By the Division of Banks
COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
Docket No. 2011-031
In the Matter of
PRIMERICA FINANCIAL SERVICES HOME MORTGAGES, INC.
Mortgage Broker License No. MB3073 et al.
THIS SETTLEMENT AGREEMENT is made this 12th day of April, 2012 between PRIMERICA FINANCIAL SERVICES HOME MORTGAGES, INC., Duluth, Georgia ("PFSHMI" or the "Corporation"), a licensed mortgage broker under Massachusetts General Laws chapter 255E, section 2, and the Commonwealth of Massachusetts Division of Banks ("Division").
WHEREAS, an examination/inspection of PFSHMI was commenced pursuant to General Laws chapter 255E, section 8, as of December 2, 2009 and continued through February 2011, to assess the Corporation’s level of compliance with applicable Massachusetts and federal statutes and 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 PFSHMI as of December 2, 2009, alleged non-compliance with applicable state statutes, rules, and regulations governing the conduct of those engaged in the business of a mortgage broker and small loan company in Massachusetts;
WHEREAS, PFSHMI does not admit 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 and believed that the Corporation was in compliance with Massachusetts law;
WHEREAS, by letter dated December 6, 2011 from PFSHMI’s outside legal counsel, PFSHMI informed the Division that the Corporation intended to cease taking new Massachusetts mortgage applications as of January 1, 2012;
WHEREAS, PFSHMI has indicated that it will retain its Massachusetts mortgage broker license only until all loan applications in the pipeline have been closed or declined by the lender; at which point PFSHMI will initiate the surrender of its Massachusetts mortgage broker license through the Nationwide Mortgage Licensing System (NMLS);
WHEREAS, PFSHMI is in the process of voluntarily surrendering all of its mortgage licenses in all states to effect the Corporation’s exit from the mortgage loan brokering business due to its cessation of business effective December 31, 2011 and;
WHEREAS, PFSHMI has been advised of its right to Notice and Hearing pursuant to Massachusetts General Laws chapter 255E, section 7, and has waived those rights; and
WHEREAS, PFSHMI desires to resolve the concerns of the Division through this Settlement Agreement and is entering into this Settlement Agreement with the Division on the terms stated herein.
NOW COME the parties in the above-captioned matter, the Division and PFSHMI, both of whom desire to resolve this matter and agree as follows:
- PFSHMI agrees to submit a payment of thirty five thousand dollars ($35,000) in satisfaction of an administrative penalty collected in consideration of PFSHMI’s alleged failure to properly retain documents and records as required by 209 CMR 42.09, its alleged failure to produce such documents for the Division’s examination/inspection as required by Massachusetts General Laws chapter 255E, section 8, and its allegedly engaging in small loan activity without the required license. PFSHMI shall remit payment in full of the amount indicated above, payable to the "Commonwealth of Massachusetts," with the executed copy of the Settlement Agreement, to the Office of the Commissioner of Banks, Attention: Mortgage Broker Examination Unit, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118-2218. The Division shall remit the payment for deposit into the General Fund of the Commonwealth.
- PFSHMI agrees to comply with the affirmative obligations set forth in the Compliance Review section of the Report pertaining to alleged small loan activity. Within sixty (60) days of the execution of the Settlement Agreement, PFSHMI shall submit appropriate information to the Division to evidence compliance.
- Within thirty (30) days of receipt of the relevant invoice from the Division, PFSHMI shall submit payment in full for the amount owed for the costs of the Division’s examination/inspection. The payment shall be made payable to the "Commonwealth of Massachusetts" and mailed to Division of Banks, Commonwealth of Massachusetts, P.O. Box 3952, Boston, Massachusetts 02241-3952.
- PFSHMI certifies that it has ceased accepting Massachusetts residential mortgage loan applications as of January 1, 2012 and PFSHMI has ceased accepting residential mortgage loan applications in all states where it held or holds licenses as of January 1, 2012 due to its cessation of business nationwide.
- PFSHMI shall initiate the surrender of its Massachusetts mortgage broker licenses no later than March 31, 2012.
- PFSHMI shall withdraw its September 1, 2011 appeal of the compliance rating that was assigned to PFSHMI and set forth in the Report. PFSHMI shall submit a written request to withdraw the aforementioned appeal with the executed copy of the Settlement Agreement.
- PFSHMI agrees that, in the event that the Corporation fails to submit the payments set forth in this Settlement Agreement in the amounts specified herein and in accordance with the applicable deadlines, the Division shall be authorized to submit a claim for such amounts against the mortgage broker Massachusetts surety bond maintained by PFSHMI pursuant to the Division’s regulations 209 CMR 42.06(2)(a).
- The Corporation hereby waives, solely for purposes for settling this proceeding:
- The receipt of Notice specifying the allegations (the "Charges") which form the basis for issuance of the Settlement Agreement;
- All defenses to the issuance of the Settlement Agreement;
- A hearing under General Laws chapter 255E, section 7(a), for the purpose of taking evidence on such alleged Charges;
- The filing of proposed findings of fact and conclusions of law;
- A written decision of the Commissioner;
- Exceptions and briefs with respect to such written decision; and
- Review of this Settlement Agreement pursuant to General Laws chapter 30A.
- Nothing in this Settlement Agreement shall be construed as permitting PFSHMI to violate any law, rule, regulation, or regulatory bulletin to which PFSHMI is subject.
- In consideration of the foregoing Settlement Agreement, the Division agrees not to pursue formal measures against PFSHMI’s mortgage broker license, relative to this matter, once the provisions of this Settlement Agreement are satisfied.
- Failure to comply with the terms of this Settlement Agreement shall constitute grounds for denial of any future license applications submitted by PFSHMI or its officers or directors under Massachusetts General Laws chapters 255E and/or 255F. Should PFSHMI fulfill all of its obligations under the Settlement Agreement, the Settlement Agreement shall not be used as grounds for denial of any future license applications submitted by PFSHMI or its officers or directors under Massachusetts General Laws chapters 255E and 255F.
- Failure to comply with the terms of this Settlement Agreement shall constitute grounds for the nonrenewal or revocation of any mortgage loan originator licenses currently held by officers or directors of PFSHMI.
- This Settlement Agreement shall become effective and public immediately upon the date of its issuance.
- The provisions of this Settlement Agreement shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this Settlement Agreement shall have been modified, terminated, suspended, or set aside by the Commissioner or upon an order of a court of competent jurisdiction.
- This Settlement Agreement is the complete document representing the resolution of this matter. There are no other agreements, promises, representations, or warranties other than those set forth in this Settlement Agreement.
- Upon satisfaction by PFSHMI of the following conditions:(1) payment of the $35,000.00 administrative penalty; (2) payment for examination/investigation costs; (3) completion of its obligations concerning the small loans matter; and (4) withdrawal of its September 1, 2011 appeal of the compliance rating that was assigned to PFSHMI, the Division agrees that PFSHMI’s obligations under this Settlement Agreement shall have been fulfilled and that PFSHMI shall have no continuing obligations under this Settlement Agreement.
Agreed to this 12th day of April, 2012.
Primerica Financial Services Home Mortgages, Inc.
By its duly authorized officer:
Gregory C. Pitts
Approved this 13th day of April, 2012.
Commonwealth of Massachusetts Division of Banks
David J. Cotney
Commissioner of Banks