By the Division of Banks
COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
MORTGAGE LENDER &
Docket No. 2014-019
In the Matter of
SUN MORTGAGE COMPANY, INC.
Mortgage Company License No. MC2742
WHEREAS, SUN MORTGAGE COMPANY, INC., Boston, Massachusetts, (Sun Mortgage 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 December 12, 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, Sun Mortgage 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 August 12, 2014 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 Sun Mortgage 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.
NOW COME the parties in the above-captioned matter, the Division and Sun Mortgage, and stipulate and agree as follows:
- Sun Mortgage must establish, implement, and maintain procedures to ensure that all loan fees, points, or similar fees collected by the Corporation in a mortgage transaction involving residential property located in the Commonwealth are not charged to consumers except to the extent that such loan fees or points have been properly disclosed to the consumers by the Corporation, in writing, prior to the closing of the mortgage loan in accordance with Massachusetts General Laws chapter 183, section 63.
- The Corporation shall reimburse the consumer identified in the Report for the fee collected at settlement that had not been disclosed to the consumer, in writing, prior to loan closing. The amount of such reimbursement must equal the difference between the actual charge assessed to the consumer and the amount disclosed in writing for such fee prior to loan closing; and
- With the executed copy of the Consent Agreement, the Corporation shall submit evidence of the reimbursement issued pursuant to this Section of the Consent Order. Evidence of the reimbursement must include the consumer’s name, the date the loan closed, the check number, the amount of the reimbursement, and certified mail receipt to illustrate the consumer’s receipt of the reimbursement.
- Sun Mortgage must establish, implement and maintain policies and procedures to ensure that the Corporation complies with all underwriting guidelines during the origination of a mortgage loan. The Corporation must ensure that it maintains all books, records, and accounts in accordance with the requirements of Massachusetts General Laws chapter 255E, section 8 and the Division's regulation 209 CMR 42.09 to evidence compliance with the provisions of his Section. The policies and procedures are to include but are not limited to:
- Maintaining procedures to ensure that Sun Mortgage retains the entire loan file relative to each mortgage loan; and
- Ensuring that Sun Mortgage conducts on-going, periodic reviews of document filing and retention procedures, and its compliance thereto, to ensure its books, records, and accounts are maintained in a manner sufficient to evidence compliance with investor guidelines and applicable federal and state laws, rules and regulations.
- Sun Mortgage must immediately desist from providing consumers with any oral representations or assurances, or any written documentation that states, suggests, or infers that the Corporation is locking an interest rate or processing an interest rate lock on residential property in Massachusetts. The provisions of this Section of the Consent Order shall necessarily require that the Sun Mortgage review the Division’s regulation 209 CMR 42.11A regarding the issuance of rate lock commitments.
- Sun Mortgage must establish, implement, and maintain an anti-money laundering program (AML), as required by the Financial Crimes Enforcement Network’s regulation 31 CFR 1029.210, and must ensure that the AML program is implemented in accordance with such procedures.
- Sun Mortgage must establish, implement, and maintain procedures to ensure that all quarterly reports filed by the Corporation contain accurate information, in accordance with the Division’s regulation 209 CMR 42.09(4).
- Sun Mortgage agrees to review all submitted quarterly reports and amend, as necessary, in the Nationwide Multi-State Licensing System and Registry (NMLS) to ensure all reports are accurate.
- Sun Mortgage 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.
- Sun Mortgage must establish, implement, and maintain procedures to ensure compliance with the Equal Credit Opportunity Act, 15 U.S.C. 1691 et seq., as implemented by 12 C.F.R. Part 1002 (Regulation B). Such procedures must require that Sun Mortgage implement internal controls to ensure that the Corporation properly notifies applicants of actions taken on applications, in compliance with Section 1002.9 of Regulation B.
- Sun Mortgage must establish, implement and maintain procedures to ensure the Corporation’s license type and number are properly disclosed in accordance with the Division’s regulation 209 CMR 42.15.
- On the thirtieth (30th) day after the end of each calendar quarter following the date of this Consent Order, Sun Mortgage must 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 Sun Mortgage 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 Sun Mortgage’s compliance condition in Massachusetts and the results thereof.
- The reporting requirement to the Division referenced in Section 9 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.
- To the extent that Sun Mortgage wishes to increase the Corporation’s assets or expand its mortgage business operations in the Commonwealth by more than fifty (50) percent, Sun Mortgage must submit a written request for such expansion of its business operations. The Commissioner shall consider the information provided in conjunction with the request for expansion and it shall be in the Commissioner's sole discretion to determine whether it would then be appropriate to permit such expansion in the Commonwealth. The Commissioner will at a minimum, consider whether Sun Mortgage has successfully developed and implemented revised internal policies and quality control procedures as set forth in this Consent Order and the findings of the Report.
- Nothing in this Consent Order shall be construed as permitting Sun Mortgage to violate any law, rule, regulation, or regulatory bulletin to which the Corporation 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 Sun Mortgage’s mortgage lender or mortgage broker licenses 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 action 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.
- 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.
- 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 Sun Mortgage.
BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.
Dated at Boston, Massachusetts, this 12th day of December, 2014
David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts