By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER
LICENSING
Docket No. 2010-305

CONSENT ORDER

In the Matter of
E MORTGAGE MANAGEMENT, LLC
Haddon Township, New Jersey

Mortgage Lender License Nos. ML3301 et al.


WHEREAS, E MORTGAGE MANAGEMENT, LLC, Haddon Township, New Jersey ("E Mortgage Management" or the "Company"), a licensed mortgage lender under Massachusetts General Laws chapter 255E, section 2, has been advised of its right to Notice and Hearing pursuant to Massachusetts 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 November 9, 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, E Mortgage Management agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");

WHEREAS, an examination/inspection of E Mortgage Management was conducted pursuant to Massachusetts General Laws chapter 255E, section 8, as of January 25, 2010, to assess the Company'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 in the Commonwealth; and

WHEREAS, the Report of Examination/Inspection ("Report") issued pursuant to the Division's examination/inspection of E Mortgage Management as of January 25, 2010 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 in Massachusetts.

ORDER

NOW COME the parties in the above-captioned matter, the Division and E Mortgage Management, and stipulate and agree as follows:

  1. E Mortgage Management shall cease conducting business with any individuals who engage in the activities of a Mortgage Loan Originator, as that term is defined under Massachusetts General Laws chapter 255F, section 1, regarding residential property located in Massachusetts, who are not duly licensed as a mortgage loan originators under M.G.L. chapter 255F and properly sponsored by E Mortgage Management through the Nationwide Mortgage Licensing System (NMLS).
    1. E Mortgage Management agrees to pay seventy-eight thousand dollars ($78,000.00) in satisfaction of an agreed upon administrative penalty collected in consideration of the Company's conducting business with mortgage loan originators who did not hold an active mortgage loan originator license. E Mortgage Management 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, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118.
  2. E Mortgage Management shall establish, implement and maintain procedures to ensure that the Company does not contract for or impose late charges that are in excess of the amount permitted under Massachusetts General Laws chapter 183, section 59. E Mortgage Management shall review and revise as necessary all documentation containing provisions referencing late payment charges to ensure that such provisions are in compliance with Massachusetts General Laws chapter 183, section 59.
    1. E Mortgage Management will conduct a review of all Massachusetts loans closed since January 25, 2007 and determine whether late charges were assessed by the Company or by the entities to whom the notes were sold (the Assignees), and shall reimburse all consumers from whom a late charge was collected that was in excess of three percent of the amount of principal and interest overdue. The amount of such reimbursements shall equal the amounts collected as late charges that were in excess of the amount allowed by Massachusetts General Laws chapter 183, section 59. Evidence of any reimbursements will be submitted to the Division stating the consumer's name, the date of the loan and loan number, the amount reimbursed, the check number, and certified mail receipts to illustrate the consumers' receipt of the reimbursements.
  3. E Mortgage Management shall establish, implement, and maintain policies and procedures to ensure that the Company 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 Company's receipt of an application for a new home loan. Such procedures shall ensure that the burden is upon E Mortgage Management, 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 E Mortgage Management establish, implement and maintain procedures to ensure that the Company completes a worksheet or other document indicating how the Company 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. E Mortgage Management shall establish, implement, and maintain procedures to ensure that each mortgage loan originator employed by or associated with the Company discloses his/her Massachusetts Mortgage Loan Originator license number to all consumers, in writing, at the time a fee is paid or a mortgage loan application is accepted, as required under the Division's regulation 209 CMR 41.10.
  5. E Mortgage Management shall establish, implement, and maintain procedures to ensure that the Company discloses its license type and number to all consumers in writing at the time a fee is paid or a mortgage loan application is accepted.
  6. E Mortgage Management shall establish, implement, and maintain procedures to ensure that the Company refrains from providing consumers with the Loan Origination and Compensation Agreement (LOCA), as the LOCA is to be issued exclusively by the mortgage broker in the residential mortgage loan transaction.
  7. E Mortgage Management shall establish, implement, and maintain procedures to ensure that all consumers receive a Notice of Privacy Policies and Practices in accordance with, and in the form required by, the Federal Trade Commission's Regulation 16 CFR 313. For each consumer loan file, a copy of the Notice of Privacy Policies and Practices shall be retained in the Company's books and records as evidence of compliance.
  8. E Mortgage Management shall establish, implement, and maintain procedures to ensure that the Company timely files Quarterly Reports with the Commissioner.
  9. E Mortgage Management shall comply with all laws and regulations applicable to its conducting the business of a mortgage lender, 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 twenty days of receipt of the Report, all violations and areas of concern addressed in the Report.
    1. Within twenty days of E Mortgage Management's receipt of the Report, the Company 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 E Mortgage Management 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 thirty days of the effective date of this Consent Order, E Mortgage Management shall establish, implement, and maintain quality control standards which provide for a loan review process to assess the Company's compliance with: (i) the statutes, rules, regulations, regulatory bulletins, and other relevant provisions of law applicable to those engaged in the business of a mortgage lender in Massachusetts, and (ii) 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. E Mortgage Management 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.
  10. On the thirtieth day after the end of each calendar quarter following the date of this Consent Order, E Mortgage Management 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 E Mortgage Management 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 E Mortgage Management's compliance condition in Massachusetts, and the results thereof.
  11. The reporting requirement to the Division referenced in Section 10 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.
  12. Nothing in this Consent Order shall be construed as permitting E Mortgage Management to violate any law, rule, regulation, or regulatory bulletin to which E Mortgage Management is subject.
  13. In consideration of the foregoing Consent Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke E Mortgage Management's mortgage lender licenses under Massachusetts General Laws chapter 255E, section 6, while this Consent Order is in effect.
  14. Failure to comply with the terms of this Consent Order shall constitute grounds for license suspension and/or revocation, or other formal regulatory actions pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
  15. This Consent Order shall become effective immediately upon the date of its issuance.
  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 between E Mortgage Management and the Commissioner.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 9th day of November, 2010

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