By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER AND
MORTGAGE BROKER
LICENSING
Docket No. 2007-027

CONSENT ORDER


In the Matter of
CONSUMER HOME MORTGAGE
CORPORATION OF AMERICA

Quincy, Massachusetts

Mortgage Company License Nos. MC1926 et al.


WHEREAS Consumer Home Mortgage Corporation of America ("Consumer Home Mortgage" or the "Corporation") with its main business office located at 60 McGrath Highway, Quincy, Massachusetts, has 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 of Banks ("Division") dated October 25, 2007 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 mortgage broker, Consumer Home Mortgage agrees to the issuance of this CONSENT ORDER ("ORDER") by the Commissioner of Banks ("Commissioner");

WHEREAS an informal conference was held on September 25, 2007 to discuss matters related to solicitations (the "solicitation(s)") received by Massachusetts consumers from Consumer Home Mortgage which reference the terms of the consumer's current mortgage loan, obtained from another lender identified as "subprime lender" in the solicitation. The solicitation also contains language that infers that the consumer must take prompt action in order to avoid the negative consequences associated with the risks of the current loan. A copy of the solicitation is attached as Exhibit 1 pdf format of Exhibit1_Consumer_Home_Mortgage.pdf
.

WHEREAS during the informal conference, Brian Spillane, President of Consumer Home Mortgage stated that he understood the Division's concerns that the solicitation has the tendency or capacity to be misleading.

WHEREAS Mr. Spillane indicated that Consumer Home Mortgage will not distribute the same or similar solicitations in the future.

The Commissioner, therefore, accepts the CONSENT AGREEMENT and issues the following:

ORDER

NOW COME the parties in the above-captioned matter, the Division and Consumer Home Mortgage, and stipulate and agree as follows:

  1. Consumer Home Mortgage shall revise its advertising practices and procedures to ensure that all solicitations and advertising materials used by the Corporation do not contain any representations or statements that could be considered false, misleading, or have the tendency or capacity to be misleading.
    1. Consumer Home Mortgage shall take all necessary steps to ensure that the same or similar solicitation is not published or distributed to consumers in Massachusetts;
    2. Consumer Home Mortgage shall implement, establish and maintain a system of internal controls to monitor the Corporation's compliance with the laws and regulations applicable to advertising practices including, but not limited to Massachusetts General Laws chapter 167, section 37; Massachusetts General Laws chapter 140D, the Division's regulations 209 CMR 32.00 et seq. and 209 CMR 42.12A; and the Office of the Attorney General's regulation 940 CMR 8.04;
    3. Consumer Home Mortgage shall establish, implement and maintain policies and procedures to ensure that all advertisements are thoroughly reviewed by senior management prior to publication or distribution to consumers. Such procedures shall include a review of the criteria utilized to generate mailing lists to ensure that targeted solicitations are appropriate for the consumers to whom such solicitations are distributed;
    4. Consumer Home Mortgage shall review and revise, as necessary, the Corporation's policies and procedures to ensure that individuals performing on behalf of the Corporation neither act, nor represent themselves, as a branch manager, principal, or in any other capacity with the Corporation which requires the Division's approval without the prior review and approval of the Division to act in such capacity; and
    5. While this ORDER is in effect, a copy of each advertisement used by the Consumer Home Mortgage during the relevant period shall be retained in the Corporation's books and records and shall be made available to the Division at the next examination/inspection of the Consumer Home Mortgage.
  2. Consumer Home Mortgage shall issue a written clarification notice to all consumers to whom a copy of the solicitation referenced in the preamble of this ORDER was issued. Such notice shall make reference to the solicitation and include, but not be limited to, the following information:
    1. The means by which Consumer Home Mortgage obtained the consumer's address and loan information;
    2. Notification that Consumer Home Mortgage is not affiliated with the consumer's current mortgage lender or servicer;
    3. Clarification that Consumer Home Mortgage does not have detailed knowledge of the consumer's loan terms; and
    4. Clarification that Consumer Home Mortgage had insufficient information to identify the borrower's lending institution as a "subprime institution."
  3. Prior to distributing the written notice referenced in Paragraph 2 of this ORDER, Consumer Home Mortgage shall submit the draft notice to the Division for review and approval. Such draft notice shall be submitted to the Division within seven (7) days of the effective date of this ORDER.
  4. Consumer Home Mortgage agrees to submit a payment of five thousand dollars ($5,000.00) in satisfaction of an administrative penalty collected in consideration of Consumer Home Mortgage's distribution of the solicitation referenced in the preamble of this ORDER. The administrative penalty shall be satisfied as follows:
    1. One thousand, two hundred and fifty dollars ($1,250.00) shall be due and payable immediately upon the execution of this ORDER;
    2. A payment of one thousand, two hundred and fifty dollars (1,250.00) shall be due and payable upon the last day of each calendar quarter following the effective date of this ORDER, beginning with the calendar quarter ending December 31, 2007, until the administrative penalty set forth in Paragraph 4 is satisfied in full; and
    3. Consumer Home Mortgage shall remit such payment(s) 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(s) for deposit into the General Fund of the Commonwealth.
  5. Nothing in this ORDER shall be construed as permitting Consumer Home Mortgage to violate any law, rule, regulation, or regulatory bulletin to which Consumer Home Mortgage is subject.
  6. In consideration of the foregoing ORDER, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke Consumer Home Mortgage's mortgage company license under General Laws chapter 255E, section 6, while this ORDER is in effect.
  7. Failure to comply with the terms of this ORDER shall constitute grounds for license suspension and/or revocation pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
  8. This ORDER shall become effective immediately upon the date of its issuance.
  9. The provisions of this ORDER shall be binding upon Consumer Home Mortgage and its officers and directors, and their successors or assigns.
  10. The provisions of this ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this ORDER shall have been modified, terminated, suspended, or set aside by the Commissioner or upon an order of a court of competent jurisdiction.
  11. This ORDER and the CONSENT AGREEMENT are the complete documents representing the resolution of this matter. There are no other agreements between the Division and Consumer Home Mortgage.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS:

Dated at Boston, Massachusetts, this 25th day of October, 2007.

By: Steven L. Antonakes
Commissioner of Banks