By the Division of Banks


COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE BROKER LICENSING
Docket No. 2012-041-CO

CONSENT ORDER

In the Matter of
AMERICAN TRUST MORTGAGE, INC.

Swampscott, Massachusetts

Mortgage Broker License No(s). MB2911 et seq.


WHEREAS, AMERICAN TRUST MORTGAGE, INC. (American Trust or the Corporation) a licensed mortgage broker under Massachusetts General Laws chapter 255E, section 2, has been advised of its right to Notice and Hearing pursuant to Massachusetts General Laws chapter 30A, section 10, 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 April 4th, 2013, whereby, solely for the purpose of settling this matter and without admitting any allegations or implications of fact or the existence of any violations of applicable state and federal statutes or rules, American Trust agrees to the issuance of this CONSENT ORDER (Consent Order) by the Commissioner of Banks (Commissioner);

WHEREAS, the Division of Banks (Division) has jurisdiction over the licensing and regulation of persons and entities engaged in the business of a mortgage broker in Massachusetts pursuant to Massachusetts General Laws chapter 255E, section 2 and its implementing regulation 209 CMR 42.00 et seq.;

WHEREAS, On or about December 3, 2012, the New Hampshire Banking Department (NH Banking Department) initiated an examination of American Trust to further investigate information shared by the Division which was discovered during the Division’s examination of American Trust which had commenced as of April 3, 2012 (the 2012 examination) pursuant to Massachusetts General Laws chapter 255E, section 8;

WHEREAS, during the course of the examination conducted by the NH Banking Department, the New Hampshire examiners conducted a review of documentation contained in "shred bins" and designated for destruction at American Trust’s Swampscott, Massachusetts location;

WHEREAS, during the review of the material contained in the "shred bins," New Hampshire examiners discovered documentation pertaining to 2012 residential mortgage loan transactions involving Massachusetts borrowers and secured by property located in Massachusetts that evidenced unfair or deceptive practices;

WHEREAS, the Division’s Report of Examination (the Report), which was issued to American Trust on or about December 18, 2012, presented the findings of the 2012 examination, as well as the findings relative to the examination conducted by the NH Banking Department, and alleged significant failures to comply with applicable state and federal laws, rules, regulations, and regulatory bulletins governing the conduct of those engaged in the business of a mortgage broker in Massachusetts;

WHEREAS, on December 18, 2012, based upon the findings as set forth in the Report, the Division issued a TEMPORARY ORDER TO CEASE AND DESIST & ORDER TO SHOW CAUSE AND NOTICE OF RIGHT TO A HEARING (the Order and Notice), Docket No. 2012-041, against American Trust;

WHEREAS, on or about January 3, 2013, American Trust, through counsel, filed a Response to the Order and Notice, whereby American Trust contested certain of the Division’s findings as set forth in the Order and Notice. By the Response, American Trust further reserved the right to proceed to an administrative hearing in accordance with Massachusetts General Laws chapter 30A;

WHEREAS, on or about January 16, 2013 American Trust submitted a response to the Report;

WHEREAS, on January 24, 2013, Paul Mignone, President of American Trust, accompanied by counsel, appeared at the Division’s office for an informal conference to discuss the matters raised by the Report and the Order and Notice;

WHEREAS, the parties now seek to resolve by mutual agreement, the matters identified in the Order and Notice;

WHEREAS, without this Consent Order constituting an admission by American Trust of any allegations made or implied by the provisions of the Order and Notice; solely for the purpose of settlement of all alleged violations without protracted administrative proceedings and judicial review, American Trust hereby waives all rights to complete the hearing process relative to this proceeding and affirms that it is willing to take all necessary action as set forth in this Consent Order;

WHEREAS, American Trust cooperated with the Division in producing information, responding to questions relevant to the examination, submitting a detailed response to the Report, attending a conference with the Division, and conferring with the Division on several dates;

WHEREAS, in recognition of the Division and American Trust having reached the following mutual agreement under this Consent Order to resolve the matters raised by the Order and Notice, the Commissioner has terminated the Order and Notice as to American Trust on this 4th day of April, 2013.

ORDER

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

  1. American Trust and any and all officers, directors, employees, or managers or their successors or assigns operating on behalf of American Trust, will cease engaging in the activity of a mortgage broker in Massachusetts, as those terms are defined under General Laws chapter 255E, section 1.
  2. American Trust’s Massachusetts mortgage broker renewal application, which was submitted to the Division through the Nationwide Multi-State Licensing System & Registry (NMLS) on or about December 10, 2012, is hereby denied. American Trust waives all hearing and appeal rights relative to the denial of the renewal application.
  3. Immediately upon the execution of this Consent Agreement, the Division will update American Trust’s license status in Massachusetts in the NMLS to "Denied."
  4. American Trust is prohibited from applying for any license from the Division in the future.
  5. The provisions of this Consent Order shall not limit, estop, or otherwise prevent any other state agency or department from taking any other action affecting American Trust and/or any of its officers, directors, or managers.
  6. This Consent Order shall become effective immediately upon the date of its issuance.
  7. The provisions of this Consent Order shall be binding upon American Trust and its directors, officers, managers, and their successors and assigns.
  8. In accordance with the terms of the Consent Agreement entered by American Trust and the Commissioner, American Trust has waived all rights of appeal that it may have relative to the Order and Notice.
  9. 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.
  10. 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 other than those set forth in this Consent Order, which replaces and supersedes all prior agreements between American Trust and the Commissioner.
  11. This Consent Order shall become effective immediately upon the date of its issuance.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS:

Dated at Boston, Massachusetts, this 4th day of April, 2013

By:
David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts