By the Division of Banks


 

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
Docket No. 2017-003

CONSENT ORDER

In the Matter of

SILVA BROS. INVESTMENT, INC.
Lowell, Massachusetts


WHEREAS, SILVA BROS. INVESTMENT, INC. (“Silva Bros.” or the “Company”),  holding no license with the Massachusetts Division of Banks (“Division”), have been advised of their rights 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 dated May 11, 2017, whereby, solely for the purpose of settling this matter, Silva Bros. agree to the issuance of this CONSENT ORDER (“Consent Order”) by the Commissioner of Banks (“Commissioner”);

WHEREAS, the Division of Banks, through the Commissioner, has jurisdiction over the licensing and regulation of persons engaged in the business of residential mortgage lending in Massachusetts pursuant to Massachusetts General Laws chapter 255E, section 2;

WHEREAS, the Division, through the Commissioner, 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, Silva Bros., at all relevant times, has been a Massachusetts corporation doing business in the Commonwealth with its main office located at 850 Chelmsford Street Lowell, Massachusetts;

WHEREAS, Nair Santos, at all relevant times has been the President and authorized signatory of Silva Bros.;

WHEREAS, the Division alleges that Silva Bros. engaged in unlicensed residential mortgage lending in violation of Massachusetts General Laws chapter 255E, section 2, and that Nair Santos engaged in unlicensed residential mortgage loan origination in violation of Massachusetts General Laws chapter 255F, section 2;

 WHEREAS, the Division alleges that Silva Bros. wrongfully charged fees in violation of Massachusetts General Laws chapter 183, section 59 and Massachusetts General Laws chapter 93A, section 2.          

WHEREAS, the Division alleges that Silva Bros. failed to comply with applicable regulations, including the Real Estate Settlement Procedures Act (RESPA).

WHEREAS, the parties now seek to resolve by mutual agreement, the matters identified in this Order;

WHEREAS, without this Consent Order constituting an admission by Silva Bros.  of any allegations made or implied by the provisions of this Order; solely for the purpose of settlement of all alleged violations without protracted administrative proceedings and judicial review, Silva Bros. hereby waive all rights to complete the hearing process relative to this proceeding and affirm that Silva Bros. is willing to take all necessary action as set forth in this Consent Order;

 

ORDER

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

  1. Silva Bros. shall establish, implement, and maintain policies and procedures to ensure that the Company complies with all of the requirements set forth in applicable state and federal laws, rules, regulations, and regulatory bulletins governing the conduct of mortgage lender making fewer than five mortgage loans within any period of twelve consecutive months as applicable by Massachusetts General Laws chapter 255E and RESPA as laid out in 12 CFR 1024 et seq.  This includes providing Annual Escrow Account Disclosure Statements to existing residential mortgage loan borrowers as laid out in 12 CFR 1024.17.
  2. Silva Bros. shall ensure all that all of its employees refrain from negotiating, soliciting, arranging, providing or accepting any Massachusetts residential mortgage loan application, or assisting any consumer in completing such application, or otherwise operate as a mortgage loan originator, as that term is defined under General Laws chapter 255F, section 1 until such time as the Silva Bros. employee responsible for these activities receives the appropriate license from the Division. 
  3. Silva Bros. shall establish, implement, and maintain policies and procedures to ensure that Company employees and directors comply with all of the requirements set forth in applicable state and federal laws, rules, regulations, and regulatory bulletins governing the conduct of mortgage lender making fewer than five mortgage loans within any period of twelve consecutive months as applicable by Massachusetts General Laws chapter 255E and RESPA as laid out in 12 CFR 1024 et seq.
  4. Silva Bros. shall immediately establish, implement, and maintain policies and procedures to ensure that the Company does not collect or assess any interest and fees in excess of the amounts permitted under Massachusetts General Laws chapter 183, section 59 and Massachusetts General Laws chapter 93A, section 2. 
    1. As of the date hereof Silva Bros. certifies and the Division acknowledges that Silva Bros. has conducted a portfolio review of all residential mortgage loans currently open or originated after 2012 to ensure that:
      1. Going forward no late fees are assessed before a payment is 15 days late in compliance with Massachusetts General Laws chapter 183, section 59.
      2. Going forward no prepayment penalties are assessed against consumers whose loan is closed due to a foreclosure.
      3. Silva Bros. has identified and reimbursed all Massachusetts consumers who paid any late fees in excess of the amount permitted under Massachusetts General Laws chapter 183, section 59.
      4. Silva Bros. has identified and reimburse all Massachusetts consumers who were assessed a prepayment penalty after their loan was closed due to a foreclosure.
    1. Silva Bros. has submitted to the Division evidence of all consumer reimbursements issued under Paragraph 4(a)(iii) and (iv) including but not limited to: the consumer’s name, the loan number, the amount reimbursed, the date of reimbursement, and the check number.
    2. Any reimbursement payments were mailed to the consumer’s last known address in the Company’s records. If the address is invalid, the reimbursement payment will be sent to the address set forth for such borrower in the U. S. Postal Service national change of address database (NCOA Database).  If joint borrowers have different addresses, the reimbursement payment will be mailed to the address of the primary borrower.
    3. In no event shall Silva Bros. retain any consumer refund. If consumer refunds cannot be distributed for any reason after six (6) months from the effective date of this Order, then the Company shall turn over the unclaimed refunds to the Commonwealth’s Department of the Treasurer as unclaimed property in the name of the consumers, in accordance with the Division’s instructions.
  1. Silva Bros. shall pay an administrative penalty to the Division in the amount of twenty thousand dollars ($20,000).  Payment shall be made to the Division within seven (7) days of the effective date of this Order by check payable to the “Commonwealth of Massachusetts,” mailed to the Division of Banks, Attn: Consumer Finance Licensing Unit, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118.
  2. No part of this agreement impacts the Commissioner’s discretion set forth within Massachusetts General Laws chapter 255F, and the Division’s regulation 209 CMR 41.00 et seq. in determining whether to issue the relevant license  or any Silva Bros. employee, provided however, that any such complete license application shall not be denied  as a result of any of the issues resolved by this Consent Order or because Silva Bros. entered into this Consent Order or agreed to the issuance of this Consent Order. The Division acknowledges that Silva Bros. has been extremely cooperative and forthcoming in this matter.
  3. This Consent Order shall constitute a final resolution of the Division’s concerns regarding allegations of unlicensed residential mortgage lending, and wrongfully charged fees between January 2013 and December 2016.  The provisions of this Consent Order shall not limit, estop, or otherwise prevent any other state agency or department, from taking any other action affecting Silva Bros.  Nothing in this Consent Order shall pertain to or effect commercial lending conducted by Silva Bros.
  4. This Consent Order shall become effective immediately upon the date of its issuance.
  5. In accordance with the terms of the Consent Agreement entered by Silva Bros., and the Commissioner and Silva Bros. have waived all rights of appeal that they may have relative to the Temporary Order and this Consent Order or any of its provisions.
  6. 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.
  7. 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 and the Consent Agreement.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 11th day of May, 2017

By: Terence A. McGinnis
Commissioner of Banks
Commonwealth of Massachusetts