By the Division of Banks


COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER &
MORTGAGE BROKER
LICENSING
Docket No. 2014-012

CONSENT ORDER

In the Matter of

MILEND, INC.
Atlanta, Georgia

Mortgage Company License No. MC148769


WHEREAS, MILEND, INC., Atlanta, Georgia, (MiLend or the Corporation), a licensed mortgage lender and mortgage broker under Massachusetts General Laws chapter 255E, section 2, has been advised of its right to Notice and Hearing pursuant to General Laws chapter 255E, section 7(a), 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 October 15, 2014, 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, MiLend agrees to the issuance of this CONSENT ORDER (Consent Order) by the Commissioner of Banks (Commissioner);

WHEREAS, an examination was conducted pursuant to General Laws chapter 255E, section 8, as of April 9, 2013 to assess the Corporation’s level of compliance with applicable Massachusetts and federal statutes and regulations governing the conduct of those engaged in the business of a mortgage lender and mortgage broker in the Commonwealth; and

WHEREAS, the Report of Examination (Report) issued pursuant to the Division’s examination of MiLend 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.

ORDER

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

  1. MiLend must, on an ongoing basis, review and revise as necessary all advertisements, including but not limited to, direct mailings, radio ads, the Corporation’s website(s), and newspaper advertisements, to eliminate any representations or statements that could be considered false, misleading, or have the tendency to be misleading.  Compliance with this Section of the Consent Order must include, without limitation, the following corrective actions:
    1. MiLend must cease advertising “free appraisals”, “no appraisal fee,” or any other terms that would mislead consumers to believe that they would not be responsible for paying the cost of a field appraisal when, in fact, that benefit is only available to borrowers whose loans do not close. 
    2. MiLend must ensure that advertisements do not imply that the product being advertised is officially endorsed, sponsored by, or affiliated with any government program.
    3. MiLend must ensure that advertisements that contain the U.S. Department of Housing and Urban Development (HUD) approved lending institution logo contain the required disclaimer language, as described in the HUD Mortgagee Letter 2011-17.
    4. MiLend must ensure that all advertisements contain MiLend’s license type and number, in accordance with the Division’s regulation 209 CMR 42.15 and the Attorney General’s regulation 940 CMR 8.04(2).  
    5. MiLend must ensure that all advertisements that contain the triggering language referenced in the Attorney General’s regulation 940 CMR 8.04(4)(d) (i.e. “bad credit no problem” or words of similar import) also include the required disclosure language.
  1. MiLend must conduct a portfolio review of all residential mortgage loans closed since the date of licensure and identify all instances where the borrowers paid for an appraisal fee.  MiLend shall reimburse all such borrowers for the full amount of the appraisal fee paid by the borrowers.  Within 90 days of the execution of this Consent Order, MiLend must provide evidence of all refunds issued to borrowers as a result of the portfolio review.  Evidence must include the borrowers’ names, the amounts of the reimbursements, the dates of the reimbursements, and evidence of borrowers’ receipt of the reimbursements.
  2. MiLend must establish, implement, and maintain appropriate policies and procedures for the monitoring and oversight of its settlement agents and/or closing attorneys to ensure that no duplicate discharge/release recording fees are collected from Massachusetts borrowers.
    1. MiLend must reimburse borrowers identified in the Report for the duplicate discharge/release recording fees that were collected.  The amount of the reimbursements shall equal the amount of the duplicative discharge/release fee collected by MiLend when MiLend’s closing attorney did not pay the discharge/release fee on behalf of the consumers and did not reimburse the consumers for duplicative discharge/release fees collected.  In instances where the borrowers identified in the Report were previously issued a refund of the duplicate fee, MiLend will submit evidence of such. 
    2. With its response to the Report, MiLend agrees to submit evidence of the reimbursements/refunds issued pursuant to this Section of the Consent Order. Evidence shall include the consumers’ names, the amounts of the reimbursements, the dates of the reimbursements, copies of the refund checks, and copies of certified mail receipts to illustrate the borrowers’ receipt of the reimbursements, as appropriate.
  1. MiLend must review and revise as appropriate its mortgage loan originator compensation policies to ensure that the rate of compensation is not based on a credit transaction’s terms or conditions, in compliance with the Consumer Financial Protection Bureau’s regulation 12 CFR 1026.36(d). 
  2. MiLend must 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 12 C.F.R. Part 1003 (Regulation C).  Such procedures shall require that the Corporation implement internal controls to ensure that, for all HMDA reportable loan applications, MiLend accurately compiles and records all required data in the Corporation’s HMDA Loan Application Register (LAR). 
    1. MiLend must establish, implement, and maintain operating policies and training procedures to ensure that all applicable personnel possess a comprehensive understanding of the HMDA reporting requirements under Regulation C.  Such training shall necessarily ensure the proper implementation and execution of the revised practices and procedures adopted by MiLend pursuant to this Section of the Consent Order; and
    2. Within thirty (30) days of the effective date of this Consent Order, MiLend must prepare and submit to the Division a written report detailing the policies, procedures and training enhancements that have been implemented to ensure HMDA data is recorded accurately
  1. MiLend must establish, implement, and maintain procedures to ensure that the Corporation is in compliance with the Division’s regulation 209 CMR 53.00 et seq. regarding determination and documentation of a borrower’s interest when refinancing a home loan that was consummated within 60 months prior to the Corporation’s receipt of an application for a new home loan.  Such procedures shall ensure that in any transaction in which MiLend is acting in the capacity of a mortgage lender, the burden is upon MiLend, exclusively, to determine that the refinancing is in the borrower’s interest.
    1. When acting in the capacity of a mortgage lender, MiLend must ensure that the worksheet or other document indicating that a refinance loan is in the borrower’s interest is completed by the Corporation and does not, in any manner, shift the burden to the borrower to determine and to demonstrate that the home loan is in the borrower’s interest.
  1. When acting in the capacity of a mortgage lender, MiLend must establish, implement, and maintain procedures to ensure that every residential mortgage presented for record in which a mortgage broker is involved contains the name, address, and license number of the mortgage broker responsible for placing the mortgage loan with the Corporation.
  2. MiLend must establish, implement and maintain procedures to ensure that the Corporation does not contract for or impose late charges that are in excess of the amount permitted under Massachusetts General Laws chapter 183, section 59. MiLend must review and revise as necessary all documentation containing provisions referencing late payment charges to ensure that such provisions are in compliance with Massachusetts General Laws chapter 183, section 59. 
  3. MiLend must 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 applicants of their right to appeal such denial to the appropriate 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 must be retained in the Corporation’s books and records as evidence of compliance. 
  4. MiLend must establish, implement and maintain procedures to ensure that the Corporation establishes whether it is performing in the capacity of a mortgage broker or mortgage lender at the inception of the loan transaction and shall ensure that all disclosures provided to the consumers accurately reflect the capacity in which the Corporation is performing.  
  5. MiLend must revise its “Borrower’s Certification and Authorization” form to eliminate any representation or statement that could be considered false, misleading, or have the tendency to be misleading, including, but not limited to, any representation that the Corporation, when acting as a mortgage broker, is approving or funding the loan. 
  6. MiLend must take all corrective action as specified in the Report.
    1. MiLend must 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.
  1. On the thirtieth (30th) day after the end of each calendar quarter following the date of this Consent Order, MiLend must furnish written progress reports to the Division, which shall address and include the following:
    1. 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
    2. Written findings prepared by MiLend detailing a review of management’s and staff members’ 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 MiLend’s compliance condition in Massachusetts and the results thereof.
  1. The reporting requirement to the Division referenced in Section 13 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.
  2. Nothing in this Consent Order shall be construed as permitting MiLend to violate any law, rule, regulation, or regulatory bulletin to which the Corporation is subject.
  3. In consideration of the foregoing Consent Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke MiLend’ mortgage lender license under Massachusetts General Laws chapter 255E, section 6, while this Consent Order is in effect, but subject to Section 17.
  4. Failure to comply with the terms of this Consent Order shall constitute grounds for license suspension and/or revocation, or other formal regulatory action pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
  5. This Consent Order shall become effective immediately upon the date of its issuance.
  6. The provisions of this Consent Order shall remain effective and enforceable except to the extent that, and until such time as the Commissioner or a court of competent jurisdiction modifies, terminates, suspends, or sets aside any provision of this Consent Order.
  7. 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 MiLend.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 15th day of October, 2014

David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts