By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER AND
MORTGAGE BROKER
LICENSING
Docket No. 2009-147

CONSENT ORDER


In the Matter of
NEW ENGLAND REGIONAL MORTGAGE CORPORATION
Salem, New Hampshire

Mortgage Company License Nos. MC1221 et al.


WHEREAS, NEW ENGLAND REGIONAL MORTGAGE CORPORATION, Salem, New Hampshire ("New England Regional Mortgage" 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 General Laws chapter 255E, section 7(a), and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER ("Consent Agreement") with representatives of the Division of Banks ("Division") dated March 4, 2010, whereby, solely for the purpose of settling this matter, and without admitting any allegations or implications of fact or the existence of any violation of state or federal laws and regulations governing the conduct and operation of a mortgage lender and mortgage broker, New England Regional Mortgage agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");

WHEREAS, an examination/inspection of New England Regional Mortgage was conducted pursuant to General Laws chapter 255E, section 8, as of December 11, 2008, to assess the Corporation's level of compliance with applicable Massachusetts statutes and the Division's regulations governing the conduct of those engaged in the business of a mortgage lender and mortgage broker in the Commonwealth; and

WHEREAS, the Report of Examination/Inspection (the "Report") issued pursuant to the Division's examination/inspection of New England Regional Mortgage as of December 11, 2008 alleged substantial non-compliance with applicable state and federal statutes, rules, and regulations governing the conduct of those engaged in the business of a mortgage lender and mortgage broker in Massachusetts.

ORDER

NOW COME the parties in the above-captioned matter, the Division and New England Regional Mortgage, and stipulate and agree as follows:

  1. New England Regional Mortgage shall establish, implement, and maintain procedures to ensure compliance with the loan reporting requirements set forth in the Home Mortgage Disclosure Act ("HMDA"), 12 U.S.C. section 2801 et seq., as implemented by Regulations of the Board of Governors of the Federal Reserve System, 12 C.F.R. Part 203 ("Regulation C"). Such procedures shall necessarily require that the Corporation implement internal controls to ensure that, for all HMDA reportable loan applications, New England Regional Mortgage accurately compiles and records all required data in the Corporation's HMDA Loan Application Register ("LAR").
    1. Within thirty (30) days of the effective date of this Consent Order, New England Regional Mortgage shall review for accuracy the HMDA data collected for all Massachusetts residential mortgage loans originated during calendar year 2007, and shall petition the Federal Reserve Board to permit a re-filing of corrected information of all erroneous and/or incomplete data previously submitted on the LAR.
    2. New England Regional Mortgage shall establish, implement, and maintain operating policies and training procedures to ensure that all applicable personnel possess a comprehensive understanding of the HMDA reporting requirements under Regulation C. Such training shall necessarily ensure the proper implementation and execution of the revised practices and procedures adopted by New England Regional Mortgage pursuant to this Section of the Consent Order.
    3. Within thirty (30) days of the effective date of this Consent Order, New England Regional Mortgage shall prepare and submit to the Division a written report detailing the HMDA data that the Corporation petitioned to re-file pursuant to Section 1(a) of this Consent Order.
    4. New England Regional Mortgage agrees to submit a payment in the amount of twenty-five thousand dollars ($25,000.00) in satisfaction of an administrative penalty collected in consideration of the Corporation's failure to comply with the statutes, rules and regulations governing the conduct of those engaged in the business of a mortgage lender in Massachusetts. The administrative penalty shall be satisfied as follows:
      1. Twelve thousand five hundred dollars ($12,500.00) shall be due and payable immediately upon execution of this Consent Order; and
      2. A payment of twelve thousand five hundred dollars ($12,500.00) shall be due and payable by the 30 th day of June, 2010.
    5. New England Regional Mortgage shall remit payment in full of the amount indicated above, payable to the "Commonwealth of Massachusetts," with the executed copy of the Consent Agreement, to the Office of the Commissioner of Banks, One South Station, 3rd Floor, Boston, Massachusetts 02110. The Division shall remit the payment for deposit into the General Fund of the Commonwealth.
  2. New England Regional Mortgage shall cease making, offering, or advertising any reverse mortgage loans on residential property in Massachusetts unless the Corporation obtains prior approval from the Division of the reverse mortgage program pursuant to M.G.L. chapter 167E, section 7.
    1. New England Regional Mortgage shall immediately withdraw its pending application before the Division for approval of the Corporation's reverse mortgage program. Having voluntarily withdrawn the Corporation's application for approval, New England Regional Mortgage will refrain from submitting an application to the Division to obtain approval to make reverse mortgage loans in the Commonwealth for a period of twelve (12) months from the effective date of this Consent Order.
  3. New England Regional Mortgage shall establish, implement, and maintain policies and procedures to ensure that the Corporation is in compliance with the Division's regulation 209 CMR 53.00 et seq. regarding determination and documentation of a borrower's interest when refinancing a home loan that was consummated within 60 months prior to the Corporation's receipt of an application for a new home loan. Such procedures shall ensure that in any transaction in which New England Regional Mortgage is performing in a mortgage lender capacity, the burden is upon New England Regional Mortgage, exclusively, to determine that the refinancing is in the borrower's interest.
    1. Compliance with this Section of the Consent Order shall necessarily require that New England Regional Mortgage establish, implement and maintain procedures to ensure that the Corporation completes a worksheet or other document indicating how the Corporation determined that a refinance loan was in the borrower's interest. Such document shall include all the information required under 209 CMR 53.07 and the language contained therein shall not in any manner shift the burden to the borrower to determine and to demonstrate that the home loan is in the borrower's interest.
  4. New England Regional Mortgage shall establish, implement and maintain procedures to ensure that the Corporation, when acting in the capacity of a mortgage broker, ceases from issuing the "Massachusetts Borrowers Attestation of Tangible Benefits" or any other such documentation indicating that a home loan is in a borrower's interest pursuant to the Division's regulation 209 CMR 53.07. It is understood that when the Corporation brokers a loan subject to the Division's regulations regarding a lender's determination and documentation of borrower's interest, New England Regional Mortgage is not permitted to make an affirmative determination that a home loan is in the borrower's interest; however, the Corporation may request information from a borrower on behalf of the lender or transmit information to the borrower on behalf of the lender.
  5. New England Regional Mortgage shall establish, implement, and maintain procedures to ensure that, when the Corporation is acting in the capacity of a mortgage broker, all consumers receive a loan origination and compensation agreement in accordance with the provisions of the Division's regulation 209 CMR 42.16. For each consumer loan file, a completed copy of the loan origination and compensation agreement shall be retained in the Corporation's books and records, as provided in 209 CMR 42.09(1)(b).
  6. New England Regional Mortgage shall comply with all laws and regulations applicable to its conducting the business of a mortgage lender and mortgage broker, including, but not limited to, Massachusetts General Laws chapters 255E and 255F, and the Division's regulations 209 CMR 41.00 et seq. and 209 CMR 42.00 et seq. Such obligations shall necessarily include the duty to address and correct, within thirty (30) days of receipt of the Report, all violations and areas of concern addressed in the Report.
    1. Within twenty (20) days of New England Regional Mortgage's receipt of the Report, the Corporation shall submit to the Commissioner a written response that addresses each of the violations and areas of concern specified in the Report. The written response shall describe the revised policies and procedures adopted by New England Regional Mortgage to implement all corrective actions set forth in: (i) the "Examiner's Comments and Conclusions" section of the Report and (ii) the provisions of this Consent Order;
    2. Within twenty (20) days from the effective date of this Consent Order, New England Regional Mortgage shall establish, implement, and maintain quality control standards which provide for a loan review process to assess the Corporation's compliance with: (a) the statutes, rules, regulations, regulatory bulletins, and other relevant provisions of law applicable to those engaged in the business of a mortgage lender and mortgage broker in Massachusetts and (b) the provisions of this Consent Order. Such quality control standards shall be designed to prevent the recurrence of the violations addressed in the Report; and
    3. New England Regional Mortgage shall establish, implement, and maintain procedures and policies to ensure that all applicable staff persons receive adequate instruction and ongoing, periodic training to ensure proper implementation and execution of the revised practices and procedures implemented pursuant to this Consent Order.
  7. On the thirtieth (30 th) day after the end of each calendar quarter following the date of this Consent Order, New England Regional Mortgage shall furnish written progress reports to the Division, which shall address and include the following:
    1. A description of the form, content, and manner of any actions taken to address each Section of this Consent Order and the results thereof; and
    2. Written findings prepared by New England Regional Mortgage detailing a review of management's and staff persons' adherence to the policies, programs, and procedures adopted pursuant to this Consent Order and to applicable statutes, regulations, and rules, as well as a description of any operational changes implemented during such quarter which are intended to improve New England Regional Mortgage's compliance condition in Massachusetts and the results thereof.
  8. The reporting requirement to the Division referenced in Section 7 of this Consent Order shall remain in effect and shall not be amended or rescinded without the prior written modification, termination, or suspension of the applicable provision of this Consent Order from the Commissioner.
  9. Nothing in this Consent Order shall be construed as permitting New England Regional Mortgage to violate any law, rule, regulation, or regulatory bulletin to which New England Regional Mortgage is subject.
  10. In consideration of the foregoing Consent Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke New England Regional Mortgage's mortgage lender and mortgage broker licenses under General Laws chapter 255E, section 6, while this Consent Order is in effect.
  11. Failure to comply with the terms of this Consent Order shall constitute grounds for license suspension and/or revocation, or other formal regulatory action pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
  12. This Consent Order shall become effective immediately upon the date of its issuance.
  13. 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 Consent Order of a court of competent jurisdiction.
  14. This Consent Order and the Consent Agreement are the complete documents representing the resolution of this matter. There are no other agreements between the Division and New England Regional Mortgage.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 4th day of March, 2010

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

This Consent Order was superseded and replaced by a Consent Order on January 26, 2012.