By the Division of Banks


COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

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

CONSENT ORDER

In the Matter of
PAUL MIGNONE

Mortgage Loan Originator License No. MLO22931


WHEREAS, PAUL MIGNONE a licensed mortgage loan originator under Massachusetts General Laws chapter 255F, section 2, has been advised of his 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 4, 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, Paul Mignone agrees to the issuance of this CONSENT ORDER (Consent Order) by the Commissioner of Banks (Commissioner);

WHEREAS, the Division has jurisdiction over the licensing and regulation of persons engaged in the business of a mortgage loan originator in Massachusetts pursuant to Massachusetts General Laws chapter 255F, section 2 and its implementing regulations 209 CMR 41.00 et seq.;

WHEREAS, at all relevant times, Paul Mignone was licensed as a mortgage loan originator under Massachusetts General Laws chapter 255F, Section 2;

WHEREAS, Paul Mignone is, and at all relevant times has been, the President and majority owner of American Trust Mortgage, Inc. (American Trust), a licensed mortgage broker under General Laws chapter 255E, section 2;

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 and Paul Mignone, in his capacity as President and majority owner of American Trust and as a licensed mortgage loan originator;

WHEREAS, on or about January 3, 2013, American Trust and Paul Mignone, through counsel, filed a Response to the Order and Notice, whereby American Trust and Paul Mignone contested certain of the Division’s findings as set forth in the Order and Notice. By the Response, American Trust and Paul Mignone 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, 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 Paul Mignone 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, Paul Mignone 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, Paul Mignone 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 Paul Mignone 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 Paul Mignone on this 4th day of April, 2013.

ORDER

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

  1. Paul Mignone will continue to refrain from taking residential mortgage loan applications, or offering or negotiating terms of a residential mortgage loans, or otherwise engaging in the mortgage loan originator business, as that term is defined under General Laws chapter 255F, section 1.
  2. Paul Mignone’s Massachusetts mortgage loan originator 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. Paul Mignone 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 Paul Mignone’s license status in Massachusetts in the Nationwide Multi-State Licensing System & Registry (NMLS) to "Denied."
  4. Paul Mignone will refrain from submitting an application to obtain a mortgage loan originator license, or any other license, from the Division for a period of 10 years from December 18, 2012.
  5. To the extent that Paul Mignone wishes to resume business as a mortgage loan originator at the expiration of the 10-year term as set forth above, Paul Mignone shall be required to submit a completed application to obtain the relevant license from the Commissioner. The Commissioner shall have all of the discretion set forth within General Laws chapter 255F, section 4 and the Division’s regulation 209 CMR 41.00 et seq. in determining whether to issue a license to Paul Mignone to conduct the licensed business, provided however, that any such application shall not be denied on the basis of the Order and Notice.
  6. Paul Mignone is prohibited from taking an ownership position in any entity licensed by the Division and from participating, in any manner, in the responsibilities or duties of a control person of such an entity at any time in the future. For the purposes of this Consent Order, "control" shall be defined as the power, directly or indirectly, to direct the management or policies of a company, whether through ownership of securities, by contract, or otherwise.
  7. 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 Paul Mignone.
  8. This Consent Order shall become effective immediately upon the date of its issuance.
  9. In accordance with the terms of the Consent Agreement entered by Paul Mignone and the Commissioner, Paul Mignone has waived all rights of appeal that he may have relative to the Order and Notice and this Consent Order or any of its provisions.
  10. 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.
  11. 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 and the Consent Agreement.

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