By the Division of Banks
COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
MORTGAGE LENDER AND
Docket No. 2012-004
In the Matter of
ENVOY MORTGAGE, LTD.
Mortgage Company License No(s). MC6666 et al.
WHEREAS, ENVOY MORTGAGE, LTD., Houston, Texas ("Envoy Mortgage" or the "Corporation"), a licensed mortgage lender and mortgage broker under Massachusetts General Laws chapter 255E, section 2, has entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER ("Consent Agreement") with representatives of the Division of Banks ("Division") dated April 26, 2012, 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 and mortgage broker, Envoy Mortgage agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");
WHEREAS, an examination/inspection of Envoy Mortgage was conducted pursuant to General Laws chapter 255E, section 8, as of March 21, 2011 to assess the Corporation’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 lender and mortgage broker in the Commonwealth;
WHEREAS, the Report of Examination/Inspection (the "Report") issued pursuant to the Division’s examination/inspection of Envoy Mortgage alleged non-compliance with certain applicable state and federal statutes, rules, and regulations governing the conduct of those engaged in the business of a mortgage lender and mortgage broker in Massachusetts; and
WHEREAS, the parties now seek to resolve by mutual agreement, the matters identified in the Report.
NOW COME the parties in the above-captioned matter, the Division and Envoy Mortgage, and pursuant to the Consent Agreement, stipulate and agree as follows:
- Envoy Mortgage shall establish, implement and maintain procedures to ensure that all mortgage loan originators with whom the Corporation conducts business are duly licensed as mortgage loan originators under Massachusetts General Laws chapter 255F, and properly sponsored through the Nationwide Mortgage Licensing System by Envoy Mortgage.
- Envoy Mortgage agrees to pay sixty thousand dollars ($60,000.00) in satisfaction of an agreed upon administrative penalty collected in consideration of the Corporation’s conducting business with mortgage loan originators who either did not hold an active Massachusetts mortgage loan originator license or who were not sponsored by the Corporation. Envoy 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 Office of the Commissioner of Banks, Attn: Mortgage Lender Examination Unit, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118.
- Envoy Mortgage shall establish, implement, and maintain procedures to ensure compliance with the loan reporting requirements set forth in the Home Mortgage Disclosure Act ("HMDA"), 12 U.S.C. section 2801 et seq., as implemented by Regulations of the Board of Governors of the Federal Reserve System, 12 C.F.R. Part 203 ("Regulation C"). Such procedures shall necessarily require that the Corporation implement internal controls to ensure that, for all HMDA reportable loan applications, Envoy Mortgage accurately compiles and records all required data in the Corporation’s HMDA Loan Application Register ("LAR").
- Envoy Mortgage shall establish, implement, maintain, and periodically update internal controls operating policies and training procedures to ensure that all applicable personnel possess a comprehensive understanding of the HMDA reporting requirements under Regulation C. Such training shall necessarily ensure the proper implementation and execution of the revised practices and procedures adopted by Envoy Mortgage pursuant to this Section of the Consent Order.
- Envoy Mortgage shall establish, implement and maintain procedures to ensure that the Corporation notifies the Division, in writing, within one business day, of the occurrence of any significant events, including but not limited to the institution of formal or informal regulatory action, in any state against the Corporation, in accordance with 209 CMR 42.12(1)(c). Compliance with this Section of the Consent Order shall also require that Envoy Mortgage timely update its disclosures in the NMLS, as necessary, to reflect the occurrence of any such significant event.
- Envoy Mortgage shall establish, implement, and maintain policies and procedures to ensure that the Corporation is in compliance with the Division’s regulation 209 CMR 53.00 et seq. regarding determination and documentation of a borrower’s interest when refinancing a home loan that was consummated within 60 months prior to the Corporation’s receipt of an application for a new home loan. Such procedures shall require that Envoy Mortgage complete a worksheet or other document indicating how the Corporation determined that such refinance loan was in the borrower’s interest. Such document shall include all the information required under 209 CMR 53.07 and shall be retained in the Corporation’s books and records as evidence of compliance.
- Envoy Mortgage shall establish, implement and maintain procedures to ensure that all applicants whose residential mortgage loan application is denied receive a Mortgage Review Board Disclosure Form notifying them that they may appeal such denial to the review board in accordance with Massachusetts General Laws chapter 167, section 14A. For each consumer loan file, a completed copy of the Mortgage Review Board Disclosure Form shall be retained in the Corporation’s books and records as evidence of compliance.
- Envoy Mortgage shall establish, implement, and maintain procedures to ensure that the Good Faith Estimate is delivered to each loan applicant no later than three business days after the application is received or prepared.
- Envoy Mortgage shall establish, implement, and maintain procedures to ensure that the Corporation files all quarterly reports on a timely basis pursuant to the Division’s regulation 209 CMR 42.09(4). It is understood that beginning with the first calendar quarter of 2011, the Nationwide Mortgage Licensing System Mortgage Call Report ("Call Report") replaced the Massachusetts quarterly report. The quarterly reporting requirement will be satisfied by completing and submitting the Call Report within prescribed timeframes.
- On December 12, 2011, Envoy Mortgage voluntarily withdrew its pending application before the Division for approval of the Corporation’s reverse mortgage program. Having voluntarily withdrawn the Corporation’s application for approval, Envoy Mortgage agrees to refrain from submitting an application to the Division to obtain approval to make reverse mortgage loans in the Commonwealth for a period of twelve (12) months from the effective date of this Consent Order.
- Envoy Mortgage shall comply with all laws and regulations applicable to its conducting the business of a mortgage lender, including, but not limited to, Massachusetts General Laws chapters 255E and 255F, and the Division’s regulations 209 CMR 41.00 et seq. and 209 CMR 42.00 et seq. Such obligations shall necessarily include the duty to address and correct all violations and areas of concern addressed in the Report.
- Within thirty (30) days of the effective date of this Consent Order, Envoy Mortgage shall establish, implement, and maintain quality control standards which provide for a loan review process to assess the Corporation’s compliance with: (i) the statutes, rules, regulations, regulatory bulletins, and other relevant provisions of law applicable to those engaged in the business of a mortgage lender and mortgage broker in Massachusetts, and (ii) the provisions of this Consent Order.
- Envoy Mortgage shall establish, implement, and maintain procedures and policies to ensure that all applicable staff persons 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.
- On the thirtieth day after the end of each calendar quarter following the date of this Consent Order, beginning with the calendar quarter ending March 31, 2012, Envoy Mortgage shall furnish written progress reports to the Division, which shall address and include the following:
- 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
- Written findings prepared by Envoy Mortgage detailing a review of management’s and staff persons’ 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 Envoy Mortgage’s compliance condition in Massachusetts, and the results thereof.
- The reporting requirement to the Division referenced in Section 10 of this Consent Order shall remain in effect as long as Envoy Mortgage is licensed by the Division as a licensed mortgage lender and/or licensed mortgage broker 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.
- Nothing in this Consent Order shall be construed as permitting Envoy Mortgage to violate any law, rule, regulation, or regulatory bulletin to which Envoy Mortgage is subject.
- In consideration of the foregoing Consent Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke Envoy Mortgage’s mortgage lender license(s) under Massachusetts General Laws chapter 255E, section 6, while this Consent Order is in effect.
- Failure to comply with the terms of this Consent Order shall constitute grounds for license suspension and/or revocation, or other formal regulatory actions pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
- This Consent Order shall become effective immediately upon the date of its issuance.
- 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.
- 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 Envoy Mortgage.
BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS:
Dated at Boston, Massachusetts, this 26th day of April, 2012
David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts