By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE BROKER
LICENSING
Docket No. 2010-076

CONSENT ORDER


In the Matter of
FMC GROUP, LLC
Needham, Massachusetts


WHEREAS, FMC GROUP, LLC, Needham, Massachusetts ("FMC Group" or the "Company") entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER ("Consent Agreement") with representatives of the Division of Banks ("Division") dated July 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 broker, FMC Group agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");

WHEREAS, an examination/inspection of FMC Group was conducted pursuant to General Laws chapter 255E, section 8, as of January 21, 2009, 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 broker in the Commonwealth; and

WHEREAS, the Report of Examination/Inspection (the "Report") issued pursuant to the Division's examination/inspection of FMC Group as of January 21, 2009 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 broker in Massachusetts.

ORDER

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

  1. FMC Group shall undertake a review of the license requirements applicable to mortgage brokers operating in Massachusetts, as set forth by statute, regulations, and regulatory bulletins, for maintaining an office location(s) in addition to FMC Group's main office location. With FMC Group's written response to the Division's Report, FMC Group shall notify the Division of all office locations from which FMC Group will conduct the mortgage broker business and shall file all required information with the Division's licensing department for the purpose of obtaining an additional license for any additional office locations.
    1. FMC Group's written response to the Division's Report shall also describe the record keeping policies and procedures to be established and implemented by FMC Group, setting forth the location and format of how the books, records, and files of the mortgage broker business will be maintained in accordance with the Division's regulations 209 CMR 42.09 and 209 CMR 48.00 et seq.
  2. FMC Group shall cease engaging directly or indirectly in the business of a mortgage broker for residential property located in Massachusetts from any location, whether within or without the Commonwealth, for which the Company has not previously obtained a license from the Commissioner for such location in accordance with Massachusetts General Laws chapter 255E, section 2.
  3. FMC Group agrees to submit a payment in the amount of five thousand dollars ($5,000) in satisfaction of an administrative penalty collected in consideration of the Company's engaging in mortgage broker activity without maintaining the required licenses. The administrative penalty shall be satisfied as follows:
    1. Two thousand, five hundred dollars ($2,500.00) shall be due and payable immediately upon FMC Group's execution of the Consent Agreement;
    2. A payment of two thousand, five hundred dollars ($2,500.00) shall be due and payable within sixty (60) days following the effective date of this Consent Order; and
    3. FMC Group shall remit payment(s) pursuant to this Section of the Consent Order for the amount then due, payable to the "Commonwealth of Massachusetts," to the Office of the Commissioner of Banks, Attn: Mortgage Broker Examination Unit, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118.
  4. FMC Group shall establish, implement, and maintain procedures to ensure that the Company refrains from collecting compensation from consumers (i) in consideration of services which the Company, as a mortgage broker, is prohibited from performing in a mortgage loan transaction or (ii) where no, or only a nominal, service is provided by the Company.
    1. The Company shall reimburse the consumer identified in the Report from whom a loan discount fee was collected. The amount of such reimbursement shall equal the total amount of the loan discount fee collected. With its written response to the Report, the Company shall submit evidence of the reimbursement issued pursuant to this Section of the Consent Order. Evidence of the reimbursement shall include the consumer's name, the date the loan closed, the check number, the amount of the reimbursement, and a certified mail receipt to illustrate the consumer's receipt of the reimbursement.
  5. FMC Group shall submit a payment of one thousand dollars ($1,000) in satisfaction of an administrative penalty collected in consideration of the Company's soliciting or accepting residential mortgage loan applications prior to July 1, 2008 for property located in Massachusetts from an unlicensed individual engaging in the activity of a mortgage broker, who was not employed by the Company and who otherwise failed to qualify for exemption from mortgage broker licensing, in violation of the Division's published opinions as then in effect. FMC Group 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. The Division shall remit the payment for deposit into the General Fund of the Commonwealth.
  6. FMC Group shall revise its "Borrower's Certificate and Authorization" form to eliminate any representation or statement that could be considered false, misleading, or have the tendency to be misleading, including, but not limited to, any representation that the Company, a licensed mortgage broker, is approving or funding the loan.
  7. FMC Group shall establish, implement, and maintain procedures to ensure that 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 Company's books and records, as provided in 209 CMR 42.09(1)(b).
  8. FMC Group shall establish, implement, and maintain procedures to ensure that the Company refrains from providing consumers with any disclosure which, pursuant to the applicable statute, regulation, or regulatory bulletin, is intended to be issued exclusively by the lender or creditor in the residential mortgage loan transaction.
  9. FMC Group shall establish, implement, and maintain procedures to ensure that the Company accurately discloses yield spread premiums on the Good Faith Estimate, in accordance with the provisions of Real Estate Settlement Procedures Act (RESPA) implementing regulation 24 CFR 3500.
  10. FMC Group shall establish, implement and maintain procedures to ensure that the Company maintains and uses all loan documents in the Company's books and records in a manner sufficient to evidence compliance with applicable state and federal statutes and regulations, in accordance with the record keeping requirements specified by the Division's regulations 209 CMR 42.09 and 209 CMR 48.03. Such procedures shall necessarily require that the Company properly documents the initial date of application and ensures that all disclosures are properly dated and maintained in a manner that will allow the Commissioner to determine whether time-sensitive documents are being provided to consumers within the mandated timing requirements.
  11. FMC Group shall submit to the Commissioner a record-keeping plan pursuant to which the Company will request approval to maintain loan files in an electronic format, as required by the Division's regulation 209 CMR 48.05.
  12. FMC Group shall at all times conduct business exclusively under the business name stated on its mortgage broker license as issued by the Commissioner. The Company shall necessarily review and revise its written forms and disclosures to ensure that the Company is identified in a manner consistent with the name stated on its mortgage broker license as issued by the Commissioner.
  13. FMC Group shall cease from issuing the "Massachusetts Borrower's Attestation of Tangible Benefit" form 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 Company brokers a loan subject to the Division's regulations regarding a lender's determination and documentation of borrower's interest, FMC Group is not permitted to make an affirmative determination that a home loan is in the borrower's interest nor assign the responsibility for making this determination to the borrower. However, the Company may request information from a borrower on behalf of the lender or transmit information to the borrower on behalf of the lender.
    1. The Company shall issue a written notification to each mortgage lender who has received the "Massachusetts Borrower's Attestation of Tangible Benefit" form from the Company. Said written notification shall be in conformance with the requirements set forth in the Report. The Company shall retain a copy of each notification in the Company's books and records until such time as the Division conducts its next Examination/Inspection.
  14. FMC Group shall revise its website to include the Company's license type and number, in accordance with the Division's regulation 209 CMR 42.15 and the Attorney General's regulation 940 CMR 8.04(2).
  15. FMC Group shall comply with all laws and regulations applicable to the conduct of the mortgage broker business and engaging in the activity of a mortgage loan originator, 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 (20) days of receipt of the Report, all violations and areas of concern addressed in the Report.
    1. Within twenty (20) days of FMC Group'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 FMC Group 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 (30) days from the effective date of this Consent Order, FMC Group shall establish, implement, and maintain quality control standards which provide for a loan review process to assess the Company'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 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. FMC Group 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.
  16. On the thirtieth (30th) day after the end of each calendar quarter following the date of this Consent Order, FMC Group 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 FMC Group 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 FMC Group's compliance condition in Massachusetts and the results thereof.
  17. The reporting requirement to the Division referenced in Section 16 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.
  18. Nothing in this Consent Order shall be construed as permitting FMC Group to violate any law, rule, regulation, or regulatory bulletin to which FMC Group is subject.
  19. 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.
  20. This Consent Order shall become effective immediately upon the date of its issuance.
  21. 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.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

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

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