By the Division of Banks


COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER
LICENSING
Docket No. 2014-022

CONSENT ORDER

In the Matter of

VILLAGE MORTGAGE COMPANY
Avon, Connecticut

Mortgage Lender License No. ML6331


WHEREAS, VILLAGE MORTGAGE COMPANY, Avon, Connecticut, (Village Mortgage or the Company), a licensed mortgage lender 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 February 27, 2015, 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, Village Mortgage agrees to the issuance of this CONSENT ORDER (Consent Order) by the Commissioner of Banks (Commissioner);

WHEREAS, on January 3, 2013 the Commissioner and Village Mortgage entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER, Docket No. 2010-239 (2013 Consent Order) for the purpose of settling the matters raised during a 2009 Examination of Village Mortgage’s books and records; 

WHEREAS, an examination of Village Mortgage was conducted pursuant to General Laws chapter 255E, section 8, as of November 25, 2013 to assess the Company’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, as well as to assess the Company’s compliance with the 2013 Consent Order;

WHEREAS, an examination of Village Mortgage was conducted pursuant to General Laws chapter 255E, section 8, as of November 25, 2013 to assess the Company’s lending performance under Mortgage Lender Community Investment standards described in the Division’s regulation 209 CMR 54.00 et seq.;

WHEREAS, the Report of Examination (the Report) issued pursuant to the Division’s examination of Village Mortgage alleged substantial non-compliance with applicable state and federal statutes, rules, and regulations governing the conduct of those engaged in the business of mortgage lender in the Commonwealth;

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

WHEREAS, by mutual agreement of the Company and the Division, the 2013 Consent Order is hereby superseded and replaced by this Consent Order.

ORDER

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

  1. Village Mortgage must establish, implement, and maintain policies and procedures to ensure that the Company does not engage in the business of a mortgage lender for residential property located in Massachusetts from any location, whether within or without the Commonwealth, for which the Company has not previously obtained approval from the Commissioner for such location in accordance with Massachusetts General Laws chapter 255E, section 5. 
    1. Village Mortgage shall submit a payment in the amount of five thousand dollars ($5,000.00) in satisfaction of an administrative penalty collected in consideration of the Company’s conducting mortgage activity at an unapproved branch location. Village Mortgage shall remit payment in full of the amount indicated above, payable to the “Commonwealth of Massachusetts,” with the executed copy of the Consent Agreement, to the Division of Banks, Attn: Mortgage Lender Examination Unit, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118. 
  1. Village Mortgage must employ a strong focus and pro-active commitment to community development activities that meet the definition of community development under the Division’s regulation 209 CMR 54.12.
  2. Village Mortgage must expand its independent audits to include compliance with the laws and regulations governing fair lending, including but not limited to the Home Mortgage Disclosure Act (HMDA), 12 U.S.C. section 2801 et seq., as implemented by the CFPB regulation 12 C.F.R. Part 1003 (Regulation C); and the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691 et seq., as implemented by the Consumer Financial Protection Bureau’s (CFPB) regulation 12 C.F.R. 1002 (Regulation B).  Such audits must be designed to review Village Mortgage’s monitoring and oversight efforts.  Such audits also must be designed to review Village Mortgage’s efforts to treat consumers fairly and consistently. 
  3. Village Mortgage must establish, implement, and maintain policies and procedures to monitor the distribution of mortgage lending in Massachusetts, with particular attention on loans secured by property in low- and moderate- income census tracts.  Such monitoring must be designed to assess the suitability of products offered to consumers in all income levels.  In addition, the Company’s monitoring efforts must include an evaluation of Village Mortgage’s marketing efforts to ensure that consumers in all income levels are served proportionately.
  4. Village Mortgage must establish, implement, and maintain policies and procedures to ensure that each mortgage loan applicant whose loan application is denied by the Company is provided, in writing, at the time of the denial with a notice of his/her right to appeal the denial to the appropriate mortgage review board, pursuant to Massachusetts General Laws chapter 167, section 14A. For each consumer loan file, a completed copy of the disclosure form must be retained in the Company’s books and records as evidence of compliance.
  5. Village Mortgage must establish, implement, and maintain policies and procedures to ensure that the Company’s license type and number are disclosed to consumers at the time a fee is paid or a mortgage application is accepted, as required pursuant to the Division’s regulation 209 CMR 42.15.
  6. Village Mortgage must establish, implement, and maintain policies and procedures to ensure that late charges referenced in the Truth-in-Lending statement are not in excess of the amount permitted under Massachusetts General Laws chapter 183, section 59. 
  7. Village Mortgage must establish, implement, and maintain policies and procedures to ensure that the Company provides the Servicing Disclosure Statement in accordance within the timing requirements set forth in the CFPB’s regulation 12 C.F.R. 1024.21(b).
  8. Village Mortgage must establish, implement, and maintain policies and 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 Company and of the mortgage loan originator who acted on behalf of the mortgage broker, as required under Massachusetts General Laws chapter 183, section 6D.
  9. Village Mortgage must revise the Company’s policies and procedures to ensure that all Annual Reports to the Commissioner, quarterly reports to the Commissioner, and any other required reports provided to the Division are completed accurately and submitted on a timely basis.
  10. Village Mortgage must establish, implement, and maintain policies and procedures to ensure that the Company provides all Massachusetts consumers with a privacy policy that is in compliance with the CFPB’s regulation 12 C.F.R. 1016.4.
  11. Village Mortgage must address all matters requiring attention set forth in the Report within the time frames contained therein; and must also take all corrective actions specified in the Report. 
    1. Village Mortgage must establish, implement, and maintain procedures and policies to ensure that all applicable personnel 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, Village Mortgage 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 Village 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 Village Mortgage’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. Village Mortgage agrees that, in the event that the Company fails to submit the payments set forth in this Consent Order in the amounts specified herein and in accordance with applicable deadlines, the Division shall be authorized to submit a claim for such amounts against the mortgage lender Massachusetts surety bond maintained by Village Mortgage pursuant to the Division’s regulation 209 CMR 42.03(2)(a).
  3. Nothing in this Consent Order shall be construed as permitting Village Mortgage to violate any law, rule, regulation, or regulatory bulletin to which the Company is subject.
  4. In consideration of the foregoing Consent Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke Village Mortgage’s mortgage lender license under Massachusetts General Laws chapter 255E, section 6, while this Consent Order is in effect, but subject to Section 18.
  5. 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.
  6. This Consent Order shall become effective immediately upon the date of its issuance.
  7. 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.
  8. 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 Village Mortgage.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 27th day of February, 2015

David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts