By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER AND
MORTGAGE BROKER
LICENSING
Docket No. 2010-336

TEMPORARY
ORDER TO CEASE AND DESIST

AND

NOTICE OF ADMINISTRATIVE
PENALTY

In the Matter of
ADVANCED MORTGAGE SERVICES, LLC
Norwell, Massachusetts

Mortgage Company License No: MC3702


The Commissioner of Banks ("Commissioner") having determined that Advanced Mortgage Services, LLC ("Advanced Mortgage" or the "Company"), located at 335 Washington Street, Norwell, 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 TEMPORARY ORDER TO CEASE AND DESIST AND NOTICE OF ADMINISTRATIVE PENALTY ("Order") pursuant to General Laws chapter 255E, section 7(b) and General Laws chapter 255E, section 11.

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. Advanced Mortgage is, and at all relevant times, has been a limited liability company conducting business in the Commonwealth of Massachusetts. Advanced Mortgage's main office is located at 335 Washington Street in Norwell, Massachusetts.
  3. Advanced 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 MC3702 to Advanced Mortgage to engage in the business of a mortgage broker and a mortgage lender on or about December 21, 2004. License number MC3702 authorized Advanced Mortgage to conduct the mortgage company business from the its main office located at 335 Washington Street in Norwell, Massachusetts.
  4. On or about September 17, 2010, and October 15, 2010, the Division was forwarded two print advertisements ("Advertisements") published by Advanced Mortgage in local publications for seniors in Plymouth and Norfolk Counties. The Advertisements are attached as Exhibit 1 and Exhibit 2. pdf format of amsexhibits10292010.pdf
  5. 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.

  6. 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.

  7. The Division's regulation 209 CMR 42.12A(9) states:

    It is a prohibited act or practice for a mortgage broker to make false promises to influence, persuade or induce a consumer to sign a mortgage loan application or mortgage loan documents.

  8. The Advertisement attached as Exhibit 1 pdf format of amsexhibits10292010.pdf
was titled "Senior Citizens: Federal Government Assistance is Now Available" notified readers that senior citizens who were at least 62 could borrow against the equity in their home and utilize the funds for "just about anything without ever having to repay the debt." The Advertisement also stated that borrowers could "continue living in the[ir] home for the rest of their lives without the burden of making monthly payments," and further notified readers that "there [was] never a risk of losing their home."
  9. The Advertisement failed to describe additional requirements and events which could trigger default and foreclosure, including occupancy requirements and the borrower's obligation to pay real estate taxes, insurance and other payments like utilities.
  10. The Advertisement stated that the program was available "courtesy of this United States Government" and directed the consumer to call Advanced Mortgage's "consumer awareness hotline" for further information regarding participation.
  11. The body of the Advertisement attached as Exhibit 2 pdf format of amsexhibits10292010.pdf
contained the same language as Exhibit 1 pdf format of amsexhibits10292010.pdf
, however was entitled "Senior Citizens: Government Insured Program is Now Available."
  12. Language disclaiming the offer was being issued by a government agency or an affiliate of a government agency was not included in the Advertisement, notwithstanding the representations identified above which indicate a government affiliation.
  13. According to the Division's records, Advanced Mortgage is not affiliated with any government agency.

    CONCLUSIONS OF LAW

  14. Based upon the information contained in Paragraphs 1 through 13, Advanced 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).
  15. Based upon the information contained in Paragraphs 1 through 13, by publishing an Advertisement in the Commonwealth that had the tendency to be false or misleading, including language that could lead the reader to believe that the Advertisement was issued by a government agency, and indicating that the consumer would never risk losing their home Advanced Mortgage has violated Massachusetts General Laws chapter 93A, section 2(a), and the Office of the Attorney General's implementing regulation 940 CMR 8.06(1).
  16. Based upon the information contained in Paragraphs 1 through 13, by printing an Advertisement directed toward Massachusetts consumers that made false promises to influence, persuade or induce a consumer to sign a mortgage loan application, including language that failed to notify targeted consumers of additional eligibility requirements including occupancy and reverse mortgage borrowers continuing obligation to pay including real estate tax and homeowners insurance payments, Advanced Mortgage violated the Division's regulation 209 CMR 42.12A(9).
  17. Based upon the information contained in Paragraphs 1 through 13, the Commissioner has determined that:

    Advanced Mortgage has engaged in, is engaging in, or is about to engage in, acts or practices which warrant the belief that the public interest will be irreparably harmed by delay in issuing an ORDER TO CEASE AND DESIST to Advanced Mortgage.

    ORDER TO CEASE AND DESIST AND NOTICE OF ADMINISTRATIVE PENALTY

  18. After taking into consideration the FINDINGS OF FACT and CONCLUSIONS OF LAW stated herein, it is hereby:
  19. ORDERED that Advanced Mortgage shall cease publishing any Advertisements targeting Massachusetts consumers that contain any representations or statements that could be considered false, misleading, or have the tendency or capacity to be misleading including but not limited to:
    1. Advertisements that contain language that could lead the reader to believe that they are being issued by a government agency; and
    2. Advertisements that have the tendency to make false promises to influence persuade or induce a consumer to sign a mortgage loan application.
  20. IT IS FURTHER ORDERED that within five (5) days of the effective date of this Order, Advanced Mortgage shall submit to the Commissioner a detailed record, prepared as of the date of submission, of all Massachusetts consumers to whom the Company distributed the Solicitation. The records to be produced shall include the consumers' names and addresses.
  21. IT IS FURTHER ORDERED that within twenty (20) days of the effective date of this Order, Advanced Mortgage shall submit a payment of ten thousand dollars ($10,000.00) in satisfaction of an administrative penalty collected in consideration of the Company's engaging in deceptive advertising as evidenced by the Advertisements. Such administrative penalty is imposed pursuant to Massachusetts General Laws chapter 255E, section 11. The Company shall remit payment pursuant to this Paragraph of the Order for the amounts due, payable to the "Commonwealth of Massachusetts," to the Office of the Commissioner of Banks, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118-6400. The Division shall remit the payment for deposit into the General Fund of the Commonwealth. The administrative penalty imposed on Advanced Mortgage as referenced in this Order is subject to review as provided in Massachusetts General Laws chapter 30A. Accordingly, Advanced Mortgage may request a hearing to contest said administrative penalty. Such request for a hearing must be filed in writing within 20 days of Advanced Mortgage's receipt of this Order. If the Company fails to request a hearing within the prescribed time frame pursuant to this Paragraph, the aforementioned administrative penalty shall be deemed final and binding and shall be due and owing to the Commonwealth.
  22. IT IS FURTHER ORDERED that a hearing will be scheduled on this matter to determine whether or not such Order shall become permanent and final only upon receipt of a written request for such a hearing from Advanced Mortgage within twenty (20) days of the effective date of this Order. If no hearing is requested within this twenty (20) day period, this Order shall become permanent and final until it is modified or vacated by the Commissioner.
  23. IT IS FURTHER ORDERED that this 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.
  24. IT IS FURTHER ORDERED that Advanced Mortgage shall review and revise, as necessary, the Company's policies and procedures to ensure that individuals performing on behalf of the Company neither act, nor represent themselves, as a government entity; and
  25. IT IS FURTHER ORDERED that a copy of each advertisement used by Advanced Mortgage shall be retained in the Company's books and records and shall be made available to the Division at its examinations/inspections of Advanced Mortgage.

    GENERAL PROVISIONS

  26. Advanced Mortgage shall revise its advertising practices and procedures to ensure that all solicitations and advertising materials used by the Company do not contain any representations or statements that could be considered false, misleading, or have the tendency or capacity to be misleading.
  27. Advanced Mortgage shall take all necessary steps to ensure that the Advertisements or any similar Advertisement are not published or distributed to consumers in Massachusetts.
  28. Advanced Mortgage shall implement, establish and maintain a system of internal controls to monitor the Company's compliance with the laws and regulations applicable to advertising practices including, but not limited to, the Division's regulations 209 CMR 42.12A, the Office of the Attorney General's regulation 940 CMR 8.00 et seq. Advanced Mortgage shall establish, implement and maintain policies and procedures to ensure that all advertisements are thoroughly reviewed by senior management prior to publication or distribution to consumers.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 29th day of October, 2010

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

This Order was terminated pursuant to a Consent Order on December 13, 2010.