By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE BROKER
LICENSING
Docket No. 2008-002

ORDER TO SHOW CAUSE AND NOTICE OF RIGHT TO A HEARING


In the Matter of
ALPINE FINANCIAL SERVICES, LLC
D/B/A MORTGAGEOPIA
Auburn, Massachusetts

Mortgage Broker License No(s). MB3286 et al.


ADMINISTRATIVE COMPLAINT

The Commonwealth of Massachusetts Division of Banks (the "Division"), by and through the Commissioner of Banks of the Commonwealth of Massachusetts (the "Commissioner "), for its Order to Show Cause and Notice of Right to a Hearing ("Order and Notice"), alleges as follows:

  1. The Division brings this action under Massachusetts General Laws chapter 255E, section 6 to obtain temporary, preliminary, and permanent injunctive relief, ordering Alpine Financial Services, LLC d/b/a MortgageOpia ("Alpine Financial" or the "Company"), a licensed mortgage broker under Massachusetts General Laws chapter 255E, section 2, to cease and desist from transacting business in the Commonwealth as a mortgage broker; revocation of Alpine Financial's Massachusetts mortgage broker license, number(s) MB3286 et al.; and such other equitable relief as may be necessary for Alpine Financial's failure to maintain and exercise the financial responsibility, character, reputation, integrity, and general fitness that would warrant the belief that the business will be operated honestly, fairly, soundly, and efficiently in the public interest in violation of Massachusetts General Laws chapter 255E, section 4 and the Division's regulation 209 CMR 42.06(2)(c).

    JURISDICTION AND VENUE

  2. The Division, through the Commissioner, is an agency of the Commonwealth of Massachusetts with jurisdiction over matters relating to the licensing and operation of those engaged in the business of a mortgage broker pursuant to Massachusetts General Laws chapter 255E, section 2 and Massachusetts General Laws chapter 255E, section 8.
  3. At all relevant times, Alpine Financial has been engaged in the business of a mortgage broker of residential property ("Residential property" means real property located in the Commonwealth having thereon a dwelling house with accommodations for four or less separate households and occupied, or to be occupied, in whole or in part by the obligor on the mortgage debt pursuant to Massachusetts General Laws chapter 255E, section 1.) in Massachusetts.

    RESPONDENT

  4. 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.
  5. Alpine Financial is, and at all relevant times has been, a Massachusetts limited liability company doing business in the Commonwealth. Alpine Financial's main office is located at 714B Southbridge Street, Auburn, Massachusetts.
  6. Alpine Financial is licensed by the Commissioner as a mortgage broker under Massachusetts General Laws chapter 255E, section 2. According to records maintained on file with the Division, the Commissioner issued mortgage broker license number MB3286 to Alpine Financial to engage in the business of a mortgage broker at 714B Southbridge Street, Auburn, Massachusetts on January 28, 2004.
  7. Alpine Financial maintains additional office locations from which the Corporation conducts the mortgage broker business. According to records maintained on file with the Division, Alpine Financial currently possesses two (2) additional mortgage broker licenses from the Commissioner for locations operated in Marlborough and Boston, Massachusetts.

    REGULATORY BACKGROUND

  8. Mortgage brokers in Massachusetts are licensed and regulated under Massachusetts General Laws chapter 255E, which is administered and enforced by the Commissioner. Pursuant to Massachusetts General Laws chapter 255E, section 8, the Division is authorized to inspect the books, accounts, papers, records, and files of mortgage brokers transacting business in Massachusetts to determine compliance with the provisions of Massachusetts General Laws chapter 255E or any rule, or regulation issued thereunder, and with any law, rule, or regulation applicable to the conduct of the business of a mortgage broker.
  9. On November 30, 2006, pursuant to the authority granted under Massachusetts General Laws chapter 255E, section 8, the Division commenced an examination/inspection of the books, accounts, papers, records, and files maintained by Alpine Financial to evaluate the Company's compliance with the laws, regulations, and regulatory bulletins applicable to the conduct of a mortgage broker business in Massachusetts (the "2006 examination/inspection").
  10. The Report of Examination/Inspection (the "Report") prepared as of November 30, 2006 has been issued as of the effective date of this Order and Notice and was mailed to the Company's licensed address of record at 714b Southbridge Street, Auburn, MA 01501.

    A. Unfair or Deceptive Practices

  11. During the 2006 examination/inspection, the Division discovered that Alpine Financial had submitted to lenders Uniform Residential Loan Applications ("1003 Form") in which the applicants' stated gross monthly income differed significantly from the gross income as set forth in other pertinent documentation which Alpine Financial had in its possession. Moreover, said books and records reviewed by the Division's examiner contained multiple 1003 Forms for each loan file that reflected different gross monthly base employment incomes. Examples include, but are not limited to the following documents, as summarized below:
    1. Loan #0508037607 and #0508037608. Redacted copies of the documents are attached hereto as Exhibit 1 and are incorporated by reference.
      1. A first mortgage loan application signed and dated on July 18, 2006, by the applicant, indicated that the gross monthly base employment income of the applicant was $2,916, with net rental income of $1,350, and other (social security) income of $600, for a total of $4,866, or $58,632 annually.
      2. The second mortgage loan application signed and dated on July 18, 2005, indicated that the gross monthly base employment income was $5,500, net rental income of $1,500, and other (social security) income of $600, for a total of $7,600, or $91,200 annually.
      3. A loan application signed at settlement on August 26, 2005 indicated that the gross monthly base employment income was $6,700, with net rental income of $0, and other income of $0, for an annual total of $80,400.
      4. An incomplete and undated handwritten loan application indicated that the gross monthly base employment income for the aforementioned applicant, who was on this particular application listed as a co-applicant, was $12.64 per hour for 40 hours ($2,190.93 per month), with bonus (overtime) income of $14.14 per hour for 16 hours ($980.37 per month), and other (social security) income of $600, for a total of $3,771.30 per month, or $45,255.60 annually.
      5. Employment payment stubs for the applicant indicated that, under optimal circumstances (i.e. maximum overtime pay), the applicant's gross monthly base employment income would amount to $45,624.28 annually.
      6. The discrepancy in income reveals an overstatement of the applicant's gross annual income of approximately $34,776.
    2. Loan #326453 and #326455. Redacted copies of the documents are attached hereto as Exhibit 2 and are incorporated by reference.
      1. The Uniform Underwriting and Transmittal Form from the original application indicated the applicant's gross monthly income as $2,340, other income as $1,890, and positive cash flow on property of $2,426, totaling $6,656 per month, or $79,872 annually.
      2. The Internal Loan Approval form generated by the lender based on the Company's submission of the initial application reflected gross monthly base employment income of $4,343.24, other income of $529.33, and net rental of $1,313.50, totaling $6,186.07 per month, or $74,232.84 annually.
      3. Gross monthly base employment income reported on the first and second mortgage loan applications signed at settlement on February 13, 2006, was $5,500, with net rental income of $1,300, and other income of $530, totaling $7,330, or $87,960 annually.
      4. W-2 forms (retained in the loan file) for the years ending 2003 and 2004 report wages of $18,419.11 and $18,434.29, from one employer, and $6,674.01 and $6,352.00, from a second employer. Also retained in the loan files were pay stubs that reflect year-to-date gross earnings of $17,207.32 from the first employer as of November 17, 2005. Year-to-date gross earnings from the second employer as of December 14, 2005, were $5,393.00.
      5. The applicant's income as set forth in the W-2 forms reflects a total annual income of approximately $35,000.00. Rental income based on the lease agreement would amount to approximately $1500.00 per month ($18,000.00 annually). Gross annual income would therefore amount to approximately $53,000.00.
      6. The discrepancy in income reveals an overstatement of the applicant's gross annual income of approximately $34,960.
    3. Loan #161041666 and #161041668. Redacted copies of the documents are attached hereto as Exhibit 3 and are incorporated by reference.
      1. The gross monthly base employment income reported on the full-documentation first mortgage loan application signed and dated April 15, 2005, was $2,744.39, or $32,932.68 annually.
      2. On the loan application for the stated-income second mortgage application, signed and dated on April 15, 2007, the gross monthly base employment income was $4,200.00, or $50,400.00 annually.
      3. The W-2 forms, retained in the loan file, for the years ending 2003 and 2004 reported wages of $33,322.18 and $32,543.12 respectively.
      4. Pay stubs, retained in the loan file reflected year-to-date gross earnings of $8,740.00 as of March 31, 2005; extrapolated earnings for the remainder of the year aggregate expected gross annual income of $34,960.00.
      5. The review of the loan file revealed that the annual base income on the second loan application was overstated by approximately $15,400.00.
  12. By letter to the Division dated August 1, 2007, Jason Cabana, owner of Alpine Financial, attempted to explain the discrepancies noted in certain of the loan files referenced in Paragraph 11 of this Order and Notice. A copy of the letter is enclosed as Exhibit 4. According to the letter:
    1. The loan application(s) referenced in Paragraph 11(a) of the Order and Notice was originally submitted with a co-borrower named on the application. The lender rejected the original application because one of the co-borrowers had an unsatisfactory credit history. The lender knew that both individuals would be living in the home and advised Alpine Financial to increase the borrower's income and remove the co-borrower from the loan.
    2. The loan application(s) referenced in Paragraph 11(b) of the Order and Notice was originally submitted as a full documentation application with a co-borrower named on the application. The lender would not accept the application with one of the co-borrowers on the loan because of the co-borrower's unsatisfactory credit history. According to the letter, "[t]he lender's approval conditions states [sic] specifically using [the co-borrower's] W-2 income." Alpine Financial then added the other individual's income to the borrower of record's income. Alpine Financial also added income from the borrower's second job and rental income that had not been included in the initial application.
    3. Relative to the loan application(s) referenced in Paragraph 11(c) of the Order and Notice, the income listed on the application for the second mortgage "was never updated on the 1003 to reflect final underwriter's approval."
  13. Alpine Financial assisted in placing each of the applicants referenced in Paragraph 11 of this Order and Notice into stated income loan products when the mortgage loan application was placed with the relevant mortgage lender or financial institution.
  14. Alpine Financial knew or should have known that the incomes and/or liabilities stated in the 1003 Forms for the above referenced files were inaccurate or not reasonably reliable.
  15. Alpine Financial knew or should have known that the income and/or liability information reported on the above referenced 1003 Forms, and placed by Alpine Financial, would be relied upon in underwriting the mortgage loan by the mortgage lender or financial institution to which the mortgage loan applications were brokered by Alpine Financial.
  16. Alpine Financial knew or should have known that its participation in a pattern or practice of assisting in obtaining mortgage loans based upon inaccurate borrower income, employment and/or liability information would be detrimental to the public interest.

    B. Undisclosed Fees

  17. Massachusetts General Laws chapter 183, section 63 states, in pertinent part:

    A mortgagee, or a mortgage lender or mortgage broker as defined in section one of chapter two hundred and fifty-five E, shall not charge a loan fee, finder's fee, points, so-called, or similar fees in a mortgage transaction involving residential property located in the commonwealth of four or less units and occupied in whole or in part by the mortgagor, except to the extent that such fees or points have been previously disclosed to the mortgagor in writing, which disclosure may be in the form required by section seventeen D of chapter one hundred and eighty-four, or such other form which discloses said fees or points. A mortgagor shall not be obligated to pay fees or points which have not been previously disclosed as required herein.

  18. Books and records reviewed by the Division's examiners during the 2006 examination/inspection indicate that the Company engaged in a pattern or practice of understatements or omissions regarding the fees charged to consumers by Alpine Financial.
  19. The Company's books and records indicate that processing fees, and application fees (collectively, "broker fees") were collected at the loan closing in amounts which were not accurately disclosed to consumers, in writing, to the extent charged at closing, if at all. For details, see Exhibit 5 which is attached and incorporated herein by reference.

    C. Conducting Business with Unlicensed Entities

  20. The Attorney General's Regulation 940 CMR 8.06(9) states:

    It is an unfair or deceptive act or practice for a mortgage broker or lender to conduct business with a person which should be licensed under M.G.L. c. 255E, and which it knows or should know is an unlicensed mortgage broker or lender.

  21. By prior published opinions, the Division has set forth the standards which an individual must satisfy, in advance, when seeking to operate in the capacity of an independent contractor associated with a licensed mortgage broker or mortgage lender under General Laws chapter 255E, section 2. The Division's published opinions have consistently held that the exemption from licensure referenced herein is available exclusively to individuals engaging in the licensed business in the name of the licensee and is not available to an independent corporation, partnership, association, or other legal entity that is separate and distinct from the legal entity in whose name the license was issued.
  22. Books and records reviewed during the 2006 examination/inspection revealed that Alpine Financial compensated certain unlicensed business entities for loans originated through Alpine Financial, as specifically described in the Report.

    D. Engaging Unauthorized Individuals to Originate Mortgage Loans in Massachusetts

  23. Books and records reviewed by the Division's examiners during the 2006 examination/inspection indicate that Alpine Financial, at all relevant times, retained numerous unlicensed individuals, who were acting in the capacity of mortgage brokers and who were associated with and under the direction of the Company to conduct the mortgage broker business.
  24. By prior published opinions, the Division has set forth the standards which an unlicensed individual must satisfy, in advance, when seeking to operate in the capacity of a mortgage broker who is associated with and under the direction of a licensed mortgage broker under General Laws chapter 255E, section 2.
  25. Pursuant to the Division's published Opinion 97-222, the position of the Division of Banks is that exemption from licensure is available only to individuals and not to a corporate entity. The relationship between the licensee and the individual must be exclusive and the individual must execute an Exemption Affidavit to that effect. The licensee must execute a Statement of Accountability for all activities of the individual associated with it. The individual seeking the exemption must be primarily engaged in the activity it is seeking to perform under the direction of a licensed mortgage broker.
  26. The Division's published Opinion 97-061 further states that "this exemption would be effective provided that the Licensee completes and files with the Division a Statement of Accountability agreeing to take responsibility for the exempt individual's activities and the individual seeking the exemption completes and files the required Exemption Affidavit."
  27. Books and records reviewed by the Division's examiners during the 2006 examination/inspection revealed that sixty-five independent contractors originated approximately 628 loans on behalf of Alpine Financial since 2004.
  28. Alpine Financial did not file the required Exemption Affidavits and Statements of Accountability for the independent contractors referenced in Paragraph 28 until the Division's examiners alerted the Company to the issue during the 2006 examination/inspection.
  29. Because Alpine Financial had failed to file the aforementioned required Exemption Affidavits and Statements of Accountability, the Division was unable to determine if Alpine Financial, had satisfied the qualifying standards for unlicensed individuals acting in the capacity of mortgage brokers associated with and under the direction of a licensed mortgage brokers set forth by the relevant opinions published by the Division prior to the completion of the loan origination activity referenced in paragraph 28.

    E. Failure to Notify the Division of Significant Events

  30. During the 2006 examination/inspection, Alpine Financial verbally notified the Division's examiners that a branch office located in Worcester had been closed prior to the 2006 examination/inspection.
  31. The Division's regulation 209 CMR 42.13(2) states:

    Licensees shall provide thirty days prior written notice of any change or closing of a Massachusetts location to the Commissioner and shall contain such other information as the Commissioner may require.

  32. As of the date of this Order and Notice, the Division has not received notification of the events referenced in Paragraph 31 of this Order and Notice.

    F. Interest Rate Lock Commitments

  33. The Division's regulation 209 CMR 42.12A(3) states, in part:

    It is a prohibited act or practice for a mortgage broker to issue a mortgage loan rate lock commitment on its own behalf or on behalf of a mortgage lender, or to imply to a consumer that it can lock a rate on behalf of the consumer. Nothing herein shall be construed to prohibit a mortgage broker from taking a rate lock commitment fee for transmittal to a mortgage lender prior to the issuance by the mortgage lender of a commitment or approval, provided that prior to the taking of a rate lock commitment fee:

    ...................................................

    (b) the rate lock commitment fee is made payable by the consumer to the mortgage lender which intends to make the loan. A mortgage broker may only take a rate lock commitment fee for transmittal to the mortgage lender which intends to make the loan. Nothing herein shall prohibit a mortgage broker from negotiating the terms or conditions of a mortgage loan, including the interest rate, on behalf of a consumer. A mortgage broker may also use such forms or other evidence as desired to allow a consumer to indicate a preference to enter into a mortgage rate lock commitment with a mortgage lender. However, any such forms or evidence must clearly and conspicuously contain the following statement: "This is a request, not a commitment, to lock your interest rate with a mortgage lender".

  34. The 2006 examination/inspection revealed that Alpine Financial provided consumers with a "Loan Pricing Agreement Defining Interest Rate and Terms," which includes language that implies that Alpine Financial can lock a mortgage rate on behalf of the consumer. Such languages includes, but is not limited to, "If a Commitment Fee amount is provided in the space below, you are required to pay that fee upon the execution of this Agreement to bind ALPINE to the terms of this agreement." See Exhibit 6, which is attached hereto and incorporated by reference, which presents the inferring language in its entirety.
  35. The Agreement referenced in the preceding paragraph did not contain the required language, "This is a request, not a commitment, to lock your interest rate with a mortgage lender."

    G. Engaging in Prohibited Advertising Practices

  36. Attorney General's regulation 940 CMR 8.04(2) states, in part:

    It is an unfair or deceptive act or practice for a mortgage broker or lender to advertise without clearly and conspicuously disclosing its business name, the words "broker" or "lender", as applicable, and the license number.

  37. Alpine Financial did not properly disclose the Company's license type and number in its consumer solicitations as required pursuant to 940 CMR 8.04(2). Alpine Financial also disclosed an incorrect license number on the Company's website.
  38. Attorney General's regulation 940 CMR 8.04(1) states:

    It is an unfair or deceptive act or practice for a mortgage broker or lender to make any representation or statement of fact in an advertisement if the representation or statement is false or misleading or has the tendency or capacity to be misleading, or if the mortgage broker or lender does not have sufficient information upon which a reasonable belief in the truth of the representation or statement could be based.

  39. Alpine Financial provided consumers with a solicitation that stated, "You have been pre-approved for a loan" and contained the Equal Housing Lender logo. Such representations in the solicitation have the tendency or capacity to mislead consumers as they present the appearance that the Company, a mortgage broker is approving or funding loans.
  40. The Division's regulation 209 CMR 42.12A(4) states:

    It is a prohibited act or practice for a mortgage broker to advertise any interest rate or loan term described in 209 CMR 32.24(3)(a) in any media without the following statement: "We arrange but do not make loans". No advertisement by a mortgage broker in any media shall contain language which indicates or suggests that the mortgage broker will fund or approve a mortgage loan or guarantee any rate.

  41. Alpine Financial's website and consumer solicitation advertise interest rates and/or loan terms without including the statement, "We arrange but do not make loans" as required pursuant to 209 CMR 42.12A(4).
  42. The Attorney General's regulation 940 CMR 8.04(4)(d) states:

    (4) It is an unfair or deceptive act or practice for a mortgage broker or lender to engage in bait advertising or to misrepresent (directly or by failure to adequately disclose) the terms, conditions or charges incident to the mortgage loan being advertised in any advertisement. Violation of 940 CMR 8.04(4) shall include, but not be limited to:

    ...................................................

    (d) the advertisement through terms such as "bad credit no problem" or words of similar import or that an applicant will have unqualified access to credit without clearly and conspicuously disclosing the material limitations on the availability of credit that may exist, such as:

    1. requirements for the availability of credit (such as income);
    2. that a higher rate or more points may be required for a consumer with bad credit; and
    3. that restrictions as to the maximum principal amount of the loan offered may apply.
  43. Alpine Financial's website contains the phrase "Bankruptcy & Foreclosure OK!" presenting the appearance that applicants will have unqualified access to credit and does not include the disclosure language required pursuant to 940 CMR 8.04(4)(d).
  44. Massachusetts General Laws chapter 167, section 37 states, in part:

    A person, domestic or foreign corporation, partnership, association, limited liability company or similar entity shall not make reference to an existing bank, federal bank, federal branch, foreign bank, out-of-state bank, out-of-state branch, out-of-state federal bank as defined in section 1 of this chapter, or federal credit union as defined in section 1 of chapter 171, or any subsidiary thereof, without the express written consent of the bank, federal bank, federal branch, foreign bank, out-of-state bank, out-of-state branch, out-of-state federal bank or federal credit union, or any subsidiary thereof, or make reference to a loan number, loan amount or other specific loan information on the outside of an envelope, visible through the envelope window, or on a postcard in connection with any written solicitation or an email for products or services to a specifically identified consumer.

  45. Alpine Financial's consumer solicitation references "Salem Five Cents Mtg" without the written consent from Salem Five Cents Savings Bank, an existing state-chartered bank.
  46. The Division's regulation 209 CMR 32.24(2) states:

    If an advertisement states a rate of finance charge, it shall state the rate as an "annual percentage rate," using that term. If the annual percentage rate may be increased after consummation, the advertisement shall state that fact. The advertisement shall not state any other rate, except that a simple annual rate or periodic rate that is applied to an unpaid balance may be stated in conjunction with, but not more conspicuously than, the annual percentage rate.

  47. Alpine Financial's website advertises "rates as low as 1.25%" but fails to state the "annual percentage rate" as required pursuant to 209 CMR 32.24(2). Additionally, Alpine Financial's consumer solicitation discloses a simple annual rate more conspicuously that the annual percentage rate.
  48. The Division's regulation 209 CMR 32.24(3)(b) states:

    An advertisement stating any of the terms in 209 CMR 32.24(3)(a) [e.g. amount of any payment] shall state the following terms, as applicable:

    1. 1. The amount or percentage of the downpayment.
    2. 2. The terms of repayment.
    3. 3. The "annual percentage rate", using that term, and, if the rate may be increased after consummation, that fact.
  49. Alpine Financial's website and consumer solicitation set forth payment amounts but fail to include the addition disclosures required pursuant to 209 CMR 32.24(3)(b).
  50. The above-referenced consumer solicitation and web pages are attached hereto as Exhibits 7 and 8, respectively, and are incorporated by reference.

    VIOLATIONS

    NOW, THEREFORE, the Division hereby sets forth the following Charges against Alpine Financial:

  51. The Division hereby re-alleges and incorporates by reference Paragraphs 1 through 51 of this Order and Notice as though fully set forth.
  52. CHARGE ONE: By falsifying applicants' income information on mortgage loan applications, Alpine Financial violated Massachusetts General Laws Chapter 93A, section 2(a).
  53. CHARGE TWO: By charging loan fees, points, or similar fees in a mortgage transaction involving residential property located in the Commonwealth, of four or less units and occupied in whole or in part by the mortgagor, in amounts exceeding those previously disclosed for such fees or points to the mortgagor in writing, Alpine Financial has violated Massachusetts General Laws chapter 183, section 63.
  54. CHARGE THREE: Alpine Financial has solicited or accepted residential mortgage loan applications for property located in Massachusetts from individuals engaging in the activity of a mortgage broker who were not employed by the Company and who otherwise failed to qualify for an exemption from licensure under the provisions of General Laws chapter 255E, section 2 as set forth by the Division by prior published opinions, including without limitation, Opinions 97-061, and 97-222.
  55. CHARGE FOUR: By compensating unlicensed business entities for loans originated through the Company, Alpine Financial has violated the Attorney General's Regulation 940 CMR 8.06(9).
  56. CHARGE FIVE: By closing a Massachusetts office location without first notifying the Commissioner, in writing, at least thirty days prior to the closing of the office locations, Alpine Financial has violated the Division's regulation 209 CMR 42.13(2).
  57. CHARGE SIX: By providing the "Loan Pricing Agreement Defining Interest Rate and Terms" form which presents the inference that the Company can lock an interest rate on behalf of the consumer and by failing to include required disclosure language in the aforementioned Agreement, Alpine Financial has violated the Division's regulation 209 CMR 42.12A(3).
  58. CHARGE SEVEN: By failing to disclose and/or inaccurately disclosing the Company's license type and number on its consumer solicitations, mailings and the Company's website, Alpine Financial has violated the Division's regulation 209 CMR 42.15.
  59. CHARGE EIGHT: By mailing consumer solicitations that contained false or misleading language or had the tendency to be false or misleading, Alpine Financial has violated the Attorney General's regulation 940 CMR 8.04(1).
  60. CHARGE NINE: By advertising interest rates and/or loan terms on the Company's website and consumer solicitations without including the statement, "We arrange but do not make loans," Alpine Financial has violated the Division's regulation 209 CMR 42.12A(4).
  61. CHARGE TEN: By advertising interest rates and/or loan terms on the Company's website and consumer solicitations without including the statement, "We arrange but do not make loans," Alpine Financial has violated the Division's regulation 209 CMR 42.12A(4).
  62. CHARGE ELEVEN: by referencing an existing bank on a consumer solicitation without the consent of such bank, Alpine Financial has violated Massachusetts General Laws chapter 167, section 37.
  63. CHARGE TWELVE: by engaging in so-called "bait advertising" and failing to include required disclosure language on the Company's website, Alpine Financial has violated the Attorney General's regulation 940 CMR 8.04(4).
  64. CHARGE THIRTEEN: by failing to include required disclosures on the Company's website when advertising certain credit terms, Alpine Financial has violated the Division's regulations 209 CMR 32.24(2) and 32.24(3).
  65. CHARGE FOURTEEN: By engaging in the practices described above in Paragraphs 1 through 51, inclusive, Alpine Financial has failed to demonstrate the financial responsibility, integrity, and general fitness that would warrant the belief that the business will be operated honestly, fairly, soundly, and efficiently in the public interest as required by Massachusetts General Laws chapter 255E, section 4 and the Division's regulation 209 CMR 42.06(2)(c).
  66. CHARGE FIFTEEN: Had the foregoing existed at the time of Alpine Financial's original mortgage broker license application, such conditions would have warranted a denial by the Commissioner of the license application and are grounds for the revocation of Alpine Financial's mortgage broker license number(s) MB2386 et al., as stated in Massachusetts General Laws chapter 255E, section 6.

    PRAYER FOR RELIEF

  67. WHEREFORE, the Division, by and through the Commissioner , prays for a final decision as follows:
    1. For a final Agency decision awarding temporary and preliminary injunctive relief, and any other ancillary relief, as may be necessary to protect the public interest during the pendency of this matter.
    2. For a final Agency decision in favor of the Division and against Alpine Financial for each Charge set forth in this ORDER AND NOTICE.
    3. For a final Agency decision ordering Alpine Financial to cease and desist from transacting business in Massachusetts as a mortgage broker.
    4. For a final Agency decision ordering Alpine Financial to immediately place any pending residential mortgage loan applications and related files with an independent, licensed Massachusetts mortgage lender or other qualified lender in Massachusetts, with no costs to the applicant.
    5. For a final Agency decision revoking Alpine Financial's mortgage broker license, number(s) MB4284 et al., to conduct business as a mortgage broker in Massachusetts.
    6. For a final Agency decision prohibiting Jason Cabana, the sole Member of Alpine Financial, or any other officer, director, or their successors or assigns, from applying for a mortgage lender, mortgage broker license, or mortgage loan originator under Massachusetts General Laws chapter 255E, section 2 and Massachusetts General Laws 255F or for any other license from the Commissioner, for a period of twenty-four (24) months from the effective date of the final Agency decision.
    7. For a final Agency decision requiring Jason Cabana to notify the Division in writing, within fifteen (15) days of the occurrence of either event if, within twenty-four (24) months of such final Agency decision: (a) he accepts employment with any bank, as defined under General Laws chapter 167, section 1, or any subsidiary thereof, or any other entity licensed by the Division or (b) if his employment with such entity ends.
    8. For a final Agency decision prohibiting Jason Cabana from acting in the capacity of an owner, officer, director, or manager of any bank, or any subsidiary thereof, or any other entity licensed by the Division during the twenty-four (24) months following the effective date of such final Agency decision.
    9. For costs and fees of the Division's investigation of this matter.
    10. For such additional equitable relief as the Presiding Officer may deem just and proper including, without limitation, an order directing Alpine Financial to issue the reimbursements set forth in the findings of the Report.

    NOTICE OF RIGHT TO A HEARING

  68. You or your authorized representative are required to file an Answer or otherwise respond to the Charges contained in this ORDER AND NOTICE within twenty-one (21) days of the effective date of this ORDER AND NOTICE, pursuant to the Standard Adjudicatory Rules of Practice and Procedure, 801 C.M.R. §§ 1.01 (6)(e). Failure to do so may result in a default judgment against you. The Answer, and any subsequent filings that are made in conjunction with this proceeding, shall be directed to the Administrative Hearings Officer, Division of Banks, with a copy to Prosecuting Counsel.

    All papers filed with the Division shall be addressed to the attention of:

    Administrative Hearings Officer
    Division of Banks
    One South Station, 3 rd Floor
    Boston, Massachusetts 02110
    Prosecuting Counsel for this matter is:

    Valerie M. Carbone, Esq.
    Division of Banks
    One South Station, 3 rd Floor
    Boston, Massachusetts 02110

  69. You are further advised that Alpine Financial has the right to be represented by counsel or other representative, to call and examine witnesses, to introduce exhibits, to cross-examine witnesses who testify against Alpine Financial, and to present oral argument. The hearing will be held at a date and time to be determined and will be conducted according to Massachusetts General Laws, chapter 30A, sections 10 and 11, and the Standard Adjudicatory Rules of Practice and Procedure, 801 CMR 1.01 and 1.03.
  70. You or your representative may examine any and all Division records relative to this case prior to the date of the hearing, during normal business hours, at the office of the Prosecuting Counsel. If you elect to undertake such an examination, please contact the Division at (617) 956-1543 in advance to schedule a time that is mutually convenient.

Dated at Boston, Massachusetts, this 9th day of June, 2008.

John M. Prendergast
Chief Risk Officer
Commonwealth of Massachusetts


CERTIFICATION OF SERVICE

I, Steven Cofsky, hereby certify that a copy of the foregoing Order to Show Cause and Notice of Right to a Hearing, Docket Number 2008-002, was served upon the Respondent, Alpine Financial Services, LLC d/b/a MortgageOpia, 714B Southbridge Street, Auburn, Massachusetts 01501 by first class mail, postage prepaid and by [certified mail, number 7003 2260 0005 3634 3459, return receipt requested OR facsimile?]

This 9th day of June, 2008.

Steven Cofsky
Chief Director
Division of Banks


Exhibit 5

The following is a list of broker fees collected from consumers at closing by Alpine Financial that were not previously disclosed in writing:

DISCLOSURES & REIMBURSEMENTS



Loan NumberFees PaidFees DisclosedReimbursable Amount

0601268954

$975 + $350 = $1325

$475 + $250 = $725

$600

11444621

$500

$250

$250

0603296444

$695

$645

$50

4000011571

$669.74

$646

$24.74