By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LOAN
ORIGINATOR LICENSING
Docket No. 2009-015-MLO

FINDINGS OF FACT AND TEMPORARY
ORDER TO CEASE AND DESIST


In the Matter of
NATALIE VLASOVA

Mortgage Loan Originator License No. MLO42121


The Commissioner of Banks ("Commissioner") having determined that NATALIE VLASOVA., has engaged in, or is engaging in, or is about to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 255F, and applicable regulations found at 209 CMR 41.00 et seq., hereby issues the following FINDINGS OF FACT AND TEMPORARY ORDER TO CEASE AND DESIST ("Temporary Order") pursuant to General Laws chapter 255F, section 8(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 loan originator in Massachusetts pursuant to Massachusetts General Laws chapter 255F, section 2.
  2. The Division, through the Commissioner, also 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 and its implementing regulation at 209 CMR 42.00 et seq.
  3. Mortgage loan originators in Massachusetts are licensed and regulated under Massachusetts General Laws chapter 255F, which is administered and enforced by the Commissioner.
  4. Natalie Vlasova is licensed by the Commissioner as a mortgage loan originator under Massachusetts General Laws chapter 255F, section 2. According to records maintained on file with the Division, the Commissioner initially issued a mortgage loan originator license, license number MLO42121 to Natalie Vlasova to engage in the business of a mortgage loan originator on or about September 3, 2008.
  5. According to the Division's records, at all relevant times, Natalie Vlasova was employed as a mortgage loan originator by Dynamic Capital Mortgage, Inc., ("Dynamic Capital" or the "Corporation").
  6. Dynamic Capital 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 issued a mortgage company license, license number MC2201 to Dynamic Capital to engage in the business of a mortgage lender and mortgage broker on or about August 8, 2002. License number MC2201 authorized Dynamic Capital to conduct the mortgage company business from the Corporation's main office located at 1371 Beacon Street, Suite 301, Brookline, Massachusetts.
  7. 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.
  8. 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").
  9. The Division's Report of Examination/Inspection on Consumer Compliance (the "Report"), presented the findings of the 2009 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 broker and mortgage lender in Massachusetts.
  10. During the 2009 examination/inspection of Dynamic Capital, the Division's examiners determined that Natalie Vlasova, while employed at Dynamic Capital as a mortgage loan originator, prepared mortgage loan applications on behalf of borrowers over a period of three years for the purchase and/or refinance of various residential properties as defined pursuant to Massachusetts General Laws chapter 255E, section 1, and Massachusetts General Laws chapter 255F, section 1 (hereinafter referred to as "multi-family properties"), that were ultimately converted into condominium units. A review of the loan files originated by Natalie Vlasova indicate that income information, Verification of Deposit ("VOD") Forms, Verification of Employment ("VOE") forms, property valuation reports and employment information maintained in the loan files and reviewed by the Division's examiners reflected information that appeared to be inaccurate and/or misleading.

    Unfair or Deceptive Acts and Practices

    a. Deceptive Business Practices

  11. 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.

  12. The Division's regulation 209 CMR 41.09(1) states:

    It is a prohibited act or practice for a Licensee to engage in conduct prohibited under 2 09 CMR 42.12A.

  13. The Division's regulation 209 CMR 42.12A(8), 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.

  14. Massachusetts General Laws chapter 255F, section 11(a) states;

    Whenever the commissioner finds that any licensee has violated this chapter or any rule or regulation promulgated thereunder, or any other law of the commonwealth applicable to the conduct of a mortgage loan originator on residential property in the commonwealth, the commissioner may, by order, in addition to any other action authorized under this chapter or any rule or regulation made thereunder, impose a penalty upon the person which shall not exceed $5,000 for each violation up to a maximum of $100,000 for such violation plus the costs of investigation. The commissioner may impose a penalty which shall not exceed $5,000 for each violation of this chapter, or any rule or regulation promulgated hereunder, by a person other than a licensee, plus the costs of investigation.

  15. A review of loan files originated by Natalie Vlasova indicate, that while employed as a loan originator at Dynamic Capital, Natalie Vlasova prepared multiple loan applications on behalf of several borrowers connected through a realty company, over a three year period for the purchase and refinance of numerous multi-family properties located in the Dorchester/Roxbury neighborhoods of Boston, Massachusetts. A review of the documents maintained in the loan files revealed that borrowers, sellers, real estate agents and family members involved in the transactions appeared to work at the same realty company or were representing themselves to be employed by the same restaurant in Dorchester. These individuals, hereinafter referred to as Borrower A, Borrower B, Borrower C and Borrower D, acting in various capacities, were involved in the purchase of multi-family properties and conversion of those properties to condominium units and subsequent sale of the units at what appear to be inflated values. Dynamic Capital was the mortgage lender of record in several transactions involving both the initial purchase of the multi-family properties as well as the subsequent purchases and refinances of individual condominium units. Additionally, all mortgage loans were 100% loan to value and often one borrower, Borrower A, would appear as the attorney in fact for other borrowers at settlement. A review of registry records reveals that properties were converted and sold several times and ultimately subject to foreclosure proceedings as fully described in the Report.
  16. Dynamic Capital was the mortgage lender of record in several transactions involving both the purchase of the multi-family properties as well as the subsequent purchases and refinances of individual condominium units. The loan originator of record on all of the relevant loan files was Natalie Vlasova. Examples include but are not limited to the following:

    (a) Borrower A, Borrower B & Loan Originator: Natalie Vlasova - Property Address: Esmond Street Dorchester, Massachusetts

    1. A review of loan files and registry records indicate that the seller of record purchased the multi-family property at a foreclosure sale for $285,000 on August 1, 2006 and subsequently sold the property to a borrower ("Borrower A") on October 2, 2006 for $540,000.
    2. A review of registry records indicates that a Master Deed creating a condominium with four units was recorded on behalf of Borrower A on or around October 12, 2006, approximately ten (10) days after the initial purchase of the property.
    3. Borrower A refinanced one unit, Unit 2, of the condominium obtaining a loan in the amount of $197,250 on November 29, 2006 with Dynamic Capital as the lender of record. Borrower A received approximately $79,924.06 in cash at settlement.
      1. The loan application taken on or around November 14, 2006, prepared by Natalie Vlasova, as the loan originator of record, indicated that Borrower A earned approximately $9,760 monthly or $117,000 annually as a real estate agent. The loan application noted that the borrower maintained two accounts at a regional bank and noted the account numbers on the loan application.
      2. Verification of Deposit Forms ("VOD") maintained in the loan file indicate that the borrower maintained three accounts at a regional bank, two accounts were in the name of Borrower A and a management company jointly and one account was maintained by Borrower A solely.
      3. One of the two account numbers noted on the loan application was not referenced on the VOD's maintained in the loan file and appeared to be an unrelated fourth account.
    4. Borrower A sold the remaining three units to one borrower ("Borrower B"), in three separate transactions, on November 14, 2006 (Unit 4), November 16, 2006 (Unit 1) and November 30, 2006 (Unit 3). The three units were sold to Borrower B for $182,000, $260,000 and $175,000 respectively.
    5. Borrower B purchased the fourth unit, Unit 2 for $260,000 from Borrower A on or around February 17, 2007 approximately three months after Borrower A refinanced Unit 2 from which Borrower A received approximately $79,924.06 in cash at settlement.
    6. Documents retained in the loan files maintained by Dynamic Capital indicate that Borrower B applied for financing from Dynamic Capital for at least one of the three units purchased, Unit 4, however, a purchase and sale agreement for one of the remaining units, Unit 3, was maintained in the loan file. Natalie Vlasova was the loan originator of record.
    7. All four units purchased by Borrower B were ultimately foreclosed upon in 2007 and 2008 and thereafter purchased by a third party.
      1. On May 26, 2009, Unit 3 was sold to a third party for $30,000.
      2. On May 1, 2009, Unit 4 was sold to a third party for $40,000.
      3. On July 17, 2008, Unit 2 was sold to a third party for $95,000.
      4. On April 9, 2008, Unit 1 was sold to a third party for $30,000.

    (b) Borrower A & Loan Originator: Natalie Vlasova - Property Address: Hawthorne Street, Roxbury, Massachusetts

    1. A review of loan files and registry records indicate that Borrower A purchased the multi-family property with Dynamic Capital as the lender of record on December 22, 2006 for $420,000. Copies of the loan documents indicate that the borrower had applied for 100% financing through a stated income loan program.
      1. A loan application dated November 13, 2006 and prepared by Natalie Vlasova, as the loan originator of record indicated that the borrower earned approximately $13,000 monthly or $156,000 annually as a real estate agent. The loan application referenced three accounts maintained by the borrower at a regional bank.
        1. The loan application prepared by Natalie Vlasova for the purchase of Hawthorne Street was taken within a day of the application prepared by Natalie Vlasova for the refinance of the Esmond Street condominium unit as referenced in Paragraph 16(a)(iii)(a). However, the income noted on the purchase money application for Hawthorne Street was reflected as $13,000 monthly or $156,000 annually and the refinance loan application for Unit 2, of the Esmond Street Condominium noted the income as $9,760 monthly or $117,000, a difference of $39,000 annually.
      2. The VOD's maintained in the loan file for the refinance of Unit 2 of the Esmond Street Condominium and referenced in Paragraph 16(a)(iii)(b) of this Temporary Order, were maintained in the loan file for the purchase of the Hawthorne Street property by Borrower A.
    2. Documents retained in the loan file indicate that Borrower A had contributed approximately $21,000 as a down payment for the purchase of the property.
    3. Settlement documents retained in the file indicate that Borrower A ultimately received approximately $24,139 in cash back at settlement.
    4. On or around May 16, 2007, Borrower A converted the property into three condominium units and sold the condominium units for $320,000, $212,000 and $325,000 between May 16, 2007 and July 2007.

    (c) Borrower C & Loan Originator: Natalie Vlasova - Property Address: Waumbeck Street, Dorchester, Massachusetts

    1. A review of loan files and registry records indicate that Borrower C purchased a condominium unit, Unit 2, for $280,000 on March 29, 2007, with Dynamic Capital as the lender of record. Borrower A signed all settlement documents as the attorney in fact for Borrower C.
    2. A loan application prepared on or around March 5, 2007 by Natalie Vlasova as the loan originator of record indicated that Borrower C and a co-borrower noted on the loan application both resided in Maine. Borrower C and the co-borrower appear to be related to Borrower A or they share the same last name. The application noted that Borrower C was employed as a product manager for approximately one month at an establishment in Dorchester, Massachusetts. Borrower C's employer was also the seller of record of the subject property, and co-owner of the establishment that Borrower C was employed at.
      1. The loan application prepared by Natalie Vlasova, indicated that Borrower C's monthly income was $10,000 monthly or $120,000 annually. The loan application noted assets in the form of a bank account with the same account information as that noted in Borrower A's refinance of Unit 2, of the Esmond Street Condominium and referenced in Paragraph 16(a)(iii)(b) of this Temporary Order. In addition, the assets also noted a vested interest in a retirement account that was determined to be the co-borrower's retirement account as evidenced by a retirement statement maintained in the loan file.
        1. Subsequent applications retained in the loan file removed the co-borrower from the loan application however the final loan application included the retirement income as an asset.
      2. A VOD maintained in the loan file was dated March 2, 2007 a date prior to the application date and the VOD referenced an account number that was inconsistent to that noted on the application. The VOD appeared to have been returned by the bank on March 21, 2007.
      3. A verbal verification of employment ("VOE") maintained in the loan file was completed on April 2, 2007 four days after settlement and indicated that the borrower had been employed since April 1, 2007, a date subsequent to the settlement date.
    3. According to records maintained at the registry of deeds, Borrower C sold Unit 2 on July 2, 2008 for $350,000, at an apparent increase in value of $70,000 over a 16-month period.

    (d) Borrower D and Loan Originator: Natalie Vlasova - Property Address: Waumbeck Street, Dorchester, Massachusetts

    1. A review of loan files and registry records indicate that Borrower D purchased one condominium unit, Unit 3, for $250,000 on March 29, 2007, with Dynamic Capital as the lender of record. Borrower A signed all settlement documents as the attorney in fact for Borrower D.
    2. A loan application prepared on or around March 5, 2007 by Natalie Vlasova as the loan originator of record, indicated that Borrower D was employed as an Assistant Manager for approximately two years at an establishment in Dorchester, Massachusetts. This same establishment was also listed as the employer for Borrower C.
    3. Borrower D's employer was also the seller of record and co-owner of the establishment in Dorchester. The loan application noted that the Borrower D held a second job as a self-employed bartender.
      1. The loan application prepared by Natalie Vlasova, indicated that Borrower D's monthly income was $2,083 with commissions of $1,250 and other income of $1,900 from a second job for a total of $5,233 monthly or $67,796 annually. The loan application noted a bank account as an asset however, failed to include an account number.
      2. A VOD located in the loan file and requested by Natalie Vlasova on March 5, 2007, referenced an account number that was the same account number that was noted on Borrower A's loan file refinancing of Unit 2 of the Esmond Street Condominium as noted in Paragraph 16(a)(iii)(b) of this Temporary Order. The completed VOD appeared to have been returned by the bank on March 21, 2007.
      3. A verbal verification of employment ("VOE") maintained in the loan file was completed on April 2, 2007 four days after settlement and noted that the borrower had been employed for two years.
    4. According to records maintained at the registry of deeds, Borrower D sold the condominium unit on August 5, 2008 for $360,000, at an apparent increase in value of $110,000 over a 17-month period.

    (e) Borrower E, Borrower A and Loan Originator: Natalie Vlasova - Property Address: Boyd Street, Dorchester, Massachusetts

    1. A review of loan files and registry records indicate that Borrower E purchased a multi-family property at a foreclosure sale for $377,000 on June 1, 2007. The lender of record for the mortgage recorded simultaneously with the deed was Dynamic Capital. Borrower A signed the mortgage as attorney in fact for Borrower E.
    2. A review of registry records indicates that Borrower E converted the property into a condominium on or around June 29, 2007, and the Master Deed was recorded with the registry of deeds on July 17, 2007.
    3. Books and records reviewed by the Division's examiners during the 2009 examination/inspection revealed that Borrower A purchased one unit, Unit 3 on or around August 31, 2007 for $280,000.
      1. A loan application prepared by Natalie Vlasova as the loan originator of record, noted that Borrower A earned $9,000 monthly or $108,000 annually as a real estate manager, other income for a second job at the same realty company that Borrower A was a manager at was noted as $5,000 monthly or $60,000 annually for total annual income of $168,000. Registry records indicate that Dynamic Capital was the lender of record.
    4. A certificate of entry, and foreclosure deed evidencing foreclosure proceedings of Unit 3 were filed at the registry of deeds on October 20, 2008. On January 23, 2009, the Unit was sold to a third party for $56,650.

      Dynamic Capital knew or should have known that information collected by the Corporation during the processing and/or underwriting of the aforementioned mortgage loans would be relied upon by the mortgage lender, financial institution or investor to which the mortgage loans were brokered and/or sold by Dynamic Capital.

  17. Natalie Vlasova, as a mortgage loan originator acting on behalf of Dynamic Capital, should have known that information collected by the her as the mortgage loan originator of record, during the processing and/or underwriting of the mortgage loans would be relied upon by the mortgage lender, financial institution or investor to which the mortgage loans were brokered and/or sold by Dynamic Capital.

    CONCLUSIONS OF LAW

  18. Based upon the information contained in Paragraphs 1 through 17, Natalie Vlasova has failed to demonstrate and maintain the character, reputation, integrity, and general fitness that would warrant the belief that Natalie Vlasova, as a licensed mortgage loan originator will act honestly, fairly, and soundly in the public interest in violation of Massachusetts General Laws chapter 255F, section 4 and the Division's regulations 209 CMR 41.03(2)(b).
  19. Based upon the information contained in Paragraphs 1 through 17, by submitting misleading and/or inaccurate information to mortgage lenders, financial institutions or investors to whom Dynamic Capital brokered and/or sold mortgage loans to Natalie Vlasova acting as a loan originator on behalf of Dynamic Capital, has violated Division's regulation 209 CMR 41.09(1), 209 CMR 42.12A(8) and Massachusetts General Laws chapter 93A, section 2(a).
  20. Based upon the information contained in Paragraphs 1 through 17, by falsifying borrowers' income information on Uniform Residential Loan Applications submitted in connection with residential mortgage transactions, Natalie Vlasova has violated the Division's regulation 209 CMR 41.09(1), 209 CMR 42.12A(8) and Massachusetts General Laws chapter 93A, section 2(a).
  21. Based upon the information contained in Paragraphs 1 through 17, the Commissioner has determined that:
    1. Natalie Vlasova 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 loan originator including, but not limited to, the provisions of the Division's regulations at 209 CMR 41.00 et seq.; and
    2. The public interest will be irreparably harmed by delay in issuing an ORDER TO CEASE AND DESIST to Natalie Vlasova.
  22. Based upon the information contained in Paragraphs 1 through 17, had the facts and conditions found therein existed at the time of Natalie Vlasova's original mortgage loan originator 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 17 present sufficient grounds for the revocation of Natalie Vlasova's mortgage loan originator license pursuant to Massachusetts General Laws chapter 255F, section 7 and the Division's regulation at 209 CMR 41.04(2)(c)(1), 209 CMR 41.04(2)(c)(2) and 209 CMR 41.04(2)(c)(3).

    ORDER TO CEASE AND DESIST

  23. After taking into consideration the FINDINGS OF FACT and CONCLUSIONS OF LAW stated herein, it is hereby:
  24. ORDERED that Natalie Vlasova shall immediately cease engaging in the activities of 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, Natalie Vlasova 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.
  25. 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.
  26. IT IS FURTHER ORDERED that this Temporary Order shall not be construed as approving any act, practice, or conduct not specifically set forth herein which was, is, or may be in violation of relevant state or federal laws and regulations.
  27. 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 Natalie Vlasova 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 16th day of July, 2009

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

This Order was terminated pursuant to a Consent Order on January 4, 2010.