By the Division of Banks


COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LOAN
ORIGINATOR LICENSING
Docket No. 2015-010-MLO

FINDINGS OF FACT AND
TEMPORARY ORDER TO
CEASE AND DESIST AND
ORDER TO SHOW CAUSE

In the Matter of

AMANDA C. VU

Mortgage Loan Originator License No.: MLO14151


The Commissioner of Banks (Commissioner) having determined that AMANDA C. VU, (Amanda Vu) has engaged in, or is engaging in, or is about to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 255F, and applicable regulations found at 209 CMR 41.00 et seq., hereby issues the following FINDINGS OF FACT AND TEMPORARY ORDER TO CEASE AND DESIST as well as an ORDER TO SHOW CAUSE AND NOTICE OF RIGHT TO A HEARING (collectively referred to as the Order) pursuant to Massachusetts General Laws chapter 255F, section 11(a). 

I. FINDINGS OF FACT AND TEMPORARY ORDER TO CEASE AND DESIST

A. FINDINGS OF FACT AND REGULATORY BACKGROUND

  1. The Division of Banks (Division), through the Commissioner, has jurisdiction over the licensing and regulation of persons and entities engaged in the business of a mortgage loan originator in Massachusetts pursuant to Massachusetts General Laws chapter 255F, section 2 and its implementing regulation at 209 CMR 41.00 et seq.
  2. The Division, through the Commissioner, also has jurisdiction over the licensing and regulation of persons and entities engaged in the business of a mortgage broker in Massachusetts pursuant to Massachusetts General Laws chapter 255E, section 2 and its implementing regulation at 209 CMR 42.00 et seq.
  3. Amanda Vu is licensed by the Commissioner as a mortgage loan originator under Massachusetts General Laws chapter 255F, section 2.  According to records maintained on file with the Division, and the Nationwide Multi-State Licensing System and Registry (NMLS) the Commissioner initially issued a mortgage loan originator license, license number, MLO14151, to Amanda Vu to engage in the business of a mortgage loan originator on or about October 27, 2008.
  4. According to records maintained on file with the Division, and the NMLS, at all relevant times, Amanda Vu was employed as a mortgage loan originator by Community Mortgage Services, Inc. (Community or the Corporation).   
  5. Community is currently licensed as a mortgage broker under Massachusetts General Laws chapter 255E, section 2 with license number MB4853.  According to records maintained on file with the Division and the NMLS, the Commissioner initially issued a mortgage broker license to the Corporation on or about June 23, 2006.  
  6. Victor Vang, is, and at all relevant times has been, the President and sole owner of Community.
  7. Pursuant to Massachusetts General Laws chapter 255E, section 8 and Massachusetts General Laws chapter 255F, section 14, the Division is authorized to inspect the books, accounts, papers, records, and files of mortgage lenders, mortgage brokers and mortgage loan originators, respectively, transacting business in Massachusetts to determine compliance with the provisions of Massachusetts General Laws chapter 255E, chapter 255F, and any rule, or regulation issued thereunder, and with any law, rule, or regulation applicable to the conduct of the licensed business. 
  8. On April 15, 2015, pursuant to the authority granted under Massachusetts General Laws chapter 255E, section 8, the Division commenced an examination of the books, accounts, papers, records and files maintained by Community to evaluate the Corporation's compliance with the laws and regulations applicable to the conduct of a mortgage broker in Massachusetts (2015 examination). 
  9. During the 2015 examination of Community, the Division's examiners determined that Amanda Vu, while employed at Community as a mortgage loan originator, engaged in the practice of manipulating mortgage loan documents by using correction tape to obscure information related to the loan underwriting and approval process as set forth below.  The 2015 examination also revealed that mortgage loan related documents had been altered and borrower’s signatures were cut from various sources and pasted/taped to mortgage loan documents, including, but not limited to, loan applications and mortgage loan disclosures in loan files which Amanda Vu was identified as the mortgage loan originator of record. 
  10. Based on concerns related to the business practices of Community, on May 12, 2015, the Division issued a Findings of Fact and Temporary Cease and Desist (Temporary Order), Docket Number, 2015-009 against Community and Victor Vuthy Vang, individually.  The Temporary Order, incorporated herein by reference, 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 and mortgage loan originator in Massachusetts.

    Prohibited Practices: Unfair or Deceptive Acts and Practices

  11. Massachusetts General Laws chapter 255F, section 15 states, in part:

    It shall be a violation of this chapter for any person to: (a) directly or indirectly employ any scheme, device, or artifice to defraud or mislead borrowers or lenders or to defraud any person; (b) engage in any unfair or deceptive practice toward any person.

  12. Massachusetts General Laws chapter 93A, section 2(a) states:

    Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.

  13. The Division’s regulation 209 CMR 41.10(1), states:

     It is a prohibited act or practice for a Mortgage Loan Originator to engage in conduct prohibited under 209 CMR 42.12A.

  14. The Division’s regulation 209 CMR 41.10(8), states:

    It is a prohibited act or practice for a Mortgage Loan Originator to directly or indirectly employ any scheme, device, or artifice to defraud or mislead borrowers or lenders or to defraud any person.

  15. The Division’s regulation 209 CMR 41.10(9), states:

    It is a prohibited act or practice for a Mortgage Loan Originator to engage in any unfair or deceptive practice toward any person.

  16. The Division’s regulation 209 CMR 41.10(21), states:

    A violation of 209 CMR 41.10 shall constitute grounds for the issuance of a cease and desist order or for license suspension, revocation, or refusal to renew under M.G.L. c. 255F, § 11(a); shall constitute grounds for a civil assessment under M.G.L. c. 255F, § 11(b); and shall constitute grounds for a Prohibition Notice under M.G.L. c. 255F, §11(d).

  17. During the course of the 2015 examination, the Division’s examiners became aware of alterations made to loan disclosures.  The examiners identified two loan disclosures, which had been completed in wet ink; however, the borrower’s signatures were copied onto the documents.  The loan file identified Amanda Vu as the mortgage loan originator of record.
  18. Based upon concerns related to the discovery of the altered mortgage loan disclosures, the Division’s examiners expanded the scope of the 2015 examination and requested that the Corporation produce additional loan files for the Division’s review.  The Division’s examiners discovered that in multiple loan files which identified Amanda Vu as the loan originator of record, additional documents had been manipulated and correction tape had been utilized to change fees and other pertinent information.  In addition, the Division’s examiners discovered further alterations including altered borrower signatures. 
  19. Based on the foregoing, the Division’s examiners attempted to review all documentation contained in the Corporation’s shred bins.  Community’s representatives notified the Division’s examiners that the Corporation did not have immediate access to the documents in the shred bins as a third party provider serviced the shred bins.  As a result, on April 27, 2015, the Division’s examiners sealed the shred bins and returned on April 29, 2015, at which time, the shred bin provider granted the Division’s examiners access to the shred bins.
  20. A review of the documentation recovered in Community’s shred bins and loan files revealed: fabricated mortgage loan related documents reproduced by affixing signatures from previously received correspondence onto mortgage loan related documents; the utilization of  correction tape to alter fees, the identity of mortgage loan originators, dates, and borrower information on mortgage loan documents provided to prospective borrowers; and the reproduction of  borrowers’ signatures on mortgage loan documents required by the lender to process loan applications.  The loan files reviewed by the Division’s examiners identified both Amanda Vu and Victor Vang as the mortgage loan originators of record.  The following examples of loan documents that were manipulated were those loans that identified Amanda Vu as the mortgage loan originator of record.
    1. Borrower A:
      1. The loan application identified Amanda Vu as the loan originator of record.  A review of Borrower A’s loan file revealed that correction tape was used to alter the date the borrower signed the loan application. 
      2. A review of the 4506-T form revealed that correction tape had been used to modify the borrower’s home address and co-borrower’s name.  In addition, the date which the Loan Origination and Compensation Agreement was provided had been altered with correction tape and the interest rate on the Lender’s Anti-Steering Loan Options disclosure had been altered using correction tape.
      3. While reviewing the Lender’s Anti-Steering Loan Options disclosure, Massachusetts License Disclosure, and loan application, the Division’s examiners became aware that the co-borrower’s signature was being cut and pasted onto loan related documents, as the signature appeared to be identical on all documents.
      4. While reviewing the Loan Origination and Compensation Agreement, the Division’s examiners discovered that the loan originator’s name, signature and borrowers’ addresses were handwritten in ink on a photocopied document, giving the appearance that borrowers’ previously signed an agreement containing different information.   
    2. Borrower B:
      1. The loan application identified Amanda Vu as the loan originator of record.  During the initial loan file review, the Division’s examiners reviewed Borrower B’s loan file, but did not discover any altered mortgage loan documents.
      2. Upon review of the documents in the shred bins, the Division’s examiners discovered that Borrower B’s signature had been cut from the initial Anti-Steering Loan Options disclosure and pasted onto a new Anti-Steering Loan Options disclosure which contained different and less favorable terms for Borrower B, than the initial Anti-Steering Loan Options disclosure. 
      3. A review of additional documents in the shred bins revealed that the “Information for Government Monitoring Purposes” section of the loan application which contained mortgage loan origination information, including, the loan originator’s signature and the borrower’s signature had been cut and pasted onto revised versions of pages 3 and 4 of Borrower B’s loan application.  Additionally, the Division’s examiners discovered that Borrower B’s signature had been reproduced on the backside of the Borrower’s Certification and Authorization Disclosure in an attempt to replicate Borrower B’s signature on various loan documents. 
    3. Borrower C:
      1. The loan application identified Amanda Vu as the loan originator of record.  Upon review of documents contained in the shred bins, the Division’s examiners discovered that correction tape had been used on the loan application to change the identity of the mortgage loan originator from Victor Vang to Amanda Vu.  The Division’s examiners also determined that signature portion of the loan application had been cut and pasted to conceal the use of correction tape. 
  21. Upon information and belief, the manipulated documents as described in the above referenced Paragraph 20 were submitted and relied on by the mortgage lenders to which the mortgage loans were originated by Amanda Vu and brokered by Community.
  22. Upon information and belief, Amanda Vu, as a mortgage loan originator acting on behalf of Community, submitted fabricated and altered documentation to mortgage lenders relative to Massachusetts residential mortgage loans which were originated by Amanda Vu.  It is unknown how many Massachusetts consumers have been affected by Amanda Vu’s lack of compliance with Massachusetts rules and regulations, or if the practice is continuing to date.
  23. Amanda Vu as a mortgage loan originator acting on behalf of Community, knew or should have known that the mortgage lender or financial institution would rely upon the all information submitted to them in underwriting the mortgage loan.

    B. CONCLUSIONS OF LAW

  24. Based upon the information contained in Paragraphs 1 through 23, Amanda Vu has failed to demonstrate and maintain the financial responsibility, character, reputation, integrity, and general fitness such as to command the confidence of the community and to warrant a determination that she will operate honestly, fairly, soundly and efficiently in the public interest, as a mortgage loan originator in violation of Massachusetts General Laws chapter 255F, section 4 and the Division's regulation 209 CMR 41.04(2)(d).
  25. Based upon the information contained in Paragraphs 1 through 23, by manipulating loan documents, cutting and pasting signatures to affix them on mortgage loan documents, and altering mortgage loan documents using correction tape, Amanda Vu  a mortgage loan originator, acting on behalf of Community, has employed  a scheme, device, or artifice, or permitted a scheme, device, or artifice to be employed, to defraud or mislead lenders and/or defraud any person in violation of Massachusetts General Laws chapter 255F, section 15, Massachusetts General Laws chapter 93A, section 2(a), and the Division’s regulations 209 CMR 41.10(1), 209 CMR 41.10(8) and 209 CMR 41.10(9).
  26. Based upon the information contained in Paragraphs 1 through 23, the public interest will be harmed by delay in issuing an Order under Massachusetts General Laws chapter 255F, section 11(a) because, it is unknown how many other consumers have been affected or will be affected by Amanda Vu’s practices.  The Division continues to investigate the extent of consumer harm inflicted by Amanda Vu’s actions during her employment at Community, but given the severity of consumer harm incurred the Division has cause to believe that the public interest will be harmed by a delay in issuing this Order pending the completion of the Division’s 2015 examination.
  27. Based upon the information contained in Paragraphs 1 through 23, the Commissioner has determined that:
    1. Amanda Vu has engaged in, is engaging in, or is about to engage in, acts or practices which warrant the belief that she is not operating honestly, fairly, soundly and efficiently in the public interest in violation of standards governing the licensing and conduct of a mortgage loan originator including, but not limited to, the provisions of  Massachusetts General Laws chapter 255F and the Division’s regulations at 209 CMR 41.00 et seq.; and
    2. The public interest will be irreparably harmed by delay in issuing an ORDER TO CEASE AND DESIST to Amanda Vu.
  28. Based upon the information contained in Paragraphs 1 through 23, had the facts and conditions found therein existed at the time of Amanda Vu’s original mortgage loan originator license application, the Commissioner would have been warranted in refusing to issue such license pursuant to Massachusetts General Laws chapter 255F, section 4  and the Division’s regulation 209 CMR 41.05.  Further, the facts and conditions set forth in Paragraphs 1 through 23 present sufficient grounds for the revocation of Amanda Vu’s mortgage loan originator license pursuant to Massachusetts General Laws chapter 255F, section 11(a) and the Division's regulation at 209 CMR 41.10(21), and the issuance of an order of prohibition pursuant to Massachusetts General Laws chapter 255F, section 11(d).

    C. ORDER TO CEASE AND DESIST

  29. After taking into consideration the FINDINGS OF FACT and CONCLUSIONS OF LAW stated herein, it is hereby:
  30. ORDERED that Amanda Vu shall immediately cease engaging in the activities of a mortgage loan originator, as those activities are defined under Massachusetts General Laws chapter 255F, section 1, relative to any residential property in Massachusetts.  Therefore, Amanda Vu is ordered to immediately cease soliciting, accepting, or further originating, either directly or indirectly, any residential mortgage loan applications from consumers for residential property located in Massachusetts.
  31. IT IS FURTHER ORDERED that this Order shall become effective immediately and shall remain in effect unless set aside, limited, or suspended by the Commissioner or upon court order after review under Massachusetts General Laws chapter 30A.
  32. IT IS FURTHER ORDERED that this Order shall not be construed as approving any act, practice, or conduct not specifically set forth herein which was, is, or may be in violation of relevant state or federal laws and regulations.

    II. ORDER TO SHOW CAUSE AND NOTICE OF RIGHT TO A HEARING

    A. VIOLATIONS

    NOW, THEREFORE, based upon the Findings of Fact set forth above, the Division hereby sets forth the following Charges against Amanda Vu:

  33. The Division hereby re-alleges and incorporates by reference the Findings of Fact presented in Paragraphs 1 through 23 of the Order as though fully set forth.
  34. The Division hereby re-alleges and incorporates by reference the Conclusions of Law presented in Paragraphs 24 through 28 of the Order as though individually set forth as separate Charges providing the basis of this Order to Show Cause.

    B. ORDER TO SHOW CAUSE

  35. WHEREAS, finding it necessary and appropriate and in the public interest, and consistent with the purposes of the laws governing licensed mortgage loan originators in the Commonwealth;
  36. WHEREAS, Pursuant to Massachusetts General Laws chapter 255F, section 11(d), the Commissioner may issue a written notice of intention to prohibit a person from any further actions, in any manner, as a mortgage loan originator in Massachusetts or to prohibit that person from being employed by, as agent of, or operating on behalf of a mortgage loan originator or any other business which requires a license from the Commissioner; and
  37. WHEREAS, finding that the Charges set forth above, if found to be true and correct, form the legal basis for the action sought to be taken under Massachusetts General Laws chapter 255F, section 11(d).
  38. IT IS HEREBY ORDERED that Amanda Vu shall show cause why her mortgage loan originator license, MLO14151 should not be revoked pursuant to Massachusetts General Laws chapter 255F, section 11.
  39. IT IS FURTHER ORDERED that Amanda Vu shall show cause why she should not be prohibited from any further actions, in any manner, as a mortgage loan originator in Massachusetts or from being employed by, as agent of, or operating on behalf of a mortgage loan originator or any other business which requires a license under Massachusetts General Laws chapter 255E or 255F or any other business which requires a license from the Commissioner.

    C. PRAYER FOR RELIEF

  40. WHEREFORE, the Division, by and through the Commissioner, prays for a final decision as follows:
    1. For a final Agency decision in favor of the Division and against Amanda Vu for each Charge set forth in this Order;
    2. For a final Agency decision revoking Amanda Vu’s mortgage loan originator license, number MLO14151 to conduct business as a mortgage loan originator  in Massachusetts;
    3. For a final Agency decision prohibiting Amanda Vu from any further actions, in any manner, as a mortgage loan originator in Massachusetts or from being employed by, as agent of, or operating on behalf of a mortgage loan originator or any other business which requires a license under Massachusetts General Laws chapter 255E or 255F or any other business which requires a license from the Commissioner;
    4. For costs and fees of the Division’s investigation of this matter; and for such additional equitable relief as the Presiding Officer may deem just and proper.

      D. NOTICE OF RIGHT TO A HEARING

  41. Amanda Vu or her authorized representative may file a written request for a hearing as to the Temporary Order to Cease and Desist within twenty-one (21) days.  If no hearing is requested within this twenty-one (21) day period, the Temporary Order shall become permanent and final until it is modified or vacated by the Commissioner.
  42. Amanda Vu or her authorized representative is required to file an Answer or otherwise respond to the Charges contained in this Order within twenty-one (21) days of its effective date, pursuant to the Standard Adjudicatory Rules of Practice and Procedure, 801 CMR 1.01 (6)(d).  Failure to file an Answer may also result in a default judgment against Amanda Vu in the matter of the revocation of her mortgage loan originator license and the issuance of an Order of Prohibition.  The Answer, and any subsequent filings that are made in conjunction with this proceeding, shall be directed to the Division, with a copy to Prosecuting Counsel.

    All papers filed with the Division shall be addressed to the attention of:

       Administrative Hearings Officer
       Division of Banks
       1000 Washington Street, 10th Floor
       Boston, Massachusetts 02118

    Prosecuting Counsel for this matter is:

       Nicole Palumbo, Esq.
       Division of Banks
       1000 Washington Street, 10th Floor
       Boston, Massachusetts 02118

  43. You are further advised that Amanda Vu has the right to be represented by counsel or other representative, to call and examine witnesses, to introduce exhibits, to cross-examine witnesses who testify against Amanda Vu, and to present oral argument.  The hearing will be held at a date and time to be determined and will be conducted according to Massachusetts General Laws, chapter 30A, sections 10 and 11, and the Standard Adjudicatory Rules of Practice and Procedure, 801 CMR 1.01 and 1.03.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 88th day of May, 2015

Cynthia A. Begin
Chief Risk Officer
Commonwealth of Massachusetts