COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
Docket No. 2010-222
FINDINGS OF FACT AND
TEMPORARY ORDER TO
CEASE AND DESIST
In the Matter of
FIRST FIDELITY MORTGAGE COMPANY, INC.
Mortgage Broker License No(s). MB0310
The Commissioner of Banks ("Commissioner") having determined that FIRST FIDELITY MORTGAGE COMPANY, INC. ("FIRST FIDELITY" or the "Licensee"), with its main address located at 20 East Main Street, Marlborough, Massachusetts, 01752, has engaged in, or is engaging in, or is about to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 255E and applicable regulations found at 209 CMR 42.00 et seq., hereby issues the following FINDINGS OF FACT AND TEMPORARY ORDER TO CEASE AND DESIST ("Temporary Order") pursuant to General Laws chapter 255E, section 7(b) and chapter 255F, section 11(a).
FINDINGS OF FACT
- 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 lender and mortgage broker in Massachusetts pursuant to Massachusetts General Laws chapter 255E, section 2.
- 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.
- FIRST FIDELITY is, and at all relevant times has been, a Massachusetts licensed mortgage broker doing business in the Commonwealth.
A. Failure to Submit Annual Report
- Massachusetts General Laws chapter 255E, section 8 states, in part:
Each licensee shall annually, on or before a date determined by the commissioner, file a report with the commissioner containing such information as said commissioner may require concerning the business and operations conducted by the licensee in the commonwealth during the preceding calendar year.
- The Division's regulation 209 CMR 42.10 states:
By March 31, each Licensee shall file an annual report with the Commissioner in such form as the Commissioner shall prescribe for the preceding calendar year. The annual report shall be in writing, subscribed by the Licensee under the pains and penalty of perjury.
- The 2010 license renewal instructions issued by the Division on October 22, 2009, and the subsequent reminder notice on March 16, 2010, notified all licensed mortgage brokers and mortgage lenders of the requirement that all licensees were required to submit to the Division a completed Mortgage Lender/Mortgage Broker Annual Report for the period ending December 31, 2009 ("Mortgage Lender/Mortgage Broker 2009 Annual Report") by March 31, 2010. In both sets of instructions, licensees were notified that a $50.00 per calendar day late fee would be assessed to all licensees that failed to submit the Mortgage Lender/Mortgage Broker 2009 Annual Report by March 31, 2010.
- As of the date of this Temporary Order, the Licensee has failed to file a Mortgage Lender/Mortgage Broker 2009 Annual Report.
- On December 31, 2009, FIRST FIDELITY, through a duly appointed and authorized representative, affirmed a series of attestations in completing the Company's Massachusetts license renewal application through the NMLS (the "Renewal Attestation"). The Renewal Attestation provided that the licensee acknowledged and agreed to expediently update and correct the information in the licensee's NMLS record as it changed.
- FIRST FIDELITY's Renewal Attestation further provided that the licensee acknowledged an understanding, and agreed to comply with, the laws and regulations pertaining to the conduct of the licensed business.
- On or about May 13, 2010, the Division issued a Final Notice to FIRST FIDELITY, providing notification of the deficiencies with FIRST FIDELITY's license renewal status and directing FIRST FIDELITY to comply with the license renewal process by supplying the outstanding renewal requirements identified in paragraph(s) 4 through 9. The directive required the Company to respond with all applicable information by no later than May 24, 2010. As of the date of this Temporary Order, FIRST FIDELITY has failed to submit all, or part of, the required documentation to the Division.
CONCLUSIONS OF LAW
- Based upon the information contained in Paragraphs 1 through 10, by failing to file its Mortgage Lender/Mortgage Broker 2009 Annual Report, FIRST FIDELITY has violated Massachusetts General Laws chapter 255E, section 8 and 209 CMR 42.10.
- Based upon the information contained in Paragraphs 1 through 10, the Commissioner has determined that:
- FIRST FIDELITY has engaged in, is engaging in, or is about to engage in, acts or practices which warrant the belief that it is not operating honestly, fairly, soundly and efficiently in the public interest in violation of standards governing the licensing and conduct of a mortgage lender and mortgage broker including, but not limited to, the provisions of the Division's regulations at 209 CMR 42.00 et seq.; and
- The public interest will be irreparably harmed by delay in issuing an ORDER TO CEASE AND DESIST to FIRST FIDELITY.
- Based upon the information contained in Paragraphs 1 through 10, had the facts and conditions found therein existed at the time of FIRST FIDELITY'S original mortgage broker license application, the Commissioner would have been warranted in refusing to issue such license(S). Further, the facts and conditions set forth in Paragraphs 1 through 10 present sufficient grounds for the revocation of FIRST FIDELITY'S mortgage broker license(s) pursuant to Massachusetts General Laws chapter 255E, section 6 and the Division's regulation at 209 CMR 42.04(2)(b) AND/OR, 42.07(2)(b).
ORDER TO CEASE AND DESIST
- After taking into consideration the FINDINGS OF FACT and CONCLUSIONS OF LAW stated herein, it is hereby:
- ORDERED that FIRST FIDELITY and any and all officers, members, managers, employees, independent contractors, or agents, operating on behalf of FIRST FIDELITY, and their successors or assigns, shall immediately cease engaging in the activities of: (a) mortgage broker, as those activities are defined under Massachusetts General Laws chapter 255E, section 1, and (b) a mortgage loan originator, as those activities are defined under Massachusetts General Laws chapter 255F, section 1, on behalf of FIRST FIDELITY relative to any residential property in Massachusetts, not otherwise expressly permitted by the terms of this Temporary Order. Therefore, FIRST FIDELITY is ordered immediately to cease soliciting or accepting, either directly or indirectly, any residential mortgage loan applications from consumers for residential property located in Massachusetts.
- IT IS FURTHER ORDERED that FIRST FIDELITY, shall immediately place any fees previously collected from Massachusetts consumers relative to any pending mortgage loan applications in a separate escrow account maintained at a federally insured bank.
- IT IS FURTHER ORDERED that FIRST FIDELITY shall immediately place with one or more qualified broker(s) or lender(s), as appropriate based on the status of the application and with no loss to applicants, all of its pending Massachusetts residential mortgage loan applications. FIRST FIDELITY shall place such applications with a licensed Massachusetts broker(s) or lender(s), as appropriate, or with a financial institution(s) that is exempt from the mortgage licensing requirements under Massachusetts General Laws chapter 255E, section 2.
- IT IS FURTHER ORDERED that as soon as possible, but in no event later than two days after the effective date of this Temporary Order, FIRST FIDELITY shall submit the following information in writing to the Commissioner:
- A detailed record of all pending residential mortgage loan applications, which shall include, but is not limited to, the following: customer name, address, telephone number; all prepaid loan fees submitted by the customer; amount of loan; application status (i.e. filed, submitted to lenders); scheduled closing date; rate lock status; the location of all original open application files; and a list of applicable wholesale lenders. The latter list should include telephone numbers of contact persons familiar with FIRST FIDELITY's submitted loans.
- IT IS FURTHER ORDERED that FIRST FIDELITY shall immediately secure all pending mortgage loan application files and, to the extent that any original documents must be forwarded to the relevant mortgage lender or mortgage broker pursuant to this Temporary Order, a copy of such document, correspondence, or paper relating to the mortgage loan shall be retained in FIRST FIDELITY's books and records and shall be available to the Commissioner, in their entirety, immediately upon request on the date and time specified by the Commissioner.
- IT IS FURTHER ORDERED that FIRST FIDELITY shall submit a completed Mortgage Lender/Mortgage Broker 2009 Annual Report, in the form provided on the Division's website, and thereupon submit a payment to the Division of the amount then outstanding due to the late filing of the Mortgage Lender/Mortgage Broker 2009 Annual Report.
- The amount of the late fee shall be determined in accordance with General Laws chapter 255E, section 8 by applying a rate of $50.00 per calendar day for each day after March 31, 2010 on which the Report remained outstanding. The Licensee may contact the Division to clarify or confirm the calculation of the late fee amount; and
- FIRST FIDELITY shall remit payment in accordance with this Paragraph of the Temporary Order for the amount then due, payable to the "Commonwealth of Massachusetts," to the Office of the Commissioner of Banks, Attn: Mortgage Licensing, 1000 Washington St., Floor 10, Boston, MA 02118.
- IT IS FURTHER ORDERED that this Temporary Order shall become effective immediately and shall remain in effect unless vacated, modified, or suspended by the Commissioner or upon court order after review under Massachusetts General Laws chapter 30A.
- It is understood that the Licensee may petition the Commissioner to vacate or modify this Temporary Order upon presenting to the Division satisfactory evidence that the Licensee has fully complied with the provisions of this Temporary Order.
- IT IS FURTHER ORDERED that a hearing will be scheduled on this matter to determine whether or not such Temporary Order shall become permanent and final only upon receipt of a written request for such a hearing from FIRST FIDELITY within twenty (20) days of the effective date of this Temporary Order. If no hearing is requested within this twenty (20) day period, this Temporary Order shall become permanent and final until it is modified or vacated by the Commissioner.
BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.
Dated at Boston, Massachusetts, this 15th day of June, 2010
By: Steven L. Antonakes
Commissioner of Banks
Commonwealth of Massachusetts