By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER
MORTGAGE BROKER AND
MORTGAGE LOAN ORIGINATOR
LICENSING

CEASE DIRECTIVE

In the Matter of
REVERSE MORTGAGE DIRECTORY, LLC
Los Angeles, California


The Commissioner of Banks ("Commissioner") is charged with the administration of Massachusetts General Laws chapter 255E, and applicable regulations found at 209 CMR 42.00 et seq., relating to the licensing of mortgage lenders and mortgage brokers; and Massachusetts General Laws chapter 255F and applicable regulations found at 209 CMR 41.00 et seq., relating to the licensing of mortgage loan originators.

Pursuant to the authority granted by Massachusetts General Laws chapter 255E, the Commissioner has investigated the activities of REVERSE MORTGAGE DIRECTORY, LLC ("Reverse Mortgage Directory") located at 10100 Santa Monica Blvd. Suite 410, Los Angeles, California, to determine if Reverse Mortgage Directory has engaged in the business of, or is about to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 255E,. Based upon such investigation, the Division hereby issues the following CEASE DIRECTIVE ("Cease Directive") as a result of the findings alleged herein.

A. FINDINGS OF FACT

  1. Massachusetts General Laws chapter 255E, section 2 relative to the licensing requirements for entities engaged in the business of a mortgage lender and/or mortgage broker states in part:

    No person shall act as a mortgage broker or mortgage lender with respect to residential property unless first obtaining a license from the commissioner.

  2. Massachusetts General Laws chapter 255E, section 1 defines a mortgage broker as:

    any person who for compensation or gain, or in the expectation of compensation or gain, directly or indirectly negotiates, places, assists in placement, finds or offers to negotiate, place, assist in placement or find mortgage loans on residential property for others.

  3. 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.

  4. On or about May 11, 2010 and June 4, 2010, the Division was forwarded an online advertisement published by Reverse Mortgage Directory and subsequently reviewed a website maintained by Revere Mortgage Directory at www.reversemortgageadviser.com. The online advertisement is attached as Exhibit 1 pdf format of reverse09102010.pdf
.
  5. The online advertisement contained the following language: "Stimulus for Seniors", "Government Guaranteed", and "Get Money Now" and directed individuals to the website maintained by Reverse Mortgage Directory at www.reversemortgageadviser.com. The Division's review of the online advertisement revealed that Reverse Mortgage Directory included limited information about reverse mortgage programs and furthermore that the online advertisement referenced inaccurate and or misleading information regarding reverse mortgage loans including but not limited to the statement that reverse mortgage loans were "Government Backed" and represented a "Stimulus for Seniors" giving the impression that a reverse mortgage loan is somehow available as part of a government sponsored stimulus plan.
  6. The Division's review of the website maintained by Reverse Mortgage Directory found that it directed consumers to complete certain information to "Get a Free Quote," including but not limited to a prospective borrower's name, address, e-mail address, phone number and estimated value of their property. In addition, the website contained an 800 telephone number that consumers could call to get more information.
  7. The Division's records indicate that Reverse Mortgage Directory is not licensed to do business as a mortgage broker in the Commonwealth of Massachusetts.
  8. Massachusetts General Laws chapter 167E, section 7 states in part;

    A bank may make or acquire a reverse mortgage loan, pursuant to a program for reverse mortgage loans which has been submitted to and approved by the commissioner…

  9. Massachusetts General Laws chapter 167E, §7, is made applicable to all mortgagees making reverse mortgage loans in the Commonwealth by General Laws chapter 183, section 67 which requires Massachusetts state-chartered banks and all other mortgagees including federally-chartered banks and credit unions intending to make reverse mortgage loans to submit for the Division's approval a program, which meets specific criteria set forth in General Laws chapter 167E, section 7.
  10. The website contained certain information relative to reverse mortgage products and reverse mortgage lenders. Through the "Find a Lender" webpage on the homepage, the consumer is a directed to a list of reverse mortgage lenders in the state of their choice, including Massachusetts.
  11. The "Find a Lender" webpage for Massachusetts lenders states in part that the listing of all reverse mortgage lenders are "properly licensed in Massachusetts", and describes the lenders as "qualified Massachusetts Reverse Mortgage Lender[s]".
  12. The Division's records indicate that several Massachusetts reverse mortgage lenders listed on Reverse Mortgage Directory's website are not licensed or approved to make or acquire reverse mortgage loans in Massachusetts.
  13. As of the date of this Cease Directive, the website maintained by Reverse Mortgage Directory continues to be operational.

    B. CEASE DIRECTIVE

  14. Reverse Mortgage Directory and any and all officers, members, managers, employees, independent contractors, or agents, operating on behalf of Reverse Mortgage Directory, and their successors or assigns, shall immediately cease engaging in the activities of a mortgage broker, as those activities are defined under Massachusetts General Laws chapter 255E, section 1, relative to any residential property in Massachusetts. Therefore, Reverse Mortgage Directory 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.
  15. Reverse Mortgage Directory shall immediately cease providing to Massachusetts consumers information regarding reverse mortgage products and Massachusetts reverse mortgage lenders.
  16. Reverse Mortgage Directory shall submit to the Commissioner a detailed record, prepared as of the date of submission, of all contact and borrower property information obtained from Massachusetts consumers. The records to be produced shall be submitted to the Commissioner within five (5) days of the effective date of this Cease Directive and shall include all information on file.
  17. Reverse Mortgage Directory must submit a response within five (5) of receipt of this Cease Directive. The response must indicate whether Reverse Mortgage Directory will seek to be licensed as mortgage broker. The response submitted must also include a signed copy of the enclosed affidavit, attesting that Reverse Mortgage Directory will immediately cease from engaging in any unlicensed or unauthorized mortgage brokering activity including any use of solicitations or advertising in Massachusetts until such time as a license and/or approval to engage in such activities is issued by the Commissioner.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 10th day of September, 2010

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