COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
MORTGAGE BROKER LICENSING
Docket No. 2006-021-CO
In the Matter of
FINTERA CAPITAL CORPORATION
Mortgage Broker License Nos. MB3512; MB3803 and MB4399
This CONSENT ORDER, dated December 6, 2006, is by and between the Division of Banks, through the Commissioner (the "Division")and Fintera Capital Corporation, d/b/a House Funding ("Fintera"):
WHEREAS on or about September 8, 2006 the Division issued Findings of Fact and Temporary Order to Cease and Desist against Fintera (the "Order").
WHEREAS Fintera disputes the Findings of Fact and Conclusions of Law in the Order and has requested a hearing pursuant to M.G.L. c. 30A (the "Dispute").
WHEREAS, Fintera hereby represents and certifies that on the 6th day of December 2006, the Board of Directors of Fintera, at a duly constituted meeting, adopted resolutions authorizing David Burg, on behalf of Fintera as its duly authorized officer, to enter into this Consent Order in the form submitted to Fintera on this date.
WHEREAS the parties desire a consensual resolution to the Order and Dispute along the terms and conditions set forth below.
The parties stipulate and agree as follows:
- On or about July 27, 2004, the Division issued license number MB3512 to Fintera permitting it to engage in the business of a mortgage broker. The Division issued the license for Fintera's office located at 209 West Canal Street in Natick, Massachusetts (the "Natick Office"). On or about February 11, 2005 the Division issued license number MB3803 to Fintera to engage in the mortgage brokerage business at its office located at 3372 Woods Edge Circle in Bonita Springs, Florida (the "Bonita Springs Office"). On or about May 18, 2006, the Division issued license number MB4399 to Fintera to engage in the business of a mortgage broker at One Market Street in Lynn, Massachusetts (the "Lynn Office").
- On August 30, 2006, the Division conducted an on-site inspection in the Lynn Office.
- During the on-site inspection, the Division's examiners requested and obtained from Fintera a copy of underwriting guidelines governing stated income loan products of the mortgage lender through whom Fintera placed the stated income loans under review.
- The mortgage lender's underwriting guidelines provide a series of factors that are to be taken into account when determining whether the borrower' stated income as reported on the loan application is reasonable. The factors include the age and education of the borrower, work experience, annual income, assets and liabilities, prior income and employment.
- To assess an applicant's annual income, the underwriting guidelines permit the broker to use the website, www.salary.com, as a reference tool in certain circumstances to validate whether income stated is reasonable. The underwriting guidelines, through www.salary.com, provide an instrument to evaluate the reasonableness of the annual salary reported on the 1003 Form, but are not intended to be used to establish the amount that is reported as the applicant's annual income..
- Fintera acknowledges that it learned after the Division's inspection that its brokers in the Lynn Office inappropriately used www.salary.com in completing loan applications on several occasions.
- Fintera believed it had provided sufficient training to its broker in the Lynn Office and that it had sufficient supervisory procedures in place to prevent its brokers from misapplication of tools like www.salary.com. It now acknowledges that it did not have sufficient supervisory procedures in place to prevent its loan officer from misapplication of such tools with respect to stated income loans.
- Fintera shall surrender its three licenses referred to in paragraph 1 hereto immediately upon execution of this Consent Order.
- This Consent Order shall become effective immediately upon the date of its issuance.
- The provisions of this Consent Order shall be binding upon Fintera, its officers, directors, employees, successors and assigns, and those persons in active participation with it, directly or indirectly, acting individually or through any corporate or other entity.
- Fintera hereby waives, solely for purposes for settling this proceeding:
- A hearing under General Laws chapter 255E, section 7(a), for the purpose of taking evidence;
- A written decision of the Commissioner;
- Exceptions and briefs with respect to such written decision; and
- Review of this Consent Order pursuant to Massachusetts General Laws chapter 30A.
- This Consent Order contains the complete agreement between the parties for the purpose of resolving this matter. There are no other agreements, promises, representations, or warranties between the Division and Fintera.
Dated this 6th day of December, 2006.
The Division of Banks
Commonwealth of Massachusetts
By: Steven L. Antonakes
Commissioner of Banks
Commonwealth of Massachusetts
Fintera Capital Corporation
d/b/a House Funding
By: David Burg