By the Division of Banks




COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER AND
MORTGAGE BROKER
LICENSING
Docket No. 2009-012-CO

CONSENT ORDER


In the Matter of
DYNAMIC CAPITAL MORTGAGE, INC.
Brookline, Massachusetts

Mortgage Company License No. MC2201


WHEREAS, DYNAMIC CAPITAL MORTGAGE, INC., located at 1371 Beacon Street, Suite 301, Brookline Massachusetts, ("Dynamic Capital" or the "Corporation"), a licensed mortgage lender and mortgage broker under Massachusetts General Laws chapter 255E, section 2, has been advised of its right to Notice and Hearing pursuant to Massachusetts General Laws chapter 30A, section 10, 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 August 7 th, 2009, whereby, solely for the purpose of settling this matter, Dynamic Capital agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");

WHEREAS, 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;

WHEREAS, Dynamic Capital is, and at all relevant times has been, a Massachusetts corporation doing business in the Commonwealth. Dynamic Capital's main office is located at 1371 Beacon Street, Suite 301, Brookline, Massachusetts;

WHEREAS, on January 12, 2009 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 Dynamic Capital 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 "2009 examination/inspection");

WHEREAS, the Division's Report of Examination/Inspection on Consumer Compliance (the "Report"), which was issued to Dynamic Capital on July 16, 2009, presented the findings of the 2009 examination/inspection and alleged 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 broker and mortgage lender in Massachusetts;

WHEREAS, the parties now seek to resolve by mutual agreement, the matters identified in the Report;

WHEREAS, without this Consent Order constituting an admission by Dynamic Capital to any allegations made or implied by the provisions of the Report; solely for the purpose of settlement of all alleged violations without protracted administrative proceedings and judicial review, Dynamic Capital hereby waives its right to appeal the findings of the Report and affirms that it is willing to take all necessary action as set forth in this Consent Order.

ORDER

NOW COME the parties in the above-captioned matter, the Division and Dynamic Capital, and stipulate and agree as follows:

  1. Within five (5) business days of the execution of the Consent Agreement, Dynamic Capital will cease originating or accepting, either directly or indirectly, any additional Massachusetts residential mortgage loan applications, or otherwise engaging in the mortgage broker or mortgage lender business, as those terms are defined under General Laws chapter 255E, section 1, except for the limited purposes authorized in this Consent Order.
  2. Dynamic Capital shall continue to fully process the Massachusetts residential mortgage loan applications which are pending in the Corporation's loan application portfolio as of the date of the execution of the Consent Agreement.
  3. Within five (5) days of the execution of the Consent Agreement, Dynamic Capital shall submit the following information in writing to the Commissioner: 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 will include name and telephone numbers of contact persons familiar with Dynamic Capital's submitted loan applications.
  4. Dynamic Capital agrees to cease all Massachusetts residential mortgage business operations within one hundred and twenty (120) days of the effective date of this Consent Order.
    1. For those Massachusetts loan applications that remain pending in the Corporation's pipeline at the end of the one hundred and twenty (120) day period referenced above due primarily to the fault of the Corporation, Dynamic Capital agrees to place said loan applications 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. It is understood that "no loss to the applicant" shall mean that any loan which may have been closed by Dynamic Capital and remains unfunded, as well as any pending application which has been approved by the Corporation but has not yet closed due primarily to the fault of the Corporation, shall be placed to a lender willing to fund, or close, the mortgage loan under the same terms and conditions extended by Dynamic Capital. In the event that no such placement can be made, Dynamic Capital 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. Dynamic Capital shall obtain the prior approval of the Commissioner before placing such applications to the qualified lender(s) or broker(s) as appropriate.
    2. For any Massachusetts loan applications that remain pending in the Corporation's pipeline at the end of the one hundred and twenty (120) day period referenced above due to no fault of the Corporation, the Corporation shall report to the Commissioner on a monthly basis regarding the status of such pending loan applications and shall use its best efforts to close such pending loan applications as expeditiously as possible without harm to the Massachusetts consumer. Such monthly report shall include the information detailed in Paragraph 3 above.
  5. Immediately upon the cessation of its Massachusetts residential mortgage business as described in Paragraph 4 of this Consent Order, Dynamic Capital will surrender its Massachusetts mortgage company license MC2201 by: (a) returning the original license certificate to the Division at One South Station, 3 rd Floor, Boston, Massachusetts 02110; and (b) submitting a " Request to Surrender" filing to the Division through the Nationwide Mortgage Licensing System (NMLS).
  6. Dynamic Capital shall retain all Massachusetts mortgage loan application files, and the disclosures, correspondence, papers, and records relating to the loan, for a minimum of three years after final payment is made on the mortgage loan or the mortgage loan is sold, whichever occurs first. Such records are stored electronically by Dynamic Capital, as approved by the Commissioner. Such records shall be made available to the Commissioner, in their entirety, immediately upon the request of the Commissioner.
  7. Dynamic Capital will refrain from submitting an application to obtain a mortgage broker and/or mortgage lender license from the Commissioner for a period of thirty-six (36) months from the effective date of this Consent Order.
  8. To the extent that Dynamic Capital or any of its officers or directors, or their successors or assigns, wish to resume business as a mortgage lender and/or mortgage broker under General Laws chapter 255E at the expiration of the 36-month term as set forth above, Dynamic Capital and/or such individual, as applicable, shall be required to submit a completed application to obtain the relevant license(s) from the Commissioner. Unless the Commissioner, in his sole discretion, agrees to accept such an application earlier, Dynamic Capital agrees not to submit such an application until the expiration of the 36-month term. The Commissioner shall have all of the discretion set forth within General Laws chapter 255E, section 4 and the Division's regulation 209 CMR 42.00 et seq. in determining whether to issue a license to Dynamic Capital to conduct the licensed business, provided however, that any such application shall not be denied solely on the basis of this Consent Order.
  9. The provisions of this Consent Order shall not be construed to bar or prevent Dynamic Capital's officers, directors, or employees currently licensed as mortgage loan originators under General Laws chapter 255F from acting in the capacity of a licensed mortgage loan originator and/or accepting employment as a licensed mortgage loan originator with another licensed mortgage entity. Additionally, the provisions of this Consent Order shall not be construed to bar or prevent the Corporation's officers, directors, or employees that currently do not maintain a mortgage loan originator license pursuant to General Laws chapter 255F from applying for a mortgage loan originator license under General Laws chapter 255F. The Commissioner will be assumed to have all of the discretion set forth within General Laws chapter 255F, section 4 in determining whether to issue a mortgage loan originator license to those officers, directors, or employees that apply for a mortgage loan originator license pursuant to General Laws chapter 255F, provided however, that any such application shall not be denied on the basis of this Consent Order.
  10. Dynamic Capital's officers and directors agree that in the event that they accept employment as a mortgage loan originator with another entity licensed by the Division, they shall be prohibited for a period of thirty-six (36) months from the effective date of this Consent Order from taking an ownership position in such licensee and from participating, in any manner, in the responsibilities or duties of a control person of such licensee. For the purposes of this Consent Order, "control" shall be defined as the power, directly or indirectly, to direct the management or policies of a company, whether through ownership of securities, by contract, or otherwise.
  11. Within thirty (30) days of receipt of the relevant invoice from the Division, Dynamic Capital shall submit payment in full for the amount owed for the costs of the Division's 2009 examination/inspection. The payment shall be made payable to the "Commonwealth of Massachusetts" and mailed to Division of Banks, Commonwealth of Massachusetts, P.O. Box 3952, Boston, Massachusetts 02241-3952.
  12. The provisions of this Consent Order shall not limit, estop, or otherwise prevent any other state agency or department, from taking any other action affecting Dynamic Capital and/or any of its officers, directors, or managers.
  13. This Consent Order shall become effective immediately upon the date of its issuance.
  14. The provisions of this Consent Order shall be binding upon Dynamic Capital and its officers, directors, employees, agents, and their successors and assigns.
  15. In accordance with the terms of the Consent Agreement entered by Dynamic Capital and the Commissioner, Dynamic Capital has waived all rights of appeal that it may have.
  16. The provisions of this Consent Order shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this Consent Order shall have been modified, terminated, suspended, or set aside by the Commissioner or upon an order of a court of competent jurisdiction.
  17. This Consent Order and the Consent Agreement are the complete documents representing the resolution of this matter. There are no other agreements, promises, representations, or warranties other than those set forth in this Consent Order, which replaces and supersedes all prior agreements between Dynamic Capital and the Commissioner.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 7th day of August, 2009

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