By the Division of Banks
COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
MORTGAGE LENDER AND MORTGAGE LOAN ORIGINATOR LICENSING
Docket No. 2014-011 CO
In the Matter of
NETWORK CAPITAL FUNDING CORPORATION
Mortgage Lender License No. ML11712
WHEREAS, NETWORK CAPITAL FUNDING CORPORATION, (Network Capital or Corporation), a mortgage lender currently under an administrative action through an ORDER TO SHOW CAUSE AND NOTICE OF RIGHT TO HEARING, Docket No., 2014-011 (Order and Notice) and supervised 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 15, 2015, whereby, solely for the purpose of settling this matter, Network Capital agrees to the issuance of this CONSENT ORDER (Consent Order) by the Commissioner of Banks (Commissioner);
WHEREAS, the Division, through the Commissioner, has jurisdiction over the licensing and regulation of persons and entities engaged in the business of a mortgage lender in Massachusetts pursuant to Massachusetts General Laws chapter 255E, section 2 and its implementing regulation 209 CMR 42.00 et seq.;
WHEREAS, the Division, through the Commissioner, also 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;
WHEREAS, Network Capital, at all relevant times, has been a foreign Corporation, with its main office located at 5 Park Plaza, #800, Irvine, California;
WHEREAS, Tri Minh Nguyen, according to the Division’s records, is the Chief Executive Officer and sole owner of Network Capital;
WHEREAS, an examination of Network Capital was conducted pursuant to General Laws chapter 255E, section 8, as of March 3, 2014 (2014 Examination) 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 in the Commonwealth;
WHEREAS, the Division's Report of Examination (Report) which was issued to Network Capital on June 30, 2014, presented the findings of the 2014 Examination and alleged failures to comply with applicable state and federal statutes, rules, and regulations governing the conduct of those engaged in the business of a mortgage lender in Massachusetts;
WHEREAS, on, June 30, 2014, based on the findings of the 2014 Examination, the Division issued the Order and Notice, incorporated herein, against Network Capital;
WHEREAS, on or about July 21, 2014, Network Capital, through counsel, filed a response to the Order and Notice. By the response to the Order and Notice, Network Capital reserved the right to proceed to an administrative hearing in accordance with Massachusetts General Laws chapter 30A;
WHEREAS, according to the Nationwide Multi-State Licensing System & Registry (NMLS), Network Capital did not request renewal of the Corporation’s Massachusetts mortgage lender license for calendar year 2015 and Network Capital’s license status as of January 1, 2015 was “Terminated-Failed to Renew.” As of March 1, 2015, Network Capital’s license status was updated to “Terminated- Expired”;
WHEREAS, Network Capital and any and all officers, directors, employees, or managers or their successors or assigns operating on behalf of Network Capital have ceased engaging in the activity of a mortgage lender in Massachusetts, as that term is defined under General Laws chapter 255E, and the Division’s regulation 209 CMR 42.00, et seq.;
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 Network Capital 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, Network Capital 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; and
WHEREAS, in recognition of the Division and Network Capital 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 on this 15th of April, 2015.
- To the extent that Network Capital or any of its owners, or their successors or assigns wish to engage in the business of a mortgage lender, or mortgage broker, Network Capital must at a minimum, ensure that the Corporation has established, implemented and maintained time-tested policies, procedures and practices to effectuate a satisfactory compliance management system which is in compliance with Massachusetts laws and regulations at all levels of its operations. Evidence of compliance with this provision will be in the form of an Audit for a minimum of five (5) audit cycles from the effective date of this Consent Order. Network Capital must obtain prior written approval from the Division of the auditing firm proposed before such engagement and review is initiated. The Division shall also review and approve the scope of the Audit which shall at a minimum address all findings detailed in the Report and all allegations as set forth in the Order and Notice.
- To the extent that Network Capital or any of its owners, or their successors or assigns, wish to receive a license to engage in the business as a mortgage broker or mortgage lender, Network Capital or any of its owners, or their successors or assigns, shall be required to submit a completed application to engage in the business of a mortgage lender or mortgage broker in Massachusetts. Such application shall be subject to the requirements of Paragraph 1 of this Consent Order. It being expressly understood and agreed that all of the allegations set forth in the Order and Notice and the results of all Audits may be taken into account by the Commissioner in connection with any future application submitted by Network Capital and/or such individual for any such application. The Commissioner shall have all of the discretion set forth within General Laws chapter 255E section 4, and the Division’s regulation at 209 CMR 42.00 et seq., in determining whether to issue a license to conduct such business.
- Within sixty (60) days of the effective date of this Consent Order, Network Capital must conduct a review of all Massachusetts loans closed from June 30, 2012 to July 1, 2014, and identify cases where borrowers were charged per diem interest during the period between the funding date noted on the HUD-1 that was signed at closing and the date the funds were disbursed to the borrowers. Network Capital must reimburse all borrowers the full amount of interest collected during that period.
- Within ninety (90) days of the effective date of this Consent Order, Network Capital must submit to the Division evidence of such reimbursements, including the consumer’s name, the date of the loan and loan number, the amount reimbursed, the check number and certified mail receipts to illustrate the consumers’ receipt of the reimbursements.
- Network Capital 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 Massachusetts surety bond maintained by Network Capital pursuant to the Division's regulation 209 CMR 42.03(2)(a).
- The provisions of this Consent Order shall be binding upon Network Capital and its owners, or their successors or assigns.
- In accordance with the terms of the Consent Agreement entered by Network Capital and the Commissioner, Network Capital has waived all rights of appeal that it may have relative to the Order and Notice.
- 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, promises, representations, or warranties other than those set forth in this Consent Order.
- 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 15th day of April, 2015.
David J. Cotney
Commissioner of Banks