Related to:
Consent Order

Consent Order Home Finance of America, Inc.

Date: 01/23/2012
Organization: Division of Banks
Docket Number: 2011-094
Location: Plymouth Meeting, PA

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER
LICENSING
Docket No. 2011-094

CONSENT ORDER

In the Matter of
HOME FINANCE OF AMERICA, INC.
Plymouth Meeting, Pennsylvania

Mortgage Lender License No. ML1077

WHEREAS, HOME FINANCE OF AMERICA, INC., Plymouth Meeting, Pennsylvania ("Home Finance of America" or the "Corporation"), a licensed mortgage lender under Massachusetts General Laws chapter 255E, section 2, 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 January 23, 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, Home Finance of America agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");

WHEREAS, an examination/inspection of Home Finance of America was conducted pursuant to General Laws chapter 255E, section 8, as of July 18, 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 in the Commonwealth; and

WHEREAS, the Report of Examination/Inspection (the "Report") issued pursuant to the Division’s examination/inspection of Home Finance of America as of July 18, 2011 alleged substantial 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.

ORDER

NOW COME the parties in the above-captioned matter, the Division and Home Finance of America, and stipulate and agree as follows:

  1. Home Finance of America 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 require that the Corporation implement internal controls to ensure that, for all HMDA reportable loan applications, Home Finance of America accurately compiles and records all required data in the Corporation’s HMDA Loan Application Register ("LAR") and submits all required reports to Federal Reserve Board in accordance with Regulation C.
    1. Within thirty (30) days of the effective date of this Consent Order, Home Finance of America shall petition the Federal Reserve Board to permit the filing of Home Finance of America’s complete LAR containing the HMDA data collected for all Massachusetts residential mortgage loan applications originated during calendar year 2010.
    2. Home Finance of America shall establish, implement, and maintain 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 Home Finance of America pursuant to this Section of the Consent Order.
    3. Within thirty (30) days of the effective date of this Consent Order, Home Finance of America shall prepare and submit to the Division a written report detailing the HMDA data that the Corporation filed pursuant to Section 1(a) of this Consent Order.
    4. Home Finance of America agrees to 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 failure to comply with the statutes, rules and regulations governing the conduct of those engaged in the business of a mortgage lender in Massachusetts. Home Finance of America 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.
  2. Home Finance of America shall establish, implement and maintain procedures to ensure that all mortgage loan originators with whom the Corporation conducts business are properly licensed as mortgage loan originators under Massachusetts General Laws chapter 255F, and sponsored through the Nationwide Mortgage Licensing System by Home Finance of America or by the licensed mortgage broker, as appropriate.
    1. Home Finance of America agrees to submit a payment in the amount of four thousand dollars ($4,000.00) in satisfaction of an administrative penalty collected in consideration of the Corporation’s conducting business with mortgage loan originators who did not hold an active Massachusetts mortgage loan originator license. Home Finance of America 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.
  3. Home Finance of America shall establish, implement and maintain procedures to ensure that all applicants whose residential mortgage loan application is denied by Home Finance of America 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.
  4. Home Finance of America shall establish and implement procedures to maintain all loan files in the Corporation’s books and records in a manner sufficient to evidence compliance with applicable state and federal statutes and regulations, in accordance with the record keeping requirements specified by the Division’s regulations 209 CMR 42.09 and 209 CMR 48.03. Such procedures shall necessarily require that the Corporation properly documents the initial date of application and ensures that all disclosures are properly dated and maintained in a manner that will allow the Commissioner to determine whether time-sensitive documents are being provided to consumers within the mandated timing requirements.
  5. Home Finance of America shall update and revise the Corporation’s financial reporting policies and practices, as necessary, to ensure that all financial statements, including interim statements, are prepared in accordance with generally accepted accounting principles (GAAP).
  6. Home Finance of America 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, within twenty (20) days of receipt of the Report, all violations and areas of concern addressed in the Report.
    1. Within twenty (20) days of Home Finance of America’s receipt of the Report, the Corporation shall 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 Home Finance of America 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;
    2. Within thirty (30) days from the effective date of this Consent Order, Home Finance of America shall establish, implement, and maintain quality control standards which provide for a loan review process to assess the Corporation’s compliance with: (a) 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 (b) the provisions of this Consent Order. Such quality control standards shall be designed to prevent the recurrence of the violations addressed in the Report; and
    3. Home Finance of America 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.
  7. On the thirtieth (30th) day after the end of each calendar quarter following the date of this Consent Order, Home Finance of America shall furnish written progress reports to the Division, which shall address and include the following:
    1. 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
    2. Written findings prepared by Home Finance of America 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 Home Finance of America’s compliance condition in Massachusetts and the results thereof.
  8. The reporting requirement to the Division referenced in Section 7 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.
  9. Home Finance of America agrees that, in the event that the Corporation fails to submit the payments set forth in this Consent Order 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 lender Massachusetts surety bond maintained by Home Finance of America pursuant to the Division’s regulation 209 CMR 42.03(2)(a).
  10. Nothing in this Consent Order shall be construed as permitting Home Finance of America to violate any law, rule, regulation, or regulatory bulletin to which Home Finance of America is subject.
  11. In consideration of the foregoing Consent Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke Home Finance of America’s mortgage lender licenses under General Laws chapter 255E, section 6, while this Consent Order is in effect.
  12. Failure to comply with the terms of this Consent Order shall constitute grounds for license suspension and/or revocation, or other formal regulatory action pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
  13. This Consent Order shall become effective immediately upon the date of its issuance.
  14. 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.
  15. 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 between the Division and Home Finance of America.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 23rd day of January, 2012

By:
David J. Cotney
Commissioner of Banks

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