SALISBURY, Md.- The Maryland Commissioner of Financial Regulation is set to collect hundreds of thousands of dollars in penalties from Salisbury businessman, Frank Ward, after issuing a Final Order in the mortgage fraud case against Ward, his two businesses (Ward Construction & The Money Center, Ltd.), and his employee Annette Coston.
The commissioner issued his opinion on the case on November 26th, 2013, which outlines the evidence in an investigation revealing more than a decade of fraudulent mortgage lending. According to this document, Ward must pay a civil penalty to the state in the amount of $16,000 for engaging in unlicensed mortgage origination activities. He also owes a civil penalty of $285,000 for willful unlicensed mortgage lending, mortgage fraud, and for violating a 2010 Cease and Desist Order. That amount must be paid to the Commissioner within 30 days of the Final Order being mailed, which essentially means he must pay up by Christmas.
In terms of restitution to his victims, Ward must notify 43 of the 52 borrowers named in the Final Order, within 30 days, that he will be reimbursing interest payments. The amount of restitution for each borrower is listed in the document. Their names have been redacted to protect their identities. The total amount owed to the borrowers is close to $425,000.
According to the order, payments can be made as cash or they can be used toward the principal amount on the mortgage. Once the borrower decides how they want that money, Ward has 15 days to make it happen. Evidence of these arrangements or transactions must then be mailed to the Commissioner of Financial Regulation.
Ward also owes another $10,000 to one of those clients for collecting an impermissible fee. All mortgages Ward made in violation of the "Maryland Mortgage Lender Law" are now to be considered non-interest bearing principal payment only mortgages. And Ward must dismiss all foreclosure actions currently in process until all restitution and penalties are paid, so that if there is a situation where foreclosure is warranted, then Ward can file an accurate statement of debt in connection with that case.
Ward will also have to pay through his two businesses. Ward Construction must pay $11,400 to one victim in particular for violation of the "Maryland Finder's Fee Law". And the mortgage broker license for "The Money Center, Limited" has officially been revoked. TMC must also forfeit to 9 borrowers, identified in the Final Order, a total of $57,916.56 for violating the MFFL.
All told, Ward owes more than $805,269.71 in penalties and restitution.
Ward's employee, Annette Coston, owes a civil penalty to the Commissioner of Financial Regulation in the amount of $2,250 for engaging in unlicensed mortgage origination activities.
All the respondents in this case have been slapped with a permanent Cease and Desist from any further unlicensed originator activities and violations of Maryland Mortgage Lender Laws. Ward, The Money Center Limited, and Annette Coston are also ineligible for mortgage related licenses until they satisfy the penalties and conditions of the Final Order. Ward, his companies, and Coston have the right to appeal this Final Order by Judicial Review in Circuit Court. But they need to do so within 30 days.
In an attempt to find out if the respondents plan to pay up, or file an appeal, WMDT tried to track down Frank Ward at his place of business and at home, but could not reach him. WMDT also left a number of messages with his attorney Melvin Caldwell, but our calls have not been returned. Annette Coston answered the phone at The Money Centre, Ltd. She spoke to WMDT's Emily Lampa briefly over the phone, but hung up as soon as questions about the case were raised. When a news crew stopped by the business the next day, Coston would not answer any questions and denied her own identity on camera.
Ward and Coston can appeal the Final Order by Judicial Review in Circuit Court. And any ruling in circuit court can be disputed in the Court of Special Appeals.
The Final Order is a civil action. So far, Ward does not face any criminal charges, which means, for now, he's not looking at prison time.
But sources close to the investigation tell WMDT it's definitely a possibility, since federal funds were involved through the use of US Department of Agriculture Rural Development Grants. WMDT put in calls to the USDA Maryland Office, as well as to the FBI, to find out if there is currently an investigation underway. The program director of USDA Single Family Housing in Delaware and Maryland tells us now that the Final Order has been issued they will be seeking advice from their general counsel on whether action needs to taken. If funds were found to be misappropriated somehow, we're told Ward could be debarred from participating in the Rural Development program in the future. A spokesperson at the FBI field office in Baltimore admits they will not confirm nor deny if they have an open investigation on Ward.
If you would like to take a look at the Opinion and Final Order issued by the Maryland Commissioner of Financial Regulation, click here.
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