By the Division of Banks
COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
MORTGAGE LENDER AND
Docket No. 2011-093
In the Matter of
GENWORTH FINANCIAL HOME EQUITY ACCESS, INC.
Now Known as Liberty Home Equity Solutions, Inc.
Rancho Cordova, California
Mortgage Company License No. MC3313
WHEREAS, GENWORTH FINANCIAL HOME EQUITY ACCESS, INC., Rancho Cordova, California ("Genworth Financial" or the "Corporation"), a licensed mortgage lender and mortgage broker under Massachusetts General Laws chapter 255E, section 2, has entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER ("Consent Agreement") with representatives of the Division of Banks ("Division") dated April 4, 2012, 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 and mortgage broker, Genworth Financial agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");
WHEREAS, an examination/inspection of Genworth Financial was conducted pursuant to General Laws chapter 255E, section 8, as of August 29, 2011 to assess the Corporation’s level of compliance with applicable Massachusetts and federal statutes, rules, and regulations governing the conduct of those engaged in the business of a mortgage lender and mortgage broker in the Commonwealth;
WHEREAS, the Report of Examination/Inspection (the "Report") issued pursuant to the Division’s examination/inspection of Genworth Financial 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 and mortgage broker in Massachusetts; and
WHEREAS, the parties now seek to resolve by mutual agreement, the matters identified in the Report.
NOW COME the parties in the above-captioned matter, the Division and Genworth Financial, and stipulate and agree as follows:
- Genworth Financial shall establish, implement and maintain procedures to ensure that all mortgage loan originators with whom the Corporation conducts business are duly licensed as mortgage loan originators under Massachusetts General Laws chapter 255F, and properly sponsored through the Nationwide Mortgage Licensing System (NMLS) by Genworth Financial or by the licensed mortgage broker.
- Genworth Financial has submitted a payment in the amount of twenty eight thousand dollars ($28,000.00) in satisfaction of an administrative penalty collected in consideration of the Corporation’s conducting business with mortgage loan originators who did not hold an active mortgage loan originator license. On or about February 6, 2012, Genworth Financial remitted the payment in full of the amount indicated above, payable to the "Commonwealth of Massachusetts," to the Office of the Commissioner of Banks, Attn: Mortgage Lender Examination Unit, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118.
- On or before March 31, 2012, Genworth Financial shall upload to the NMLS year-end financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP), including a balance sheet and statement of income and expense prepared as of December 31, 2011.
- On the thirtieth day after the end of each calendar quarter following the date of this Consent Order, Genworth Financial shall upload to the NMLS updated financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) and signed and dated by a duly authorized officer of Genworth Financial with sufficient knowledge to attest to the information reported in the financial statements. Each such filing submitted to the Division shall include updated financial statements prepared as of the last day of the calendar quarter, including a balance sheet and statement of income and expense.
- Genworth Financial shall establish, implement, and maintain procedures to ensure that the Corporation retains the borrowers’ written acceptance of reverse mortgage loan commitments in order to evidence the seven day waiting period prior to closing required by Massachusetts General Laws chapter 167E, section 7(d)(2). In addition, the Corporation shall ensure that reverse mortgage loans are not closed during the seven day waiting period.
- Genworth Financial shall establish, implement, and maintain procedures and policies to ensure that Massachusetts reverse mortgage applicants receive counseling from a reverse mortgage counseling agency which has been approved by the Massachusetts Executive Office of Elder Affairs, as required under Massachusetts General Laws chapter 167E, section 7(e).
- Genworth Financial shall establish, implement, and maintain policies and procedures to ensure that both the Corporation and third party agents and attorneys refrain from recording mortgages that are subject to a three day right of rescission under Massachusetts General Laws chapter 140D, section 10 until after the termination of said rescission period.
- With its preliminary response to the Report, Genworth Financial submitted evidence of the reimbursement made to the consumer cited in the Report for the amount of the third party fee that the consumer was overcharged.
- Genworth Financial shall establish, implement, and maintain procedures to ensure that the Corporation discloses its license type and number to all clients and/or residential mortgage loan applicants in writing at the time a fee is paid or a mortgage loan application is accepted.
- Genworth Financial shall establish, implement and maintain procedures to ensure that all applicants whose residential mortgage loan application is denied receive a Mortgage Review Board Disclosure Form notifying them that they may appeal such denial to the review board in accordance with Massachusetts General Laws chapter 167, section 14A. For each consumer loan file, a completed copy of the Mortgage Review Board Disclosure Form shall be retained in the Corporation’s books and records as evidence of compliance.
- Genworth Financial shall establish, implement, and maintain procedures to ensure compliance with the loan reporting requirements set forth in the Home Mortgage Disclosure Act ("HMDA"), 12 U.S.C. section 2801 et seq., as implemented by Regulations of the Board of Governors of the Federal Reserve System, 12 C.F.R. Part 203 ("Regulation C"). Such procedures shall require that the Corporation implement internal controls to ensure that, for all HMDA reportable loan applications, Genworth Financial accurately compiles and records all required data in the Corporation’s HMDA Loan Application Register ("LAR").
- Genworth Financial shall comply with all laws and regulations applicable to its conducting the business of a mortgage lender and mortgage broker, 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, all violations and areas of concern addressed in the Report.
- On or about February 6, 2012, Genworth Financial submitted a preliminary written response to the Report. Genworth Financial will be required to address the violations and areas of concern specified in the Report and also to describe the revised policies and procedures adopted by Genworth Financial 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.
- Within thirty days of the effective date of this Consent Order, Genworth Financial shall establish, implement, and maintain quality control standards which provide for a loan review process to assess the Corporation’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 and mortgage broker in Massachusetts, and (ii) the provisions of this Consent Order; and
- Genworth Financial 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.
- On the thirtieth day after the end of each calendar quarter following the date of this Consent Order, Genworth Financial shall furnish written progress reports to the Division, which shall address and include the following:
- 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
- Written findings prepared by Genworth Financial 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 Genworth Financial’s compliance condition in Massachusetts, and the results thereof.
- The reporting requirement to the Division referenced in Section 11 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.
- Nothing in this Consent Order shall be construed as permitting Genworth Financial to violate any law, rule, regulation, or regulatory bulletin to which Genworth Financial is subject.
- In consideration of the foregoing Consent Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke Genworth Financial’s mortgage company license(s) under Massachusetts General Laws chapter 255E, section 6, while this Consent Order is in effect.
- 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.
- This Consent Order shall become effective immediately upon the date of its issuance.
- Genworth Financial agrees that, in the event that the Corporation fails to submit the payments set forth in this Consent Order in the amounts specified herein and in accordance with the applicable deadlines, the Division shall be authorized to submit a claim for such amounts against the mortgage lender and/or mortgage broker Massachusetts surety bond maintained by Genworth Financial pursuant to the Division’s regulations 209 CMR 42.03(2)(a) and 209 CMR 42.06(2)(a).
- 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.
- This Consent Order and the Consent Agreement are the complete documents representing the resolution of this matter. There are no other agreements between the Division and Genworth Financial.
BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS:
Dated at Boston, Massachusetts, this 4th day of April, 2012
David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts