005, carried the signature of a DOB employee with whom de la Rosa was working on the application. It stated that the application had been approved. When Fremont called the division to confirm it, it was found to be a fake.

The division quickly issued a cease-and-desist letter to de la Rosa and forwarded a “consumer alert” to the press, a story covered in Banker & Tradesman on Dec. 26, 2005.

De la Rosa informed Banker & Tradesman of the court decision in his favor. In the 27-page decision, Suffolk Superior Court Associate Justice Billings found that Wilfredo Rodriguez – a friend of a Realtor friend of de la Rosa’s whom he had hired as a commissioned loan officer but was not to start work until January – typed the fake letter, taped it onto a copy of DOB letterhead, and faxed it to Fremont without de la Rosa’s knowledge when he was left alone in BFG’s Centre Street office on Dec. 19.

De la Rosa and his then-lawyer, Jim Hoy, subsequently provided DOB with a notarized affidavit that Rodriguez had signed to that effect. DOB officials also visited de la Rosa at his office to discuss the matter. The agency later denied his application.

The Feb. 17 denial letter “said everything else was fine, except that this guy issued this letter,” according to de la Rosa. He said he appealed the decision with DOB but the agency upheld it, so he turned to the courts.

De la Rosa is a career mortgage loan officer who has worked in Boston for 10 years as a mortgage banker for Citizens Bank, Sovereign Bank, Fleet Bank and Wells Fargo, according to his current lawyer, Roger Matthews.

BFG also has been licensed in Florida since the summer of 2005, but de la Rosa, who has lived in the Boston area since 1989 and has a bachelor’s degree from Northeastern University, wants to focus on the Massachusetts market now, court documents showed.

Matthews said he argued that “despite certain ‘paperwork’ [a U.S. Employment Eligibility Verification form stating Rodriguez ‘began employment on 12/05/05’], in fact Rodriguez was not an employee of BFG and, therefore, it could not be held responsible for his wrongful action.”

He further argued, he said, that “the record was clear” that there was no unlicensed mortgage broker activity on BFG’s part.

However, a year ago, Cotney indicated that the false letter to the Florida lender amounted to doing business.

“It’s illegal for one of our companies to do business with an unlicensed broker,” he told Banker & Tradesman at the time, explaining why a lender might double-check to get proof that a brokerage firm with which they are dealing is licensed.

‘Strict Standard’

Matthews said he also told the court that “the division’s charge to protect consumers from the unscrupulous would not be supported in any way by denying a license to BFG, but rather would be undercut, because the evidence was unrebutted that he was to be of great assistance to special classes of consumers, minorities in general and Hispanics in particular, who otherwise would be very easy prey for people with less integrity and honesty.”

He said the judge’s decision was based on a “strict standard of review,” which, he said, is what Assistant Attorney General Juliana Rice argued for on behalf of DOB at the mid-December hearing.

“They want the strict standard of review, because they want to make it hard to change their agency’s decisions,” Matthews said.

For this reason, he added, he hopes the state will not appeal the court’s ruling.

“It’s very nice to see a worthy individual get vindicated by the system, even though he got caught up in a bad administrative proceeding that was not of his doing,” he noted.

Neither Matthews nor his client knows where Rodriguez is now.

“I wish I did. I’d like to forward this information to him so he can see what kind of mess he caused me,” de la Rosa said.

The DOB has 30 days from the time the court’s decision is entered on the docket to decide what action it will take.

“We obviously respect the court’s decision,” Cotney said. “However, this case involved a forged letter using the division’s letterhead and the seal of the commonwealth.”

The fact that the agency took public action against de la Rosa because his company acted without obtaining a license doesn’t mean he can’t get one in the future, Cotney noted, adding that there is precedent for such a chain of events at his agency.

He also noted that despite a relatively slow real estate market and the DOB’s highly publicized recent crackdown on predatory mortgage, his agency “hasn’t seen any slowdown” in the number of applicants for new mortgage broker licenses.

In a footnote to his decision, Billings wrote that de la Rosa’s hiring practices, “at least in respect to Mr. Rodriguez and at least in hindsight, were a good deal less careful than one would wish and expect. He should not, solely on the strength of a recommendation from a professional acquaintance, have trusted Rodriguez to the point of leaving him alone in BFG’s offices and with its files.”

However, he added, while he has no direct evidence as to how Rodriguez presents personally, “I can infer from the events of November-December 2005 that he makes an excellent first impression.”