Consent Order  First Ohio Banc & Lending, Inc.

Date:	06/13/2011
Organization:	Division of Banks
Docket Number:	2010-001-CO
Location:	Independence, Ohio

First Ohio Banc & Lending, Inc., Independence, Ohio - Consent Order

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER AND
MORTGAGE BROKER
LICENSING
Docket No. 2010-001-CO

CONSENT ORDER

In the Matter of
FIRST OHIO BANC & LENDING, INC.
Independence, Ohio

Mortgage Company License No.: MC3973

WHEREAS, FIRST OHIO BANC & LENDING, INC., Independence, Ohio ("First Ohio" or the "Corporation"), a licensed mortgage lender and mortgage broker under Massachusetts General Laws chapter 255E, section 2, has been advised of its right to Notice and Hearing pursuant to Massachusetts General Laws chapter 30A, section 10, 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 June 13, 2011, whereby, solely for the purpose of settling this matter, First Ohio agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");


WHEREAS, 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; WHEREAS, First Ohio, at all relevant times, has been a foreign Corporation doing business in the Commonwealth with its main office located at 6100 Rockside Woods Boulevard, Independence, Ohio;


WHEREAS, on September 21, 2009, pursuant to the authority granted under Massachusetts General Laws chapter 255E, section 8, the Division commenced an examination/inspection (the "2009 examination/inspection") of the books, accounts, papers, records, and files maintained by First Ohio;


WHEREAS, the Division's Report of Examination/Inspection on Consumer Compliance (the "Report"), which was issued to First Ohio on or about April 29, 2010, presented the findings of the 2009 examination/inspection and alleged significant failures to comply with applicable state and federal laws, rules, regulations, and regulatory bulletins governing the conduct of those engaged in the business of a mortgage lender and mortgage broker in Massachusetts;


WHEREAS, on or about April 29, 2010, based upon the findings of the 2009 examination/inspection, the Division issued a FINDINGS OF FACT AND TEMPORARY ORDER TO CEASE AND DESIST (the "Temporary Order"), Docket No. 2010-001, against First Ohio;


WHEREAS, on or about May 17, 2010 First Ohio filed a response to the Temporary Order with the Division whereby the Corporation answered the Division's findings and alleged violations of law contained in the Temporary Order. By its response, First Ohio further reserved its right to proceed to an administrative hearing in accordance with Massachusetts General Laws chapter 30A;


WHEREAS, according to representations made by First Ohio, the Corporation and any and all officers, directors, managers, employees, independent contractors, or agents, operating on behalf of First Ohio, ceased engaging in the activity of a mortgage lender, mortgage broker, and mortgage loan originator in Massachusetts, as those terms are defined under General Laws chapter 255E, section 1 and General Laws chapter 255F, section 1, respectively upon the issuance of the Temporary Order.


WHEREAS, on or about June 18, 2010 First Ohio filed a response to the Report issued by the Division;


WHEREAS, on or about June 23, 2010, First Ohio appeared at the Division's offices for an informal conference to discuss the matters raised by the Temporary Order;


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


WHEREAS, without this Consent Order constituting an admission by First Ohio 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, First Ohio 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 First Ohio having reached the following mutual agreement under this Consent Order to resolve the matters raised by the Temporary Order, the Commissioner has terminated the Temporary Order on this day of , 2011.

ORDER

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

 

1. Immediately upon the execution of this Consent Order, First Ohio will voluntarily surrender its Massachusetts mortgage lender and mortgage broker license MC3973 by: (a) returning the original license certificate to the Division at 1000 Washington Street, Attention: Mortgage Licensing Unit, 10th Floor, Boston, Massachusetts 02118; and (b) submitting a "Request to Surrender" filing to the Division through the Nationwide Mortgage Licensing System (NMLS).
    
2. First Ohio and all of its officers and directors, and their successors or assigns will refrain from submitting an application to obtain a mortgage broker, and/or mortgage lender, and/or mortgage loan originator license from the Commissioner for a period of twenty-four (24) months from the effective date the Temporary Order.
    
3. To the extent that First Ohio or any of its officers or directors, or their successors or assigns, wish to resume business as a mortgage lender, and/or mortgage broker, and/or mortgage loan originator under General Laws chapter 255E or chapter 255F at the expiration of the 24-month term as set forth above, First Ohio and/or the relevant individual(s) shall be required to submit a completed application to obtain the relevant license(s) from the Commissioner. Unless the Commissioner, in his sole discretion, agrees to accept such an application earlier, First Ohio agrees not to submit such an application until the expiration of the 24-month term. The Commissioner shall have all of the discretion set forth within General Laws chapter 255E, section 4 and the Division's regulation 209 CMR 42.00 et seq. in determining whether to issue a license to First Ohio to conduct the licensed business, provided however, that any such application shall not be denied solely on the basis of the Temporary Order.
    
4. First Ohio shall reimburse the consumers identified in the Report for the amounts collected as a broker fee, loan fee, points or similar fee at settlement that had not been disclosed to the consumers, in writing, prior to loan closing. The amount of such reimbursement shall equal the difference between the actual charges assessed to the consumers and the amount disclosed in writing for such fees prior to loan closing:
   
    
   1. Within thirty (30) days of the effective date of this Consent Order, First Ohio shall cause to be made a review of all Massachusetts residential mortgage loans originated by First Ohio since June 2, 2006 and shall identify all mortgage loan transactions in which the amount actually paid by the consumer as a loan fee, mortgage broker fee, application fee, or similar fee, as recorded on the settlement agreement, exceeded the amount disclosed to the consumer, in writing, for such fees prior to closing;
       
   2. In each mortgage loan transaction identified pursuant to Section 4(a), First Ohio shall reimburse the consumer the difference between the actual charge assessed to the individual consumer as a loan fee, mortgage broker fee, processing fee, or similar fee and the amount disclosed in writing for such fees prior to closing;
       
   3. Within sixty (60) days of the effective date of this Consent Order, First Ohio shall submit to the Commissioner a list of all borrowers identified pursuant to the above described review of residential mortgage loan transactions to whom a reimbursement is owed by the Corporation in accordance with this Section of the Consent Order; and
       
   4. Within sixty (60) days of the effective date of this Consent Order, First Ohio shall submit evidence of all reimbursements issued to consumers pursuant to this Section of the Consent Order, including the consumers' names, the dates the loans closed, check numbers, the amount of the reimbursements and certified mail receipts to illustrate the consumers' receipt of the reimbursement.
       
5. In consideration of the activities identified by the Division and detailed in the Temporary Order, First Ohio agrees to the following:
   
    
   1. First Ohio shall submit a payment in the amount of ninety thousand dollars ($90,000.00) in satisfaction of an administrative penalty collected in consideration of the following: the Corporation's alleged conducting business with mortgage loan originators who either did not hold an active mortgage loan originator license and/or were not sponsored by the Corporation; and for the Corporation's alleged failure to maintain its books, records, and files in a manner that would enable the Division to verify compliance with the mortgage loan originator licensing requirements set forth in General Laws chapter 255F and the Division's regulation 209 CMR 41.00, et seq. The administrative penalty shall be satisfied as follows:
      
       
      1. Thirty thousand dollars ($30,000.00) shall be due and payable with the executed copy of the Consent Agreement;
          
      2. Twenty thousand dollars ($20,000.00) shall be due and payable on or before June 30, 2011;
          
      3. Twenty thousand dollars ($20,000.00) shall be due and payable on or before September 30, 2011; and
          
      4. Twenty thousand dollars ($20,000.00) shall be due and payment on or before December 31, 2011.
          
   2. First Ohio shall submit a payment in the amount of twenty-five thousand dollars ($25,000.00) in satisfaction of an administrative penalty collected in consideration of the Corporation's alleged engaging in mortgage lender and mortgage broker activity at unlicensed locations. The Division shall remit the payment for deposit into the General Fund of the Commonwealth. The administrative penalty shall be satisfied as follows:
      
       
      1. Twelve thousand, five hundred dollars ($12,500.00) shall be due and payable on or before September 30, 2011; and
          
      2. Twelve thousand, five hundred dollars ($12,500.00) shall be due and payable on or before December 31, 2011.
          
   3. First Ohio shall remit payment(s) pursuant to Sections 5(a) and 5(b) of the Consent Order for the amount then due, payable to the "Commonwealth of Massachusetts," to the Office of the Commissioner of Banks, 1000 Washington Street, Attention: Mortgage Lender Examination Unit, 10th Floor, Boston, Massachusetts 02118.
       
6. First Ohio shall submit an updated record of the residential mortgage loan applications which remained pending at the time the Temporary Order was issued, from both the Corporation's lending and its brokering operations, 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); closing date; rate lock status; the location of all original application files; and a list of applicable wholesale lenders. The information provided shall be updated from a previously submitted report filed by First Ohio on May 17, 2010 in response to the Temporary Order and shall be submitted in writing to the Commissioner with the executed copy of the Consent Agreement.
    
7. In the event that First Ohio fails to submit any payment(s) set forth in this Consent Order, in the amounts specified herein and in accordance with the applicable deadlines, First Ohio agrees that the Corporation will not object to the Division submitting a claim, nor attempt to defend or defeat such claim, for any unpaid amount(s) against the Massachusetts mortgage lender and/or mortgage broker surety bond(s) maintained by First Ohio pursuant to 209 CMR 42.03(2)(a) and 209 CMR 42.06(2)(a).
    
8. The provisions of this Consent Order have no impact or effect on any pending matters or claims the Division may have against current or former employees or agents of First Ohio who have been alleged to have engaged in unlicensed mortgage loan originator activity in violation of General Laws chapter 255F and which underlie, in whole or in part, the allegations listed in Section 5(a) of this Consent Order.
    
9. The provisions of this Consent Order shall not limit, estop, or otherwise prevent any other state agency or department, from taking any other action affecting First Ohio and/or any of its officers, directors, managers, employees or agents.
    
10. This Consent Order shall become effective immediately upon the date of its issuance.
     
11. The provisions of this Consent Order shall be binding upon First Ohio and its directors, officers, and their successors and assigns.
     
12. In accordance with the terms of the Consent Agreement entered by First Ohio and the Commissioner, First Ohio has waived all rights of appeal that it may have relative to the Temporary Order.
     
13. 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.
     
14. This Consent Order and the Consent Agreement are the complete documents representing the resolution of this matter. There are no other agreements, promises, representations, or warranties other than those set forth in this Consent Order, which replaces and supersedes all prior agreements between First Ohio and the Commissioner.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 13th day of June, 2011

David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts