By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER AND
MORTGAGE BROKER
LICENSING
Docket No. 2008-020

FINDINGS OF FACT AND TEMPORARY
ORDER TO CEASE AND DESIST


In the Matter of
FIRST CALL MORTGAGE COMPANY, INC.
Andover, Massachusetts

Mortgage Company License No(s). MC3198 et al.


The Commissioner of Banks ("Commissioner") having determined that FIRST CALL MORTGAGE COMPANY, INC., ("First Call Mortgage" or the "Corporation"), located at 200 Brickstone Square, Suite 303, Andover, Massachusetts, has engaged in, or is engaging 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 lender and mortgage broker in Massachusetts pursuant to Massachusetts General Laws chapter 255E, section 2.
  2. First Call Mortgage is, and at all relevant times has been, a Massachusetts Corporation doing business in the Commonwealth. First Call Mortgage's main office of record is located at 200 Brickstone Square, Suite 303 Andover, Massachusetts.
  3. First Call Mortgage is licensed by the Commissioner as a mortgage lender and mortgage broker under Massachusetts General Laws chapter 255E, section 2. According to records maintained on file with the Division, the Commissioner initially issued a mortgage company license, license number MC3198 to First Call Mortgage to engage in the business of a mortgage lender and mortgage broker on or about October 9, 2003. License number MC3198 authorized First Call Mortgage to conduct the mortgage company business from the Corporation's main office located at 200 Brickstone Square, Andover, Massachusetts.
  4. First Call Mortgage maintains additional office locations from which the Corporation conducts its mortgage broker and mortgage lender business. According to records maintained on file with the Division, First Call Mortgage currently possesses two (2) additional mortgage company licenses from the Commissioner for a location operated in Massachusetts, as well as a location outside the Commonwealth.
  5. Mortgage lenders and 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 lenders and 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 lender and mortgage broker.
  6. On Monday, July 14, 2008, pursuant to Massachusetts General Laws chapter 255E, section 8, the Division commenced an examination/inspection of the books, accounts, papers, records, and files maintained by First Call Mortgage to evaluate the Corporation's compliance with the laws, regulations, and regulatory bulletins applicable to the conduct of a mortgage lender and mortgage broker business in Massachusetts (the "2008 examination/inspection").
  7. The Division's Report of Examination/Inspection on Consumer Compliance (the "Report"), which was issued to First Call Mortgage on the effective date of this Temporary Order, presented the findings of the 2008 examination/inspection and alleged significant failures to comply with applicable state and federal laws, rules, regulations, and regulatory bulletins governing the conduct of those engaged in the business of a mortgage lender and mortgage broker in Massachusetts.

    A. Unfair and/or Deceptive Business Practices

    Misleading Representations of a Prospective Borrower's Income

  8. Massachusetts General Laws chapter 93A, section 2(a) states:

    Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.

  9. The Attorney General's regulation 940 CMR 8.06(1) states, in part:

    It is an unfair or deceptive act or practice for a mortgage broker or lender to make any representation or statement of fact if the representation or statement is false or misleading or has the tendency or capacity to be misleading.

  10. The Division's regulation 209 CMR 42.12A(8), effective as of September, 8, 2006, states:

    It is a prohibited act or practice for a mortgage broker of mortgage lender to falsify income or asset information on a mortgage loan application or mortgage loan documents.

  11. The 2008 examination/inspection revealed that First Call Mortgage, had submitted to lenders Uniform Residential Loan Applications ("1003 Form") in which the applicants' financial information including applicants' gross income differed significantly from the financial information reflected on other pertinent documents including pay stubs and statements of benefit which the Corporation had in its possession. Examples include, but are not limited to the following:
    1. Loan No.(s): 8024219503 and 2132876252:
      1. Copies of first and second stated loan applications prepared by First Call Mortgage and signed by the borrower on March 8, 2006 for loans which ultimately closed on March 24, 2006, indicated that the borrower, a program project specialist at the United States Air Force, earned approximately $11,500 monthly or $138,000 annually.
      2. A copy of the borrower's Personal Statement of Benefits Form ("Form") located in the loan file maintained by First Call Mortgage, though obscured by black marker, was legible and listed the annual salary of the borrower as of January 31, 2006 at $57,270.
      3. The discrepancy between the information reflected on the loan applications and the "blacked out" Form, reveals that First Call Mortgage overstated the borrower's annual income by approximately $80,730.
    2. Loan No.(s): 681012273 and 681012276:
      1. Copies of first and second stated loan applications prepared by First Call Mortgage for loans which ultimately closed on May 17, 2006 indicated that the borrower, a supply manager at the Massachusetts Bay Commuter Railroad Company, LLC, earned approximately $8,833 monthly or $105,996 annually.
      2. A 2004 United States Railroad Retirement Board "Certificate of Service Months and Compensation" ("Form") located in the file maintained by First Call Mortgage reflected the annual creditable compensation for 2001-2004. The highest salary listed was in 2001 and was $40,145.85.
      3. On August 11, 2006, the Division's examiner spoke to a representative at the Railroad Retirement Board who confirmed the information reflected on the Form. The representative indicated that the borrower's income in 2006 was just over $32,000 annually.
      4. The discrepancy between the information reflected on the loan applications and the information received from the representative from the Railroad Retirement Board reveals that First Call Mortgage overstated the borrower's annual income by approximately $73,996.
      5. Land records reviewed by the Division's examiners revealed that the property had subsequently been foreclosed on November 15, 2007.
    3. Loan No.: 206-157053:
      1. A copy of a stated loan application prepared by First Call Mortgage for a loan which ultimately closed on March 17, 2006 indicated that the borrower, a human resources specialist at GE Ionics, earned approximately $5,416 monthly or $64,992 annually.
      2. Two copies of pay stubs located in the loan file maintained by First Call Mortgage as of January 15, 2006 and January 29, 2006 respectively reflected a bi-weekly gross income of $2,058.86 or $53,530.36 annually.
      3. The discrepancy between the information reflected on the loan application and the pay stubs located in the loan files maintained by First Call Mortgage reveals that the Corporation overstated the borrower's annual income by approximately $11,461.64.
    4. Loan A (1 st loan) & Loan No.: 107021609764000:
      1. Copies of a first and second stated loan applications prepared by First Call Mortgage for loans which ultimately closed on March 23, 2007 indicated that the borrower, a self-employed contractor, earned $5,341.17 or $64,094 annually and $6,448.00 or $77,376 annually.
      2. In response to the differences in income reflected on both applications, the Corporation indicated that both loans had closed on separate dates, however a review of mortgage records indicated that the first and second loan had closed simultaneously.
  12. First Call Mortgage knew or should have known that financial information submitted on behalf of prospective borrower's to mortgage lenders would determine the mortgage loan product that the borrower ultimately qualified for.
  13. First Call Mortgage knew or should have known that the above referenced income and/or asset information 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 First Call Mortgage.

    B. Misrepresentation to the Division's Examiners

  14. On or around April 9, 2008, while First Call Mortgage was transitioning to the Nationwide Mortgage Licensing System ("NMLS"), a centralized licensing system, information reflected on the MU1 indicated that the Corporation offered reverse mortgages. As a result, the Division contacted First Call Mortgage via the NMLS and requested the following clarification:

    ...Please send an email clarifying whether your company brokers and/or closes reverse mortgages...Please note that mortgage lenders wishing to close or fund reverse mortgages must submit a reverse mortgage program to the Commissioner of Banks for review and be approved prior to offering such a program. This is a requirement for all institutions and companies that wish to offer reverse mortgages, regardless of whether they are licensed or exempt from licensing under the provisions of M.G.L. c. 255E, Section 2, (i.e. a bank, credit union, etc.). The program must include all information requested in the following statutes: M.G.L. c.183, Section 67 and M.G.L. c. 167E, Section 7. Please submit your loan documentation along with your reverse mortgage program....

  15. In response, the Division received an e-mail from the Chief Operating Officer ("COO") of First Call Mortgage stating the following: "To clarify we are only brokering reverse mortgages at this time."
  16. During the 2008 examination/inspection the Division's examiners inquired about First Call Mortgage's reverse mortgage program. The COO e-mailed the Division's examiner and indicated that the Corporation made some reverse mortgage loans for a period of one month.
  17. On September 4, 2008, on at least two occasions, during a discussion with a representative of First Call Mortgage at the Corporation's main office, the Division's examiners inquired if the Corporation had acted in the capacity of a mortgage lender in any reverse mortgage transaction in Massachusetts. In response to the inquiry, the Division's examiners were informed that while First Call Mortgage had table funded loans over a one month period, those reverse mortgage loans did not involve residential property located in Massachusetts. Upon reviewing their records, the Corporation reiterated that First Call had not made any reverse mortgage loans in Massachusetts.
  18. The Division's examiners thereafter conducted a review of mortgage deeds recorded at the Southern Middlesex Registry of Deeds through www.masslandrecords.com and discovered that First Call Mortgage had table funded at least one reverse mortgage loan during June 2008.
  19. The Division's examiners immediately notified the Corporation's representative who thereafter indicated that First Call Mortgage had table funded reverse mortgage loans through a national reverse mortgage lender.
  20. In response, the Division's examiners requested a year to date loan list of all reverse mortgage loan transactions brokered or made by the Corporation. A review of the loan list indicated that First Call Mortgage acted in the capacity of a mortgage lender in at least six reverse mortgage loans on residential property located in Massachusetts over a period of five months.

    C. Violation of Massachusetts Reverse Mortgage Statutory Requirements

    Making Reverse Mortgage Loans without Approval

  21. Based upon the information contained in Paragraphs 14 through 20 of this Temporary Order, First Call Mortgage, was notified by the Division, that Massachusetts law requires mortgagees intending to make reverse mortgage loans to submit for the Division's approval, a program which meets specific criteria set forth in Massachusetts General Laws Chapter 167E, section 7, and made applicable to mortgagees through Massachusetts General Laws chapter 183, section 67.
  22. Books and Records reviewed by the Division's examiners revealed that First Call Mortgage had made at least six reverse mortgage loans on residential property located in the Commonwealth without receiving approval.

    Failure to Demonstrate Compliance with Massachusetts Borrower Protections in Reverse Mortgage Transactions

  23. General Laws, chapter 167E, section 7(d)(2), made applicable to all mortgagees by General Laws, chapter 183, section 67 states:

    The commissioner shall not approve a program for reverse mortgage loans which does not include the following:-
    (2) an applicant for the loan shall not be bound for 7 days after his acceptance, in writing, of the lender's written commitment to make the loan.

  24. Books and records reviewed by the Division's examiners during the 2008 examination/inspection indicated that First Call Mortgage failed to retain sufficient evidence in at least two loan files to demonstrate that the borrower's were afforded the seven day cooling off period subsequent to the acceptance of the Corporation's commitment to make the loan.

    Failure to Document a Prospective Borrower's Completion of Mandatory Counseling with an Approved Agency

  25. General Laws, chapter 167E, section 7(e), made applicable to all mortgagees by General Laws, chapter 183, section 67 states:

    A bank shall not make a reverse mortgage loan as provided in this section until it has received a notice, in writing, that the prospective borrower has completed a reverse mortgage counseling program which has been approved by the executive office of elder affairs and which shall include instruction on reverse mortgage loans. The counseling program shall include, but is not limited to...

  26. Books and records reviewed by the Division's examiners during the 2008 examination/inspection indicated that First Call Mortgage failed to retain evidence in the loan file maintained by the Corporation, documenting that a reverse mortgage borrower had completed the mandatory counseling program and that the program had been approved by the Executive Office of Elder Affairs.

    D. Issuance of Mortgage Loan Rate Lock Agreements

  27. 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:

    (a) the mortgage broker provides the consumer with a mortgage loan rate lock commitment from the mortgage lender which intends to make the loan, which conforms with the requirements of 209 CMR 42.11A; and

    (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".

  28. The 2008 examination/inspection revealed that when acting in the capacity of a mortgage broker, First Call Mortgage provided consumers with a "Rate Lock Form" on the Corporation's letterhead, which implied that First Call Mortgage could lock an interest rate on behalf of the consumer. The language in the Form gave a prospective borrower the option of floating or locking in a rate and did not contain the statement indicating that the Form was merely a request and not a commitment to lock in the rate with a mortgage lender.

    E. Providing Mortgage Lender Disclosures to Consumers When Acting in the Capacity of a Mortgage Broker

  29. Massachusetts General Laws chapter 183, section 28C(a) states in part:

    A lender shall not knowingly make a home loan if the home loan pays off all or part of an existing home loan that was consummated within the prior 60 months or other debt of the borrower, unless the refinancing is in the borrower's interest. The "borrower's interest" shall be narrowly construed, and the burden is upon the lender to determine that the refinancing is in the borrower's interest.

  30. The Division's regulation 209 CMR 53.07(1)(b) states in part:

    A lender may request that a borrower acknowledge receipt of such a worksheet or other documentation; provided, however, a lender shall not shift the burden to the borrower to demonstrate that a home loan is in the borrowers' interest.

  31. Books and records reviewed by the Division's examiners during the 2008 examination/inspection revealed that when acting in the capacity of a mortgage broker, First Call Mortgage provided consumers with a "Net Tangible Benefit Disclosure and Acknowledgement" ("Form") on the Corporation's letterhead. It has been the Division's longstanding position that the determination of the borrower's interest is the lender's responsibility and the burden should not be shifted to the borrower or made by a mortgage broker. By distributing the Form to prospective borrower's on the Corporation's letterhead when acting in the capacity of a mortgage broker, First Call Mortgage exceeded its authority as a mortgage broker and distributed a form which appeared to shift the burden to the borrower.
  32. Books and records reviewed by the Division's examiners during the 2008 examination/inspection indicate that First Call Mortgage, when acting in the capacity of a mortgage broker, routinely provided several mortgage lender disclosures to consumers in violation of and exceeding its authority under G. L. c. 255E.
  33. The mortgage lender disclosures include, but are not limited to, Equal Credit Opportunity Notices, Servicing Disclosure Statements, Truth in Lending Statements and Pre-Approval Letters.

    F. Failure to Provide the Division Required Notice of Significant Events

    Failure to Provide Notice of Change in Ownership

  34. The Division's regulation 209 CMR 42.12(3)(a) states:

    15 days prior to any proposed change in control in the ownership of a Licensee, or among the officers, partners or directors of a Licensee, a notice shall forthwith be filed with the Commissioner who may thereupon cause such investigation to be made as he deems necessary, as if it were a new license. In the case of a corporation, control is defined as a change of ownership by a person or group acting in concert to acquire ten percent of the stock, or the ability of a person or group acting in concert to elect a majority of the directors or otherwise effect a change in policy of the corporation.

  35. Books and records reviewed during the 2008 examination/inspection revealed that First Call failed to provide fifteen days prior notice of a change in control in the ownership of the Corporation. Specifically, on August 27, 2007, Carl McFadden sold a 50% interest in the Corporation to two outside owners. As a result, the Division was unable to determine if an investigation may have been necessary.
  36. The Division's records on the NMLS indicate that First Call Mortgage attempted to modify the ownership status on August 27, 2008, approximately one year after the transfer of interest.

    G. Failure to Properly Maintain Books and Records

  37. The Division's regulation 209 CMR 42.09(1)(b) states:

    Each Licensee shall keep and use its books, records and accounts in a manner which will allow the Commissioner to determine whether the Licensee is complying with the provisions of M.G.L. c. 255E and applicable state and federal laws and regulations. Each Licensee shall comply with the provisions of 209 CMR 48.00...

    (b) The mortgage broker ... shall retain for a minimum of three years after a mortgage loan is made the following: the original loan origination and compensation agreement as set out in 209 CMR 42.16; a copy of the settlement statement; an account of fees received in connection with the loan; correspondence; papers or records relating to the loan; and such other documents as the Commissioner may require.

  38. Books and records reviewed by the Division's examiners during the 2008 examination/inspection indicated that First Call Mortgage failed to retain sufficient documentation to enable the Commissioner to determine whether the Corporation was complying with certain laws and regulations governing mortgage lenders and mortgage brokers in Massachusetts, including but not limited to, compliance with mandated timing requirements. In at least three loan files reviewed, First Call Mortgage failed to retain sufficient documentation to enable the Division's examiners to determine that an Attorney General's Mortgage Broker disclosure was provided. In addition, copies of Good Faith Estimate Disclosures and Loan Origination and Compensation Agreements ("Disclosures") noted dates that were prior to the date of application.

    H. Misleading Statements

  39. The Attorney General's regulation 940 CMR 8.06(1) states, in part:

    It is an unfair or deceptive act or practice for a mortgage broker or lender to make any representation or statement of fact if the representation or statement is false or misleading, or has the tendency or capacity to be misleading.

  40. Books and records reviewed during the 2008 examination revealed that when acting in the capacity of a mortgage broker, First Call Mortgage provided applicants with a Borrower's Certification and Authorization Form that contained language that was false or misleading or had the tendency or capacity to be false or misleading. Specifically, the Borrower's Certification and Authorization Form contained language which presented the appearance that First Call Mortgage, was approving or funding the mortgage loan by indicating that the Corporation would be able to sell the mortgage loan to an investor.

    CONCLUSIONS OF LAW

  41. Based upon the information contained in Paragraphs 1 through 40, First Call Mortgage has failed to demonstrate and maintain the character, reputation, integrity, and general fitness that would warrant the belief that the mortgage lender and mortgage broker business will be operated honestly, fairly, and soundly in the public interest in violation of Massachusetts General Laws chapter 255E, section 4 and the Division's regulations 209 CMR 42.03(2)(c) and 209 CMR 42.06(2)(c).
  42. Based upon the information contained in Paragraphs 1 through 40, by falsifying borrowers' income information on Uniform Residential Loan Applications submitted in connection with residential mortgage transactions, First Call Mortgage has violated the Massachusetts General Laws chapter 93A, section 2(a), the Office of the Attorney General's implementing regulation 940 CMR 8.06(1) the Division's regulation 209 CMR 42.12A(8).
  43. Based upon the information contained in Paragraphs 1 through 40, by making reverse mortgage loans prior to obtaining approval from the Division, First Call Mortgage violated Massachusetts General Laws chapter 167E, section 7, applicable to all mortgagees by Massachusetts General Laws Chapter 183, section 67.
  44. Based upon the information contained in Paragraphs 1 through 40, by failing to provide documentation indicating that reverse mortgage borrowers were afforded a seven day cooling off period prior to settlement, First Call Mortgage violated Massachusetts General Laws chapter 167E, section 7(d)(2), applicable to all mortgagees by Massachusetts General Laws Chapter 183, section 67.
  45. Based upon the information contained in Paragraphs 1 through 40, by failing to ensure that consumers who obtained reverse mortgage loans were counseled through an agency approved by the Executive Office of Elder Affairs, when acting in the capacity of a mortgage lender, First Call Mortgage violated Massachusetts General Laws chapter 167E, section 7(e), applicable to all mortgagees by Massachusetts General Laws Chapter 183, section 67.
  46. Based upon the information contained in Paragraphs 1 through 40, by providing consumers with written documentation that stated or implied that the Corporation was able to lock mortgage rates on behalf of the consumer, when acting in the capacity of a mortgage broker, First Call Mortgage violated the Division's regulation 209 CMR 42.12A(3).
  47. Based upon the information contained in Paragraphs 1 through 40, by providing disclosures to consumers that only lenders are authorized to provide when acting in the capacity of a mortgage broker, First Call Mortgage has violated Massachusetts General Laws chapter 255E, section 2.
  48. Based upon the information contained in Paragraphs 1 through 40, by failing to notify the Commissioner, in writing, at least fifteen days prior to a change in ownership, First Call Mortgage violated the Division's regulation 209 CMR 42.12(3)(b).
  49. Based upon the information contained in Paragraphs 1 through 40, by failing to keep and use its books and records in a manner which would allow the Commissioner to determine whether the Corporation was complying with state and federal laws and regulations, First Call Mortgage has violated the Division's regulations 209 CMR 42.09(1) and 209 CMR 48.03.
  50. Based upon the information contained in Paragraphs 1 through 40, by providing disclosures to consumers that contained language that was false or misleading or had the tendency or capacity to be false or misleading, when acting in the capacity of a mortgage broker, First Call Mortgage is in violation of the Attorney General's regulation 940 CMR 8.06(1).
  51. Based upon the information contained in Paragraphs 1 through 40, the Commissioner has determined that:
    1. First Call Mortgage has engaged in, is engaging in, or is about to engage in, acts or practices which warrant the belief that it is not operating honestly, fairly, soundly and efficiently in the public interest in violation of standards governing the licensing and conduct of a mortgage lender and mortgage broker including, but not limited to, Massachusetts General Laws chapter 255E, the provisions of 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 First Call Mortgage.
  52. Based upon the information contained in Paragraphs 1 through 40, had the facts and conditions found therein existed at the time of First Call Mortgage's original mortgage lender and mortgage broker license application, the Commissioner would have been warranted in refusing to issue such license. Further, the facts and conditions set forth in Paragraphs 1 through 40 present sufficient grounds for the revocation of First Call Mortgage's mortgage lender and mortgage broker licenses pursuant to Massachusetts General Laws chapter 255E, section 6 and the Division's regulation at 209 CMR 42.04(2)(b), 42.07(2)(b), and 42.12A(19).

    ORDER TO CEASE AND DESIST

  53. After taking into consideration the FINDINGS OF FACT and CONCLUSIONS OF LAW stated herein, it is hereby:
  54. ORDERED that First Call Mortgage and any and all officers, members, managers, employees, independent contractors, or agents, operating on behalf of First Call Mortgage, and their successors or assigns, shall immediately cease engaging in the activities of: (a) a mortgage lender and mortgage broker, as those activities are defined under Massachusetts General Laws chapter 255E, section 1, and (b) a mortgage loan originator, as those activities are defined under Massachusetts General Laws chapter 255F, section 1, relative to any residential property in Massachusetts, not otherwise expressly permitted by the terms of this Temporary Order. Therefore, First Call Mortgage 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.
  55. IT IS FURTHER ORDERED that First Call Mortgage, 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.
  56. IT IS FURTHER ORDERED that First Call Mortgage shall immediately place with one or more qualified broker(s) or lender(s), as appropriate based on the status of the application and with no loss to applicants, all of its pending Massachusetts residential mortgage loan applications. It being understood that "no loss to the applicant" shall mean that any loan which may have been closed by First Call Mortgage and remains unfunded, as well as any pending application which has been approved by the Corporation but has not yet closed, shall be placed to a lender willing to fund, or close, the mortgage loan under the same terms and conditions extended by First Call Mortgage. In the event that no such placement can be made, First Call Mortgage shall either independently fund the mortgage loan under such terms and conditions or buy down the mortgage loan offered by the lender so that the applicant does not incur a loss as a result of such placement. First Call Mortgage shall obtain the prior approval of the Commissioner before placing such applications to the qualified lender(s) or broker(s) as appropriate.
  57. IT IS FURTHER ORDERED that as soon as possible, but in no event later than two days after the effective date of this Temporary Order, First Call Mortgage shall submit the following information in writing to the Commissioner:
    1. A detailed record of all pending residential mortgage loan applications, from both the Corporation's lending and its brokering operations, which shall include, but is not limited to, the following: customer name, address, telephone number; all prepaid loan fees submitted by the customer; amount of loan; application status (i.e. filed, submitted to lenders); scheduled closing date; rate lock status; the location of all original open application files; and a list of applicable wholesale lenders. The latter list should include telephone numbers of contact persons familiar with First Call Mortgage's submitted loans.
  58. IT IS FURTHER ORDERED that First Call Mortgage 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 or mortgage broker pursuant to Paragraph 56 of this Temporary Order, a copy of such document, correspondence, or paper relating to the mortgage loan shall be retained in First Call Mortgage's books and records and shall be available to the Commissioner, in their entirety, immediately upon request on the date and time specified by the Commissioner.
  59. 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.
  60. 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 First Call Mortgage 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 24th day of September, 2008

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