By the Division of Banks
COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
Docket No. 2012-001
In the Matter of
MAVERICK FUNDING CORP.
Parsippany, New Jersey
Mortgage Lender License No(s). ML7706 et al.
WHEREAS, MAVERICK FUNDING CORP., Parsippany, New Jersey ("Maverick Funding" or the "Corporation"), a licensed mortgage lender 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 August 13, 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, Maverick Funding agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");
WHEREAS, an examination/inspection of Maverick Funding was conducted pursuant to General Laws chapter 255E, section 8, as of May 20, 2010 to assess the Corporation’s level of compliance with applicable Massachusetts and federal statutes, rules and regulations governing the conduct of those engaged in the business of a mortgage lender in the Commonwealth;
WHEREAS, the Report of Examination/Inspection (the "Report") issued pursuant to the Division’s examination/inspection of Maverick Funding 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 lender 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 Maverick Funding, and stipulate and agree as follows:
- Maverick Funding had a program pursuant to which it paid volume-based incentive compensation to brokers which it believed was permitted pursuant to RESPA. The program was discontinued in April 2010 and has not been reestablished since. In recognition that the Division’s position is that the program did violate RESPA and Regulation 12 CFR 1024, Maverick Funding agrees to a payment of $38,665 as an administrative penalty.
- Maverick Funding 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.
- Maverick Funding must establish, implement, and maintain policies and procedures to ensure that the Corporation and all applicable control persons of the Corporation, as that term is defined, accurately reports and promptly updates all information required to be disclosed through the Nationwide Mortgage Licensing System (NMLS).
- Maverick Funding must continue to maintain procedures to ensure that every residential mortgage presented for record shall contain the name, address, and license number of the mortgage loan originator responsible for originating the mortgage loan, as required pursuant to M.G.L. c. 183, Section 6D.
- Maverick Funding must 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 require that the Corporation implement internal controls to ensure that, for all HMDA reportable loan applications, Maverick Funding accurately compiles and records all required data in the Corporation’s HMDA Loan Application Register ("LAR").
- Maverick Funding must 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 Maverick Funding pursuant to this Section of the Consent Order.
- Maverick Funding must continue to maintain procedures to ensure that all consumers receive a Notice of Privacy Policies and Practices in accordance with, and in the form required by, the Federal Trade Commission’s Regulation 16 CFR 313. For each consumer loan file, a copy of the Notice of Privacy Policies and Practices shall be retained in the Corporation’s books and records as evidence of compliance.
- Maverick Funding must continue to maintain procedures to ensure that the Corporation provides the disclosure required under M.G.L. chapter 184, section 17B at the time a consumer applies for a loan. Said disclosure must strictly conform to the content and format as set forth in the statute.
- Maverick Funding must establish, implement and maintain procedures to ensure that the Corporation prepares HUD-1 settlement statements in accordance with the instructions set forth in the Real Estate Settlement Procedures Act (RESPA) regulation at 24 CFR 3500.8(b), Appendix A.
- Maverick Funding must establish, implement, and maintain procedures to ensure that the Corporation accurately discloses on the Good Faith Estimate any fee or payment received by the Corporation from either the lender or the borrower arising from the initial funding transaction, in accordance with the provisions of Real Estate Settlement Procedures Act (RESPA) implementing regulation 24 CFR 3500.
- Maverick Funding must establish, implement and maintain procedures to ensure that the Credit Score Disclosure provided to consumers complies with the requirements of the Fair Credit Reporting Act, Section 609(g)(1). For each consumer loan file, a completed copy of the Credit Score Disclosure shall be retained in the Corporation’s books and records as evidence of compliance.
- Maverick Funding must 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 Mortgage Call Report ("Call Report"), collected through the Nationwide Mortgage Licensing System, replaced the Massachusetts quarterly report. The quarterly reporting requirement will be satisfied by completing and submitting the Call Report within prescribed timeframes.
- Maverick Funding must 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, within 20 days of receipt of the Report, all violations and areas of concern addressed in the Report.
- Within 20 days of Maverick Funding’s receipt of the Report, the Corporation must submit to the Commissioner a written response that addresses each of the violations and areas of concern specified in the Report. The written response shall describe the revised policies and procedures adopted by Maverick Funding 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 Consent Order.
- Within thirty days of the effective date of this Consent Order, Maverick Funding must 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 in Massachusetts, and (ii) the provisions of this Consent Order; and
- Maverick Funding must 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, Maverick Funding must furnish written progress reports to the Division, which must 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 Maverick Funding 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 Maverick Funding’s compliance condition in Massachusetts, and the results thereof.
- The reporting requirement to the Division referenced in Section 12 of this Consent 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 Consent Order from the Commissioner.
- Nothing in this Consent Order shall be construed as permitting Maverick Funding to violate any law, rule, regulation, or regulatory bulletin to which Maverick Funding 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 Maverick Funding’s mortgage 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 Maverick Funding.
BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS:
Dated at Boston, Massachusetts, this 13th day of August, 2012
David J. Cotney
Commissioner of Banks