By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER AND MORTGAGE BROKER LICENSING
No. 2006-003

CONSENT ORDER


In the Matter of

CENTURION FUNDING CORP. OF AMERICA
Avon, Massachusetts

Mortgage Lender and Mortgage Broker License No. MC0124 and MC4169


On March 8, 2004, the Commissioner of Banks ("Commissioner") issued a CONSENT ORDER, Docket No. 2003-013 ("ORDER"), against Centurion Funding Corp. of America, Avon, Massachusetts ("Centurion Funding" or the "Corporation"), a licensed mortgage lender and mortgage broker under Massachusetts General Laws chapter 255E, section 2 that became effective upon issuance, and remains in full force and effect.

WHEREAS, subsequent to the issuance of the ORDER, the Division conducted an examination/inspection of Centurion Funding as of August 11, 2005 which illustrated further non-compliance with applicable Massachusetts statutes and the Division of Banks ("Division") regulations governing the conduct of those engaged in the business of a mortgage lender and a mortgage broker in the Commonwealth.

WHEREAS, Centurion Funding, having been advised of its right to Notice and Hearing pursuant to General Laws chapter 255E, section 7(a), and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER ("CONSENT AGREEMENT") with representatives of the Division dated October 23, 2006, whereby, solely for the purpose of settling this matter, and without admitting any allegations or implications of fact or the existence of any violation of state or federal laws and regulations governing the conduct and operation of a mortgage lender and/or a mortgage broker, Centurion Funding agrees to the issuance of this MODIFICATION OF CONSENT ORDER by the Commissioner.

WHEREAS, the Division has considered the matters addressed by the Report of Examination/Inspection (the "Report") issued pursuant to the Division's examination/inspection of Centurion Funding as of August 11, 2005 and believes that sufficient cause exists to modify the ORDER issued on March 8, 2004 to more adequately address the condition of the Corporation. The Division, therefore, accepts the CONSENT AGREEMENT and hereby issues the following:

MODIFICATION OF CONSENT ORDER

A. The ORDER is modified so that Section 1 is deleted and replaced with the following Section 1:

1. Centurion Funding shall immediately take all necessary steps to review and revise the Corporation's policies and procedures to ensure that any loan fees, mortgage broker fees, application fees, processing fees, or similar fees collected as compensation for administrative costs incurred in originating the mortgage loan, are not charged to consumers except to the extent that such fees or points have been properly disclosed to the consumer, in writing, prior to the closing of the mortgage loan in accordance with Massachusetts General Laws chapter 183, section 63

(a) Within thirty (30) days of Centurion Funding's receipt of the Report, the Corporation shall reimburse the consumers identified in the Report for the amount collected as a processing and application fee at settlement that had not been disclosed to the consumers, in writing, prior to loan closing. The amount of such reimbursement shall equal the difference between the actual charges assessed to the consumers and the amount disclosed in writing for such fees prior to loan closing; and

(b) With the Corporation's written response to the findings presented in the Report, Centurion Funding shall submit evidence of the reimbursement issued to the consumers pursuant to Section 1(a) of this ORDER, including the consumers' names, the date the loan closed, check number, and the amount of the reimbursement.

B. The ORDER is modified so that Section 2 is deleted and replaced with the following Section 2:

2. Centurion Funding shall immediately take all necessary steps to review and revise the Corporation's policies and procedures to ensure that, when acting in the capacity of a mortgage broker in a mortgage loan transaction, the Corporation does not charge the consumer an underwriting fee or collect any other compensation from consumers (i) in consideration of services which the Corporation, as a mortgage broker, is prohibited from performing in a mortgage loan transaction or (ii) where no, or only a nominal, service is provided by the Corporation.

(a) Within thirty (30) days of Centurion Funding's receipt of the Report, the Corporation shall reimburse the consumers identified in the Report under the heading "Unearned Fees" for the amounts collected as a "underwriting fees;" and

(b) With the Corporation's written response to the findings presented in the Report, Centurion Funding shall submit evidence of the reimbursement issued to the consumers pursuant to Section 2(a) of this ORDER, including the consumers' names, the dates the loans closed, check numbers, and the amount of the reimbursements.

C. The ORDER is modified so that Section 3 is deleted and replaced with the following Section 3:

3. Centurion Funding shall immediately cease soliciting or accepting residential mortgage loan applications for property located in Massachusetts from any unlicensed individual or entity engaging in the activity of a mortgage broker, who is not employed by the Corporation or who otherwise fails to qualify for exemption from licensure under the provisions of General Laws chapter 255E, section 2.

D. The ORDER is modified so that Section 4 is deleted and replaced with the following Section 4:

4. Centurion Funding shall immediately cease engaging directly or indirectly in the business of a mortgage broker or mortgage lender in any residential mortgage loan transaction, as those terms are defined under Massachusetts General Laws chapter 255E, section 1, from any location, whether within or without the Commonwealth, without first obtaining a license from the Commissioner for such location in accordance with Massachusetts General Laws chapter 255E, section 2 and applicable published Division Opinions interpreting said statute.

(a) Centurion Funding shall submit a payment of twenty five thousand dollars ($25,000.00) in satisfaction of an administrative penalty collected in consideration of the Corporation's engaging in the business of a mortgage broker or mortgage lender at Main Street, Bridgewater, Massachusetts, without a license from the Commissioner to conduct business at such location during the relevant period. The administrative penalty shall be satisfied as follows:

(i) Five thousand dollars ($5,000.00) shall be due and payable immediately upon execution of this ORDER; and

(ii) A payment of five thousand dollars ($5,000.00) shall be due and payable upon the last day of each month following the effective date of this ORDER, beginning with November 30, 2006, until the administrative penalty set forth in Section 4(a) is satisfied in full.

(b) Centurion Funding shall remit payment(s) pursuant to Sections (4)(a)(i) and (4)(a)(ii) of this ORDER for the amount then due, payable to the "Commonwealth of Massachusetts," to the Office of the Commissioner of Banks, One South Station, 3 rd Floor, Boston, Massachusetts 02110. The Division shall remit the payment for deposit into the General Fund of the Commonwealth.

E. The ORDER is modified so that Section 5(a) is deleted and replaced with the following Section 5(a):

(a) Centurion Funding shall implement and maintain internal controls and procedures to ensure that financial reporting is reliable and that reporting procedures are established and implemented in a manner which will permit the Corporation to produce credible and current interim financial statements within a reasonable time period following a request for such statements.

F. The ORDER is modified so that the phrase "Section 7" in Section 5(b) is deleted and replaced with the phrase "Section 9."

G. The ORDER is modified so that the phrase "as of September 30, 2003" in Section 5(b) is deleted.

H. The ORDER is modified so that Section 6 is deleted and replaced with the following Section 6:

6. Centurion Funding shall immediately revise its procedures to ensure compliance with the records retention provisions of 209 CMR 42.09 and 209 CMR 48.00 and retain its books and records in a manner which will demonstrate the Corporation's compliance with the timing requirements of applicable disclosures, including but not limited to, the Attorney General's Mortgage Broker disclosure under the Attorney General's regulation 940 CMR 8.05(5), the Loan Origination and Compensation Agreement under the Division's regulation 209 CMR 42.12A(5), and the Good Faith Estimate under the Real Estate Settlement Procedures Act (RESPA) implementing regulation 24 CFR 3500.7. The procedures implemented to address this Section of the ORDER shall necessarily require that Centurion Funding retain a copy of all correspondence documenting the loan outcome for each loan application.

I. The ORDER is modified so that Section 7 is deleted and replaced with the following Section 7.

7. Centurion Funding shall immediately revise its advertising materials and procedures to ensure that all advertisements, as that term is defined under the Division's regulation 209 CMR 32.02, that contain the triggering language referenced in the Attorney General's regulation 940 CMR 8.04(4) include the required disclosures in compliance with the regulation. Centurion Funding shall further review and revise all advertisements to include the additional disclosures required under the Division's regulations 209 CMR 32.24(3), as applicable. The revisions to the Corporation's advertising materials and procedures implemented in response to this Paragraph of the ORDER shall further ensure that the Corporation refrains from advertising a "no point" mortgage loan when points are required or accepted by the lender as a condition for commitment or closing.

J. The ORDER is modified so that Section 8 is deleted and replaced with the following Section 8:

8. The Corporation shall comply with all laws and regulations applicable to its conducting the business of a mortgage broker and mortgage lender, including, but not limited to, Massachusetts General Laws chapter 255E, and the Division's regulation 209 CMR 42.00 et seq. Such obligations shall necessarily include the duty to address and correct, within thirty (30) days of receipt of the Report, all violations and areas of concern as specified in such Report issued pursuant to the Division's examination/inspection of Centurion Funding as of August 11, 2005.

(a) Within thirty (30) days of the Corporation's receipt of the Report, Centurion Funding shall submit to the Commissioner a written response that addresses each of the violations specified in the Report. The written response shall describe the revised policies and procedures adopted by Centurion Funding to implement all corrective actions set forth in: (i) the "Examiner's Comments and Conclusions" section of the Report and (ii) the provisions of this ORDER;

(b) Centurion Funding shall establish, implement, and maintain quality control standards which provide for a loan review process to assess the Corporation's compliance with: (i) the statutes, rules, regulations, regulatory bulletins, and other relevant provisions of law applicable to those engaged in the business of a mortgage broker and mortgage lender in Massachusetts and (ii) the provisions of this ORDER. Such quality control standards shall be designed to prevent the recurrence of the violations and areas of concern addressed in the Report; and

(c) Centurion Funding shall establish, implement, and maintain procedures and policies to ensure that all applicable staff persons receive adequate instruction and ongoing, periodic training to ensure proper implementation and execution of the revised practices and procedures implemented pursuant to this ORDER.

K. The ORDER is modified by designating and incorporating the provisions of Sections 9 through 14 of the ORDER, in their entirety, as Sections 10 through 15 respectively.

L. The ORDER is modified by designating and inserting the following paragraph as Section 9:

9. On the thirtieth (30 th) day after the end of each calendar quarter following the date of this ORDER, beginning with the calendar quarter ending June 30, 2006, Centurion Funding shall furnish written progress reports to the Division, which shall address and include the following:

(a) A description of the form, content, and manner of any actions taken to address each Section of this ORDER and the results thereof; and

(b) Written findings prepared by the Corporation detailing a review of management's and staff's adherence to the policies, programs, and procedures adopted pursuant to this ORDER and to applicable statutes, regulations, and rules, as well as a description of any operational changes implemented during such quarter which are intended to improve Centurion Funding's compliance condition in Massachusetts and the results thereof.

This MODIFICATION ORDER shall become effective immediately upon the date of its issuance.

The provisions of this MODIFICATION ORDER shall be binding upon Centurion Funding and its officers and directors and their successors or assigns.

Except as amended herein, the provisions of the ORDER shall remain in full force and effect.

The provisions of this MODIFICATION ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this MODIFICATION ORDER shall have been modified, terminated, suspended, or set aside by the Commissioner or upon an order of a court of competent jurisdiction.

By DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 23th day of October 2006.

Steven L. Antonakes
Commissioner of Banks
Commonwealth of Massachusetts