COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
MORTGAGE BROKER LICENSING
Docket No. 2005-024
In the Matter of
NORTHEAST MORTGAGE, LLC d/b/a AMERICORE MORTGAGE (formerly known as)NORTHEAST MORTGAGE, LLC d/b/a NEMORTGAGE
Cranston, Rhode Island
Mortgage Broker License No. MB1939
WHEREAS, Northeast Mortgage, LLC d/b/a Americore Mortgage, Cranston, Rhode Island ("Northeast Mortgage" or the "Company"), a licensed 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 May 2, 2006, 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 broker, Northeast Mortgage agrees to the issuance of this CONSENT ORDER ("ORDER") by the Commissioner of Banks ("Commissioner");
WHEREAS, an examination/inspection of Northeast Mortgage was conducted pursuant to Massachusetts General Laws chapter 255E, section 8, as of February 7, 2005, to assess the Company's level of compliance with applicable Massachusetts statutes and the Division's regulations governing the conduct of those engaged in the business of a mortgage broker in the Commonwealth;
WHEREAS, the Report of Examination/Inspection (the "Report") issued pursuant to the Division's examination/inspection of Northeast Mortgage as of February 7, 2005 alleged significant non-compliance with applicable state and federal statutes, rules, and regulations governing the conduct of those engaged in the business of a mortgage broker in Massachusetts;
WHEREAS, the Report alleged that, during the relevant time period, Northeast Mortgage had engaged in the activities of a mortgage broker in Massachusetts from an unlicensed location in another state in violation of applicable state statutes and regulations pertaining to the licensing of those engaged in the business of a mortgage broker in Massachusetts;
WHEREAS, the Report alleged that Northeast Mortgage failed to immediately notify the Division that, on November 24, 2004, the Rhode Island Department of Business Regulation, Division of Banking issued a NOTICE OF INTENTION TO REVOKE LOAN BROKER LICENSE AND OF OPPORTUNITY FOR A HEARING to the Company, which the Company denies such allegations and is presently involved in an administrative hearing thereon, and
WHEREAS, the Report further alleged that Northeast Mortgage failed to timely notify the Division that, on June 27, 2005, the Rhode Island Department of Business Regulation, Division of Banking issued an ORDER TO CEASE AND DESIST LOAN BROKERING FOR CONSIDERATION AND NOTICE OF INTENTION TO IMPOSE ADMINISTRATIVE ASSESSMENTS to the Company, which the Company denies such allegations and is presently involved in an administrative hearing thereon.
NOW COME the parties in the above-captioned matter, the Division and Northeast Mortgage, and stipulate and agree as follows:
1. Northeast Mortgage has represented to the Division that the Company has ceased engaging directly or indirectly in the business of a mortgage broker in any residential mortgage loan transaction, as those terms are defined under Massachusetts General Laws chapter 255E, section 1, from any location, whether within or without the Commonwealth, without first obtaining a license from the Commissioner for such location in accordance with Massachusetts General Laws chapter 255E, section 2 and applicable published Division Opinions interpreting said statute, and subsequently obtained a license for an additional location as of March 24, 2005.
2. Northeast Mortgage agrees to submit a payment in the amount of twenty five thousand dollars ($25,000.00) in satisfaction of an administrative penalty collected in consideration of Northeast Mortgage's alleged engaging in the business of a mortgage broker at 130 West Canal Street, Suite 2, Winooski, Vermont, without a mortgage broker license from the Commissioner to conduct business at such location during the relevant period.
(a) The administrative penalty shall be satisfied as follows:
(i) Ten thousand dollars ($10,000.00) shall be due and payable within sixty (60) days of the effective date of this ORDER; and
(ii) Fifteen thousand dollars ($15,000.00) shall be due and payable within one hundred and eighty (180) days of the effective date of this ORDER.
(b) Northeast Mortgage shall remit payment(s) pursuant to Sections (2)(a)(i) and (2)(a)(ii) of this ORDER for the amount then due, payable to the "Commonwealth of Massachusetts," to the Office of the Commissioner of Banks, One South Station, 3 rd Floor, Boston, Massachusetts 02110. The Division shall remit the payment(s) for deposit into the General Fund of the Commonwealth.
3. Northeast Mortgage shall immediately review the provisions of the Division's regulation 209 CMR 42.12 and shall thereafter establish, implement, and maintain procedures to ensure that Northeast Mortgage notifies the Division, in writing, of the occurrence of any significant events, in accordance with the regulation's requirements.
4. Northeast Mortgage shall immediately revise its procedures to ensure that all residential mortgage loan applicants are provided with a Loan Origination and Compensation Agreement, completed in accordance with, and in the form specified, by the provisions of the Division's regulation 209 CMR 42.16.
(a) The Company shall establish, implement and maintain procedures to ensure that it retains the original Loan Origination and Compensation Agreement in each loan file for a minimum of three (3) years, as specified in 209 CMR 42.09(1)(b).
5. Northeast Mortgage shall implement and maintain procedures to ensure that, when performing in the capacity of a mortgage broker, the Company refrains from providing any consumer with any disclosure which, pursuant to the applicable statute, regulation, or regulatory bulletin, is intended to be issued exclusively by the lender or creditor in the residential mortgage loan transaction.
6. The Company, when performing in the capacity of a mortgage broker in Massachusetts, shall at all times conduct business exclusively under the business name stated on its mortgage broker license as issued by the Commissioner. Having obtained a mortgage broker license from the Commissioner to conduct business in Massachusetts as "Northeast Mortgage, LLC d/b/a Americore Mortgage," the Company shall conduct business in Massachusetts exclusively as 'Northeast Mortgage, LLC d/b/a Americore Mortgage' or as 'Americore Mortgage.'
7. Northeast Mortgage shall immediately revise its web-site to eliminate any representation or statement that could be considered false, misleading, or have the tendency to be misleading, including, but not limited to, any representation that the Company, a licensed mortgage broker, is authorized to approve or fund a residential mortgage loan. The revisions to the Company's web-site implemented in response to this Section of the ORDER shall further ensure that the Company discloses the type and number of its Massachusetts mortgage broker license in accordance with the Division's regulation 209 CMR 42.15 and the Office of the Attorney General's regulation 940 CMR 8.04(2).
8. Northeast Mortgage shall comply with all laws and regulations applicable to its conducting the business of a mortgage broker in Massachusetts, including, but not limited to, Massachusetts General Laws chapter 255E, and the Division's regulation 209 CMR 42.00 et seq. Such obligations shall necessarily include the duty to address and correct, within twenty (20) days from the effective date of this ORDER, all violations and areas of concern as specified in the Report issued pursuant to the Division's examination/inspection of Northeast Mortgage as of February 7, 2005.
(a) Within twenty (20) days of Northeast Mortgage's receipt of the Report, the Company shall submit to the Commissioner a written response that addresses each of the violations specified in the Report. The written response shall describe the revised policies and procedures adopted by Northeast Mortgage to implement all corrective actions set forth in: (i) the "Examiner's Comments and Conclusions" section of the Report and (ii) the provisions of this ORDER;
(b) Within twenty (20) days from the effective date of this ORDER, Northeast Mortgage shall establish, implement, and maintain quality control standards which provide for a loan review process to assess the Company's compliance with (a) the statutes, rules, regulations, regulatory bulletins, and other relevant provisions of law applicable to those engaged in the business of a mortgage broker in Massachusetts and (b) the revised policies and procedures implemented pursuant to the provisions of this ORDER. Such procedures and policies shall be designed to prevent the recurrence of the violations addressed in the Report; and
(c) Northeast Mortgage shall establish, implement, and maintain procedures and policies to ensure that all applicable staff receive adequate instruction and ongoing, periodic training to address proper implementation and execution of the revised policies and procedures implemented pursuant to this ORDER.
9. On the thirtieth (30 th) day after the end of each calendar quarter following the date of this ORDER, beginning with the calendar quarter ending March 31, 2006, Northeast Mortgage shall furnish written progress reports to the Division, which shall address and include the following:
(a) A description of the form, content, and manner of any actions taken to address each Section of this ORDER and the results thereof;
(b) Written findings, reviewed and signed by an authorized senior officer of the Company, detailing a review of management's and staff's adherence to the policies, programs, and procedures adopted pursuant to this 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 Northeast Mortgage's compliance condition in Massachusetts and the results thereof; and
(c) The reporting requirement to the Division contained in this Section of the 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 ORDER from the Commissioner. It being understood that the Division shall reconsider such reporting requirement upon a review of the findings presented by the next scheduled compliance examination/inspection of the Company.
10. Nothing in this ORDER shall be construed as permitting Northeast Mortgage to violate any law, rule, regulation, or regulatory bulletin to which the Company is subject.
11. In consideration of the foregoing ORDER, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke the Company's mortgage broker license under General Laws chapter 255E, section 6 while this ORDER is in effect.
12. Failure to comply with the terms of this ORDER shall constitute grounds for license suspension and/or revocation pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
13. This ORDER shall become effective immediately upon the date of its issuance.
14. The provisions of this ORDER shall be binding upon Northeast Mortgage, its officers, directors, and their successors or assigns.
15. The provisions of this ORDER shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this ORDER shall have been modified, terminated, suspended, or set aside by the Commissioner or upon an order of a court of competent jurisdiction.
16. This ORDER and the CONSENT AGREEMENT are the complete documents representing the resolution of the matters presented by the Report. There are no other agreements between the Division and Northeast Mortgage.
By ORDER AND direction of the Commissioner of Banks.
Dated at Boston, Massachusetts, this 2nd day of May 2006.
By: Steven L. Antonakes
Commissioner of Banks
Commonwealth of Massachusetts