By the Division of Banks

Cease And Desist Order

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE BROKER LICENSING
Docket No. 2004-021

FINDINGS OF FACT AND TEMPORARY ORDER TO CEASE AND DESIST


In the Matter of

MICHAEL KIM
d/b/a 123goloan.com
Burlington, Massachusetts

Mortgage Broker License No. MB2011


The Commissioner of Banks ("Commissioner") having determined that MICHAEL KIM, d/b/a 123goloan.com ("Michael Kim" or the "Sole Proprietor"), located at 2 Hallmark Gardens, Unit 6, Burlington, Massachusetts 01803 has engaged, or is engaged in, or is about to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 255E, and applicable regulations found at 209 CMR 42.00 et seq., hereby issues the following FINDINGS OF FACT AND TEMPORARY ORDER TO CEASE AND DESIST ("TEMPORARY ORDER") pursuant to General Laws chapter 255E, section 7(b).

FINDINGS OF FACT

  1. The Division of Banks ("Division"), through the Commissioner, has jurisdiction over the licensing and regulation of persons and entities engaged in the business of a mortgage broker in Massachusetts pursuant to Massachusetts General Laws chapter 255E, section 2.

  2. Michael Kim is, and at all relevant times, has been a sole proprietor doing business in the Commonwealth of Massachusetts. Michael Kim is licensed by the Commissioner as a mortgage broker as required by Massachusetts General Laws chapter 255E, section 2. The Commissioner issued Michael Kim's initial license to engage in the business of a mortgage broker at 681 Main Street, Waltham, Massachusetts 02451 on October 5, 2000, according to records maintained on file with the Division.

  3. Through the submission of completed mortgage broker license renewal applications by Michael Kim and the resultant review and approval by the Commissioner, Michael Kim's mortgage broker license, number MB2011, renewed annually between June 2001 and June 2003.

  4. On or about December 15, 2003, the Division received written notification from Michael Kim indicating his intent to relocate the licensed mortgage broker business to 2 Hallmark Gardens, Unit #6, Burlington, Massachusetts 01803. According to the written notification, the relocation was to be effective immediately and completed by January 2, 2004. Enclosed with the written notification was Michael Kim's original mortgage broker license certificate which had previously been renewed by the Commissioner on June 4, 2003 for the period ending May 31, 2004.

  5. On or about January 29, 2004, the Commissioner issued an amended mortgage broker license certificate to Michael Kim which reflected Michael Kim's new licensed location at 2 Hallmark Gardens, Unit #6, Burlington, Massachusetts 01803. The new address appeared above the Commissioner's signature on the lower right quarter of the license certificate. A copy of the amended mortgage broker license certificate is attached as Exhibit A.

  6. Massachusetts General Laws chapter 255E, section 5 states, in part, that, "Such license shall not be transferrable or assignable and shall expire annually on June first."

  7. On March 26, 2004, Michael Kim submitted to the Division a License Renewal Application (the "Renewal Application") to renew his Massachusetts mortgage broker license, number MB2011, for the period ending May 31, 2005.

  8. On June 1, 2004, Michael Kim's mortgage broker license, number MB2011, was set to expire in accordance with the provisions of Massachusetts General Laws chapter 255E, section 5.

  9. On July 1, 2004, an informal conference, attended by Michael Kim and certain members of the Division's staff, was held at the Division's office located at One South Station, 3 rd Floor, Boston, Massachusetts 02110. The informal conference was held by the Division to address certain matters which were of significant concern to the Division and which were preventing a determination on the Renewal Application. The Division's concerns originated from a complaint that was filed with the Division against Michael Kim on or about March 13, 2004.

  10. As of the effective date of this TEMPORARY ORDER, the Commissioner had neither approved nor denied the Renewal Application and, therefore, had not issued a mortgage broker license to Michael Kim for the period ending May 31, 2005.

  11. Massachusetts General Laws chapter 30A, section 13 states, in part, that, "If a licensee has, in accordance with any law and with agency regulations, made timely and sufficient application for a renewal, his license shall not expire until his application has been finally determined by the agency."

  12. On July 20, 2004, the Division received a written request from a licensed Massachusetts mortgage lender (the "Mortgage Lender") in which the Mortgage Lender sought to confirm the status of Michael Kim as a licensed mortgage broker in Massachusetts and to determine the authenticity of an enclosed copy of a mortgage broker license certificate that had been presented to the Mortgage Lender. A copy of the mortgage broker license certificate presented to the Mortgage Lender is attached hereto as Exhibit B (the ""Presented License").

  13. On July 20, 2004, by a separate letter to the Division [inaccurately dated as of February 13, 2004], the Mortgage Lender informed the Division that the Mortgage Lender's standard business practice is to request that all mortgage brokers and correspondents conducting business with the Mortgage Lender provide proof that such party possesses a current mortgage broker license. The Mortgage Lender further informed the Division by such letter that in response to this request for proof of his current licensing status in Massachusetts, Michael Kim provided the Mortgage Lender with the Presented License.

  14. Prior to July 20, 2004, the Presented License was not contained in the Division's records and files maintained for Michael Kim.

  15. The Presented License contains certain indicia which permits the Commissioner to find with certainty that the Presented License was neither printed nor issued by the Division. These indicia, which are inconsistent with the standard format used by the Division, include, but are not necessarily limited to, the following:

    1. An issuance date listed as May 28, 2004. As indicated in Section 10 of this TEMPORARY ORDER, the Commissioner had neither approved nor denied the Renewal Application and, therefore, had not issued a mortgage broker license to Michael Kim for the period ending May 31, 2005;

    2. The word processing font used to complete the Presented License. The Division's standard practice is to complete all mortgage broker and mortgage lender license certificates using a standard font commonly identified as 'Arial.' The Presented License is completed using an unidentified font which is not the 'Arial' font used by the Division;

    3. The licensed address appearing on the Presented License. As indicated in Section 5 of this TEMPORARY ORDER, the Commissioner issued an amended mortgage broker license certificate on January 29, 2004 to reflect the change in the licensed location maintained by Michael Kim. The updated licensed location appeared on the lower quarter of the license certificate. As of the effective date of this TEMPORARY ORDER, the Commissioner has never issued a mortgage broker license certificate to Michael Kim in which the 2 Hallmark Gardens, Unit #6, Burlington, Massachusetts 01803 location appeared in the space routinely reserved on the license certificate for identifying the licensed location. The Presented License includes the 2 Hallmark Gardens, Unit #6, Burlington, Massachusetts 01803 location in such space routinely reserved on the license certificate for identifying the licensed location;

    4. The expiration date appearing on the Presented License. The Division's standard practice is to include the license expiration date in a larger font size than that used to complete other information on the license certificate. The font size and spacing of the license expiration date appearing on the Presented License suggest that the Presented License was not completed by the Division; and

    5. The signatures of the Commissioner(s) appearing on the Presented License. Thomas J. Curry completed his service to the Division in the capacity of Commissioner on or about December 30, 2003. While any license certificate amended between December 30, 2003 and the end of the relevant licensing period on May 31, 2004 would continue to reflect the signature of former Commissioner Thomas J. Curry, any original mortgage broker license certificate issued for the period ending May 31, 2005 would include the signature of the current Commissioner of Banks, Steven L. Antonakes, exclusively. The Presented License, purported to have been issued by the Commissioner on May 28, 2004 for the period ending May 31, 2005, contains a copy of former Commissioner Thomas J. Curry's signature.

    CONCLUSIONS OF LAW

  16. Based upon the information contained in paragraphs 1 through 15, Michael Kim has conducted business as a mortgage broker in Massachusetts with a license that was not obtained from the Commissioner in violation of Massachusetts General Laws chapter 255E, section 2.

  17. Based upon the information contained in paragraphs 1 through 15, Michael Kim has violated Massachusetts General Laws chapter 255E, section 4 by infringing upon the exclusive authority of the Commissioner to issue a license to engage in the business of a mortgage broker in Massachusetts.

  18. Based upon the information contained in paragraphs 1 through 15, Michael Kim has engaged in conduct which may violate Massachusetts General Laws chapter 267, section 1 by falsely making, altering, or forging a public record with the intent to defraud the Mortgage Lender.

  19. Based upon the information contained in paragraphs 1 through 15, Michael Kim has engaged in conduct which may violate Massachusetts General Laws chapter 267, section 5 by uttering and publishing as true a false, altered, or forged mortgage broker license certificate which Michael Kim knew to be false, altered, or forged with the intent to defraud the Mortgage Lender.

  20. Based upon the information contained in paragraphs 1 through 15, Michael Kim has engaged in conduct which may violate Massachusetts General Laws chapter 264, section 5 by using a representation of the great seal of the Commonwealth of Massachusetts, without approval from the Commissioner, for a commercial purpose in the conduct of his mortgage broker business.

  21. Based upon the information contained in paragraphs 1 through 15, Michael Kim has engaged in conduct which may violate Massachusetts General Laws chapter 93A, section 2(a) by engaging in the unfair or deceptive act or practice of falsely making, altering, or forging a public record to represent or imply that, as of May 28, 2004, the Commissioner had issued a mortgage broker license certificate to Michael Kim to engage in the business of a mortgage broker for the period ending May 31, 2005.

  22. Based upon the information contained in paragraphs 1 through 15, the Commissioner has determined that:

    1. Michael Kim has engaged, or is about to engage in, acts or practices which warrant the belief that he is not operating honestly, fairly, soundly and efficiently in the public interest in violation of standards governing the licensing and conduct of a mortgage broker including, but not limited to, the provisions of Massachusetts General Laws chapter 255E, section 4 and the Division's regulations at 209 CMR 42.00 et seq.; and

    2. The public interest will be irreparably harmed by delay in issuing an ORDER TO CEASE AND DESIST to Michael Kim.

  23. Based upon the information contained in paragraphs 1 through 15, had the facts and conditions found therein existed at the time of Michael Kim's original mortgage broker license application, the Commissioner would have been warranted in refusing to issue such license.

    ORDER TO CEASE AND DESIST

    After taking into consideration the FINDINGS OF FACT and CONCLUSIONS OF LAW stated herein, it is hereby:

  24. ORDERED that Michael Kim, and any and all employees, independent contractors, or agents operating on behalf of Michael Kim's sole proprietorship, and their successors or assigns, shall immediately cease engaging in the activities of a mortgage broker, as defined under Massachusetts General Laws chapter 255E, section 1, relative to any residential property in Massachusetts, not otherwise expressly permitted by the terms of this TEMPORARY ORDER. Therefore, Michael Kim is ordered to immediately cease soliciting or accepting, either directly or indirectly, any residential mortgage loan applications from consumers for residential property located in Massachusetts.

  25. IT IS FURTHER ORDERED that Michael Kim shall immediately place any fees previously collected from Massachusetts consumers relative to any pending mortgage loan applications in a separate escrow account maintained at a federally insured bank.

  26. IT IS FURTHER ORDERED that Michael Kim shall place his entire open application list to a qualified lender with no loss to applicants. The open application list to be placed with a qualified lender shall include all transactions in which Michael Kim was performing in the capacity of a mortgage broker. Michael Kim shall obtain the prior approval of the Commissioner before placing such applications to the qualified lender.

  27. IT IS FURTHER ORDERED that Michael Kim shall submit to the Commissioner a detailed record of all of his pending residential mortgage loan applications on property located in Massachusetts. The records to be produced shall be submitted to the Commissioner within five (5) days of the effective date of this TEMPORARY ORDER and shall include all information on file, regarding Michael Kim's open application list, including but not necessarily limited to, the following:

    The names of all individuals from whom Michael Kim has accepted an application for a residential mortgage loan; the applicants' addresses and telephone numbers; the amount of all prepaid loan fees submitted by the customer; the amount of each loan; application status (i.e. filed, submitted to lenders, cleared to close, etc.); scheduled closing dates; and a list identifying the applicable lender with whom the applicants' application was placed. The latter list should include telephone numbers of contact persons familiar with Michael Kim's submitted loans.

  28. IT IS FURTHER ORDERED that Michael Kim shall immediately secure all pending mortgage loan application files and, to the extent that any original documents must be forwarded to the relevant mortgage lender pursuant to Section 26 of this TEMPORARY ORDER, a copy of such document, correspondence, or paper relating to the mortgage loan shall be retained in Michael Kim's books and records and shall be available to the Commissioner, in their entirety, upon request.

  29. IT IS FURTHER ORDERED that this TEMPORARY ORDER shall become effective immediately and shall remain in effect unless set aside, limited, or suspended by the Commissioner or upon court order after review under Massachusetts General Laws chapter 30A.

  30. IT IS FURTHER ORDERED that a hearing will be scheduled on this matter to determine whether or not such TEMPORARY ORDER shall become permanent and final only upon receipt of a written request for such a hearing from Michael Kim within twenty (20) days of the effective date of this TEMPORARY ORDER. If no hearing is requested within this twenty (20) day period, this TEMPORARY ORDER shall become permanent and final until it is modified or vacated by the Commissioner.

By ORDER AND direction of the Commissioner of Banks.

Dated at Boston, Massachusetts, this 28th day of July, 2004.

By: Steven L. Antonakes
Commissioner of Banks
Commonwealth of Massachusetts