MO14643/MPB OAH Docket No. 16-1005-21890-2

STATE OF MINNESOTAOFFICE OF ADMINISTRATIVE HEARINGSFOR THE DEPARTMENT OF COMMERCE

In the Matter of Jason McCallum; Justin NOTICE OF AND ORDER FORMcCallum; Chad Buchanan; and Save My HEARING, ORDER FOR PREHEAR1NGHome USA Co., Inc. CONFERENCE, ORDER TO SHOW

CAUSE, AND STATEMENT OFCHARGES

TO: Mr. Jason McCallum and Mr. Chad Buchanan, Co-OwnerMr. Justin McCallum, Co-Owners Save My Home USA Co., Inc.Save My Home USA Co., Inc. 1401 West Girard Avenue1401 West Girard Avenue Madison Heights, MI 48071Madison Heights, MI 48071

Save My Home USA Co., Inc. Save My Home USA Co., Inc.37040 Garfield 1441 East Maple Road, Suite 100Clinton Township, MI 48036 Warren, MI 48083

Save My Home USA Co., Inc. Save My Home USA Co., Inc.30800 Van Dyke Avenue, Suite 102 2663 Athena DriveWarren, MI 48093 Troy, MI 48083

Mr. Andrew Capelli, Registered AgentSave My Home USA Co., Inc.1401 West Girard AvenueMadison Heights, MI 48071

NOTICE OF HEARING

RESPONDENTS JASON MCCALLUM; JUSTIN MCCALLUM; CHAD

BUCHANAN; AND SAVE MY HOME USA CO., INC. ARE HEREBY NOTIFIED that the

Department of Commerce has initiated this action to determine whether Respondents have

committed the violations alleged below, subjecting the Respondents to disciplinary action.

ORDER FOR PREHEARING CONFERENCE

IT IS HEREBY ORDERED that a prehearing conference will be held on Friday, May 5,

2011 at 1:30 p.m. at the Office of Administrative Hearings, 600 North Robert Street, St. Paul,

Minnesota. The Chief Administrative Law Judge has assigned this matter to the Honorable

Manuel J. Cervantes, Administrative Law Judge. Judge Cervantes' telephone number is (651)

361-7945. AU mail sent to Judge Cervantes should be directed to P.O. Box 64620, St Paul,

MN 55164-0620.

ORDER TO SHOW CAUSE

IT IS ORDERED that Respondents must show cause why they should not be subject to

a civil penalty, as provided for in Minn. Stat. § 45.027, subd. 6 (2010) and why they should not

be barred from residential mortgage origination and residential servicing pursuant to

Minn. Stat. § 58.12, subd. l(a)(l) (2010).

ORDER FOR HEARING

IT IS FURTHER ORDERED that a hearing will occur at the Office of Administrative

Hearings, 600 North Robert Street in St. Paul, Minnesota, at a date and time to be determined at

the prehearing conference.

The hearing will be conducted under the contested case procedures set out in Chapters 14

and 45 of Minnesota Statutes (2010) and the Rules of the Office of Administrative Hearings,

Minnesota Rules Chapter 1400 (2009). A copy of these materials may be purchased from the

Minnesota Book Store, phone (651) 297-3000, or are available at www.revisor.leg.stafe.mn.us.

Copies of the rules are also available at www.oah.state.mn.us.

The attorney handling this case for the Department is Assistant Attorney General

Michael J. Tostengard, 1200 Bremer Tower, 445 Minnesota Street, St. Paul, Minnesota 55101-

2130, phone: (651)757-1314. Mr. Tostengard may be contacted to discuss discovery or

informal disposition of this matter.

STATEMENT OF CHARGES

ALLEGATIONS

1. Respondents are not licensed by the Department in any capacity. Respondents

Jason McCallum, Justin McCallum and Chad Buchanan are all owners and officers of

Respondent Save My Home USA Co., Inc. Respondents have been known to operate under the

following: Save My Home USA; Savemyhomeusa; and 2MM, LLC.

2. The Department conducted an investigation of Respondents and learned that

Respondents contacted approximately 118 Minnesota residents who paid advanced fees totaling

$289,020 for loan modification services.

3. On August 25, 2010, the Department sent an administrative subpoena to

Respondents at the four addresses noted above. No response was received. The telephone lines

used by Respondents have also been disconnected. It does not appear that the company is doing

any more business in Minnesota at this time.

4. As part of its loan modification program, the Respondents offered and advertised

a money back guarantee to its customers if the loan was not successfully modified. Upon

information and belief, of the customers who did not receive a loan modification, no one

received a refund despite the fact that many requested one. What follows is a table of 23

customers interviewed by the Department concerned the Respondents' business activities.

Customer

J.B.L.B.C.B.M. & L.B.J.B.A. & R.B.B.B.

Fee Paid to Received LoanSMH Modification

$2,995$2,995$2,100$2,10052,300$3,990

. S3 ,095

NNNNNNN

RefundRequested

YYYYYYY

RefundReceived

NNNNNNN

Customer

C.C,J.C.B.D.T.D.P.O.J.D.J.F.K.F.S. & M. J.M.G.A.G.M.G.T.H.D.H.L.G.J.S.

Fee Paid to Received LoanSMH Modification

$2,395$2,00052,200$2,395$2,000$1,000$1,895$3,990$2,995$2,995$1,500$2,500$2,500$2,000$2,095$2,995

NNYNNNNNNNNNNNNN

RefundRequested

YN.

N/AYYYYYYYYYYYYY

RefundReceived

NN

N/ANNNNNNNNNNNNN

Only one of the 23 customers listed above received a loan modification.

6. Numerous customers who paid an advance fee stated that prior to the completion

of their loan modification services, Respondents' phone lines were disconnected without notice.

7. The Respondents have been the subject of administrative actions in Michigan and

Maryland for unlicensed loan modification activities.

8. This Order is in the public interest.

VIOLATIONS

COUNT I

By engaging in unlicensed loan modification activities in at least 118 instances, the

Respondents repeatedly violated Minn. Stat. § 58.04, subds. 1 and 3 (2010).

COUNT II

By habitually failing to complete the tasks it was paid in advance to complete, the

Respondents repeatedly demonstrated untrustworthiness and incompetence in violation of Minn.

Stat. § 58.12, subd. l(b)(2)(v) (2010),

COUNT III

By advertising a money back guarantee yet routinely failing to provide refunds on

services not rendered despite written and oral requests, Respondents repeatedly demonstrated

untnistworthiness and incompetence and engaged in fraudulent, deceptive, coercive and

dishonest practices in violation of Minn. Stat. § 58.12, subd. l(b)(2)(iv)(v) (2010).

COUNT IV

By failing to disclose to each customer the percentage of customers who actually

received a loan modification during the 12-month period ending 10 business days before the date

of the contracts in question were signed or while charging advance fees, the Respondents

violated Minn. Stat. § 58.16, subd. 2(a)(6) (2010).

COUNTY

By failing to be responsive to questions, concerns, and inquiries made by its customers

who had paid advance fees and disconnecting its phone lines without notice, Respondents

demonstrated untrustworthiness and incompetence in violation of Minn. Stat. § 58.12,

subd. l(b)(2)(v) (2010).

COUNT VI

By charging and collecting a fee prior to folly performing each and every service the

Respondents were contracted to perform, the Respondents repeatedly violated

Minn. Stat. § 325N.04(1) (2010).

COUNT VII

By being subject to administrative actions in Maryland and Michigan, the Respondents

were subject to disciplinary action in other states in violation of Minn. Stat. §58.12,

subd. l(b)(2)(vii){2010).

ADDITIONAL NOTICE

1. Respondents' failure to appear at the prehearing conference or hearing 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 its proposed disciplinary action may be

upheld.

2. If any party has good cause for requesting a delay of the prehearing conference,

the request must be made in writing to the Administrative Law Judge at least five days before the

prehearing conference. A copy of the request must be served on the other party.

3. Any party intending to appear at the prehearing conference must file a Notice of

Appearance form and return it to the Administrative Law Judge within 20 days of the date of

service of the Statement of Charges. A copy must be served on the Department's attorney. A

Notice of Appearance form is attached.

4. At the hearing, all parties have the right to be represented by legal counsel, by

themselves, or by a person of their choice if not otherwise prohibited as the unauthorized practice

of law. The parties are entitled to the issuance of subpoenas to compel witnesses to attend the

hearing. The parties will have the opportunity to be heard orally, to present evidence and

cross-examine witnesses, and to submit evidence and argument. Ordinarily, the hearing is tape-

recorded. The parties may request that a court reporter record the testimony at their expense.

5. Persons attending the hearing should bring all evidence bearing on the case,

including any records or other documents. Be advised that if data that is not public is admitted

into the record, it may become public data unless an objection is made and relief is requested

under Minn. Stat. § 14.60, subd. 2 (2010).

6. Requests for subpoenas for the attendance of witnesses or the production of

documents at the hearing shall be made in writing to the Administrative Law Judge pursuant to

Minn. R. 400.7000 (2009). A copy of the subpoena request shall be served on the other parties.

A subpoena request form is available at www.oah.state.mn.us or by contacting the Office of

Administrative Hearings at (651) 361-7900.

7. This case may be appropriate for mediation. The parties are encouraged to

consider requesting the Chief Administrative Law Judge to assign a mediator so that mediation

can be scheduled promptly.

8. The Office of Administrative Hearings conducts contested case proceedings in

accordance with the Minnesota Rules of Professional Conduct and the Professionalism

Aspirations adopted by the Minnesota Supreme Court. A publication entitled A Guide to

Participating in Contested Case Proceedings at the Office of Administrative Hearings is

available at www.oah.state.mn.us or by contacting the Office of Administrative Hearings at (651)

361-7900.

9. Any party who needs an accommodation for a disability in order to participate in

this hearing process may request one. Examples of reasonable accommodations include

wheelchair accessibility, an interpreter, or Braille or large-print materials. If any party requires

an interpreter, including a foreign language interpreter, the administrative law judge must be

promptly notified. To arrange for an accommodation or an interpreter, contact the Office of

Administrative Hearings, Post Office Box 64620, St. Paul, Minnesota 55164-0620, or may call

(651) 361-7900 (voice) or (651) 361-7878 (TTY).

10. Pursuant to Minn. Stat. § 45.027, subd. 6 (2010), Respondents may be subject to a

civil penalty not to exceed $10,000 per violation upon a final determination that Respondents

violated any law, rule or order.

Dated:

1IKEROTHMANCommissionerMinnesota Department of Commerce85 Seventh Place East, Suite 500St. Paul, MN 55101Telephone: (651)296-4026

MO14643/MPB OAH Docket No. 16-1005-23890-2

STATE OF MINNESOTAOFFICE OF ADMINISTRATIVE HEARINGSFOR THE DEPARTMENT OF COMMERCE

In the Matter of Jason McCallum; Justin NOTICE OF APPEARANCEMcCallum; Chad Buchanan; and Save MyHome USA Co., Inc.

Date: Friday, May 5, 2011 Time: 1:30 p.m.

TO: Honorable Manuel J. Cervantes, Administrative Law Judge, Office of AdministrativeHearings, Post Office Box 64620, St. Paul, Minnesota 55164-0620

PLEASE TAKE NOTICE that the party named below will appear at the prehearing conferencein this matter:

Minnesota Department of Commerce85 East 7th Place, Suite 600

St. Paul, MN 55101(651)296-4026

PLEASE TAKE FURTHER NOTICE that the attorney named below will appear on behalf ofthe Department of Commerce:

Michael J. TostengardAssistant Attorney GeneralAttorney Reg. No. 204973

445 Minnesota Street, Suite 1200St. Paul, MN 55101-2130

(651)757-1314 -

Dated: 1?/'MICHAEL J. TOSTENGARD

MO14643/MPB OAH Docket No. 16-1005-21890-2

STATE OF MINNESOTAOFFICE OF ADMINISTRATIVE HEARINGSFOR THE DEPARTMENT OF COMMERCE

In the Matter of Jason McCallum; Justin NOTICE OF APPEARANCEMcCallvun; Chad Buchanan; and Save MyHome USA Co., Inc.

Date: Friday, May 5, 2011 Time: 1:30 p.m.

TO: Honorable Manuel J. Cervantes, Administrative Law Judge, Office of AdministrativeHearings, Post Office Box 64620, St. Paul, Minnesota 55164-0620

PLEASE TAKE NOTICE that the party named below will appear at the prehearing conferencein this matter:

Name, Address, and Phone Number of Party:

Party's Attorney, Office Address and Phone Number:

Dated:

Signature of Party/ Attorney

NOTICE: This Notice must be served upon the attorney for the agency and any other known party. After anattorney has filed a notice of appearance, withdrawal is effective only if a notice of withdrawal is promptlyserved on all parties and filed with the judge. The notice of withdrawal must include the address and phonenumber of the party. Withdrawal of counsel does not create any right to a continuance. Minn. R. 1400.5700.

AG:«7720!3-vl

10

AFFIDAVIT OF SERVICE BY U.S. MAIL

Re: In the Matter of Jason McCallum; Justin McCallum; Chad Buchanan; and Save My Home USACo., Inc., OAHDocket No. 16-1005-21890-2

STATE OF MINNESOTA

COUNTY OF RAMSEY

))ss.)

JEAN-ANNE GATES, being first duly sworn, deposes and says:

That at the City of St. Paul, County of Ramsey and State of Minnesota, on this 9th day of March,

2011, she caused to be served the Notice of and Order for Hearing, Order for Prehearing Conference,

Order to Show Cause, and Statement of Charges, by depositing the same in the United States mail at said

city and state, true and correct copy thereof, properly enveloped with prepaid first class postage, and

addressed to:

Mr. Jason McCallum, Co-OwnersSave My Home USA Co., Inc.1401 West Girard AvenueMadison Heights, MI 48071

Mr. Chad Buchanan, Co-OwnerSave My Home USA Co., Inc.1401 West Girard AvenueMadison Heights, MI 48071

Save My Home USA Co., Inc.1441 East Maple Road, Suite 100Warren, MI 48083

Save My Home USA Co., Inc.2663 Athena DriveTroy, Ml 48083

Subscribed and sworn to before me thisc.

day of //Ul'V^^- .2011.

JILL R KLAUSINGNOTARY PUBLIC MINNESOTA

MY COMMISSIONEXPIRES JAN. 31. 2015

Mr. Justin McCallum, Co-OwnersSave My Home USA Co., Inc.1401 West Girard AvenueMadison Heights, MI 48071

Save My Home USA Co., Inc.37040 GarfieldClinton Township, MI 48036

Save My Home USA Co., Inc.30800 Van Dyke Avenue, Suite 102Warren, MI 48093

Mr. Andrew Capelli, Registered AgentSave My Home USA Co., Inc.1401 West Girard AvenueMadison Heights, MI 48071