offered by
Consent Order

Consent Order American Advisors Group

Date: 10/21/2008
Organization: Division of Banks
Docket Number: 2008-022-CO
Location: Irvine, CA

Table of Contents


Suffolk, SS.

Docket No. 2008-022-CO


In the Matter of
Irvine, California

Mortgage Broker License No. MB5106

WHEREAS American Advisors Group ("American Advisors" or the "Corporation") with its main business office located at 16811 Hale Avenue, Irvine, California, 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 October 21, 2008, 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, American Advisors agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");

WHEREAS, pursuant to General Laws chapter 255E, section (7)(b), the Commissioner issued a FINDINGS OF FACT AND TEMPORARY ORDER TO CEASE AND DESIST, Docket No. 2008-022 (the "Temporary Order"), against American Advisors on September 24, 2008, based upon information reflected in a consumer solicitation (the "Solicitation") regarding reverse mortgage loans received by Massachusetts consumers from American Advisors which contained language that had the tendency to be false or misleading, that could collectively create the appearance that the Solicitation was issued by a government agency. Specifically, the Solicitation was marked as an "URGENT NOTICE" and noted that the mailing was forwarded from "ADMINISTRATIVE OFFICES." The Solicitation also referenced specific monthly and lump sum payments that the consumer would be receiving however, failed to note that payment streams would be limited by a final appraisal of the property and other ancillary costs associated with obtaining a reverse mortgage loan.

WHEREAS, the parties now seek to resolve by mutual agreement, the matters identified in the Temporary Order;

WHEREAS, without this Consent Order constituting an admission by American Advisors of any allegations made or implied by the provisions of the Temporary Order; solely for the purpose of settlement of all alleged violations without protracted administrative proceedings and judicial review, American Advisors hereby waives its right to complete the hearing process relative to this proceeding and affirms that it is willing to take all necessary action as set forth in this Consent Order; and

WHEREAS, in recognition of the Division and American Advisors having reached the following mutual agreement under this Consent Order to fully resolve the matters raised by the Temporary Order, the Commissioner has terminated the Temporary Order on this 21st day of October, 2008.


NOW COME the parties in the above-captioned matter, the Division and American Advisors, and stipulate and agree as follows:

  1. American Advisors shall revise its advertising practices and procedures to ensure that all solicitations and advertising materials used by the Corporation do not contain any representations or statements that could be considered false, misleading, or have the tendency or capacity to be misleading.
    1. American Advisors shall take all necessary steps to ensure that the Solicitation or any similar solicitation is not published or distributed to consumers in Massachusetts;
    2. American Advisors shall implement, establish and maintain a system of internal controls to monitor the Corporation's compliance with the laws and regulations applicable to advertising practices including, but not limited to Massachusetts General Laws chapter 140D, the Division's regulations 209 CMR 32.00 et seq. and 209 CMR 42.12A; and the Office of the Attorney General's regulation 940 CMR 8.04;
    3. American Advisors shall establish, implement and maintain policies and procedures to ensure that all advertisements are thoroughly reviewed by senior management prior to publication or distribution to consumers. Such procedures shall include a review of the criteria utilized to generate mailing lists to ensure that targeted solicitations are appropriate for the consumers to whom such solicitations are distributed;
    4. American Advisors shall review and revise, as necessary, the Corporation's policies and procedures to ensure that individuals performing on behalf of the Corporation neither act, nor represent themselves, as a government entity; and
    5. A copy of each advertisement used by the American Advisors shall be retained in the Corporation's books and records and shall be made available to the Division at its examinations/inspections of the American Advisors.
  2. American Advisors shall continue to process five HUD Home Equity Conversions Mortgage loans currently pending in the Corporation's pipeline with the national reverse mortgage lender identified in a report issued to the Commissioner pursuant to the terms of the Temporary Order. (Loan numbers: 80810088, 80910024, 80910027, 80910071, and 80910125). American Advisors shall continue to process the aforementioned loans under the following terms:
    1. American Advisors shall receive no compensation, directly or indirectly, for processing and/or originating the reverse mortgage loans. Specifically, "compensation" shall include, but not be limited to, fees paid by a borrower at closing, including loan origination fees and any fee to be received by American Advisors from the reverse mortgage lender including a yield spread premium and loan correspondent fee.
    2. American Advisors shall provide to the Division for review, a complete closing package upon settlement of each of the reverse mortgage loans. Each package shall be forwarded to the Division for review within ten (10) days of settlement.
  3. American Advisors shall issue a written clarification notice to the consumers referenced in Paragraph 2 of this Consent Order. Such notice shall make reference to the Solicitation and include, but not be limited to, the following information:
    1. Notification that American Advisors is not affiliated with a government agency;
    2. Clarification that American Advisors did not have detailed knowledge of the loan terms and or payment streams that a borrower would qualify for; and
    3. Notification that the Corporation will not be receiving any compensation, in the consumer's reverse mortgage transaction.
  4. Prior to distributing the written notice referenced in Paragraph 3 of this Consent Order, American Advisors shall submit the draft notice to the Division for review and approval. Such draft notice shall be submitted to the Division within seven (7) days of the effective date of this Consent Order.
  5. American Advisors agrees to submit a payment of ten thousand dollars ($10,000.00) in satisfaction of an administrative penalty collected in consideration of American Advisors' distribution of the solicitation referenced in the preamble of this Consent Order. The administrative penalty shall be satisfied as follows:
    1. Two thousand five hundred dollars ($2,500.00) shall be due and payable immediately upon the execution of this Consent Order;
    2. Two thousand five hundred dollars ($2,500.00) shall be due and payable on December 31, 2008;
    3. Five thousand dollars ($5,000.00) shall be due and payable on March 31, 2009; and
    4. American Advisors shall remit such payment(s) for the amount then due, payable to the "Commonwealth of Massachusetts," to the Office of the Commissioner of Banks, One South Station, 3rd Floor, Boston, Massachusetts 02110. The Division shall remit the payment(s) for deposit into the General Fund of the Commonwealth.
  6. Nothing in this Consent Order shall be construed as permitting American Advisors to violate any law, rule, regulation, or regulatory bulletin to which American Advisors is subject.
  7. In consideration of the foregoing Consent Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke American Advisors' mortgage broker license under General Laws chapter 255E, section 6, while this Consent Order is in effect.
  8. Failure to comply with the terms of this Consent Order shall constitute grounds for license suspension and/or revocation pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
  9. This Consent Order shall become effective immediately upon the date of its issuance.
  10. The provisions of this Consent Order shall be binding upon American Advisors and its officers and directors, and their successors or assigns.
  11. 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.
  12. 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 American Advisors.



Dated at Boston, Massachusetts, this 21st day of October, 2008

By: Steven L. Antonakes
Commissioner of Banks
Commonwealth of Massachusetts