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
Senior Reverse Mortgage Online

Houston, Texas


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 Senior Reverse Mortgage Online ("Senior Reverse Mortgage") located at 9200 Bissonnet, Suite 330, Houston, Texas, to determine if Senior Reverse Mortgage has engaged in the business of, or is about to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 255E and Massachusetts General Laws chapter 255F. Based upon such investigation, the Massachusetts Division of Banks ("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 lender as:

    any person engaged in the business of making mortgage loans, or issuing commitments for mortgage loans

  3. 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.

  4. Massachusetts General Laws chapter 255F section 2 relative to the licensing requirements for mortgage loan originators states:

    Section 2. (a) No individual shall act as a mortgage loan originator with respect to any dwelling unless such person has first obtained a mortgage loan originator license from the commissioner or is exempt from the licensure requirement under subsection (b). No person shall knowingly employ or retain a mortgage loan originator unless the mortgage loan originator is licensed under this chapter or is exempt from the licensure requirement under subsection (b). Each licensed mortgage loan originator shall register with the Nationwide Mortgage Licensing System and Registry and shall maintain a valid unique identifier issued by the Nationwide Mortgage Licensing System and Registry.

  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. On or about June 6, 2011, the Division reviewed the following website: www.seniorreversemortgageonline.com which contains certain information about reverse mortgage loans in Massachusetts.
  7. The Division's review of the website revealed that Senior Reverse Mortgage identifies itself as a "national reverse mortgage referral service." The website also directs consumers to complete certain information for 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. All the information requested by Senior Reverse Mortgage is necessary to complete a reverse mortgage loan application.
  8. The website maintained by Senior Reverse Mortgage also directs consumers to call a toll free number to speak to a "loan officer." The website further states that "loan officers are standing by."
  9. The Division's records indicate that Senior Reverse Mortgage is not licensed to do business as a mortgage lender or mortgage broker in the Commonwealth of Massachusetts.
  10. 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…

  11. Massachusetts General Laws chapter 167E, section 7 ("section 7") is made applicable to all mortgagees making reverse mortgage loans in the Commonwealth by General Laws chapter 183, section 67. Said section 7 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 section 7.
  12. The website contained certain information relative to reverse mortgage lenders. Through the "Lender Directory" page the consumer is directed to a listing of reverse mortgage lenders for the state of their choice, including Massachusetts.
  13. The Division's records indicate that the Massachusetts reverse mortgage lender listed on the website maintained by Senior Reverse Mortgage is not licensed or approved to make or acquire reverse mortgage loans in the state of Massachusetts.
  14. As of the date of this Cease Directive, the website maintained by Senior Reverse Mortgage continues to be operational.

    B. CEASE DIRECTIVE

  15. Senior Reverse Mortgage, and any and all officers, members, managers, employees, independent contractors, or agents, operating on behalf of Senior Reverse Mortgage, and their successors or assigns, shall immediately cease engaging in the activities of: (a) a mortgage lender and/or a mortgage broker, as those activities are defined under Massachusetts General Laws chapter 255E, section 1; and (b) a mortgage loan originator, as those activities are defined under Massachusetts General Laws chapter 255F, section 1, relative to any residential property in Massachusetts. Therefore, Senior Reverse Mortgage is ordered to immediately cease soliciting or accepting, either directly or indirectly, any personal information, contact information or applications from prospective borrowers for property located in Massachusetts until such time that Senior Reverse Mortgage has obtained a license to conduct business in the Commonwealth pursuant to General Laws chapter 255E, section 2.
  16. Senior Reverse Mortgage shall immediately cease providing Massachusetts consumers information regarding reverse mortgage products.
  17. Within five (5) days of the effective date of this Cease Directive, Senior Reverse Mortgage 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 including but not limited to all pending applications for reverse mortgage loans for Massachusetts consumers. The records to be produced shall include the consumers' names, addresses and the dollar amount of each reverse mortgage loan.

  18. Senior Reverse Mortgage must submit a response within five (5) days of receipt of this Cease Directive. The response must indicate whether Senior Reverse Mortgage will seek to be licensed as a mortgage lender and/or mortgage broker. The response submitted must also include a signed copy of the enclosed affidavit, attesting that Senior Reverse Mortgage will immediately cease from engaging in any unlicensed or unauthorized activity including any use of advertising or soliciting information from prospective borrowers 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 23rd day of August, 2011

By:
David J. Cotney
Commissioner of Banks