Related to:
Consent Order

Consent Order Home Loan Center, Inc., dba Lending Tree Loans

Date: 01/30/2012
Organization: Division of Banks
Docket Number: 2011-025
Location: Irvine, CA

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER AND
MORTGAGE BROKER
LICENSING
Docket No. 2011-025

CONSENT ORDER

In the Matter of
HOME LOAN CENTER, INC.,
D/B/A LENDING TREE LOANS
Irvine, California

Mortgage Company License No. MC2206

WHEREAS, HOME LOAN CENTER, INC., D/B/A LENDING TREE LOANS, Irvine, California ("Home Loan Center" 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 January 30, 2012, whereby, solely for the purpose of settling this matter, Home Loan Center agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");

WHEREAS, an examination/inspection of Home Loan Center was conducted pursuant to General Laws chapter 255E, section 8, as of March 2, 2009, to assess the Corporation's level of compliance with applicable Massachusetts and federal statutes and the Division's and federal regulations governing the conduct of those engaged in the business of mortgage lender and mortgage broker in the Commonwealth; and

WHEREAS, the Report of Examination/Inspection (the "Report") issued pursuant to the Division's examination/inspection of Home Loan Center as of March 2, 2009 alleged non-compliance with applicable state and federal statutes, rules, and regulations governing the conduct of those engaged in the business of a mortgage lender and mortgage broker in Massachusetts.

ORDER

NOW COME the parties in the above-captioned matter, the Division and Home Loan Center, and pursuant to the Consent Agreement stipulate and agree as follows:

  1. Home Loan Center shall continue to maintain policies and procedures to ensure that consumers are provided with timely disclosures of all fees and costs of the real estate settlement process in accordance with the provisions of Real Estate Settlement Procedures Act (RESPA) implementing regulation 24 CFR 3500. The Corporation shall conduct quarterly compliance testing of the procedures to ensure ongoing compliance with RESPA's implementing regulation at 24 CFR 3500.
  2. Home Loan Center shall continue to maintain policies and procedures to ensure that any loan fees, application fees, processing fees, discount fees, points, or similar fees collected in a mortgage transaction in Massachusetts are not charged to consumers except to the extent that such fees or points have been properly disclosed to the consumer, in writing, prior to the closing of the mortgage loan. The Corporation shall conduct quarterly compliance testing of the procedures to ensure ongoing compliance with these requirements.
    1. Home Loan Center shall reimburse the consumers identified in the Report for the amounts collected as loan fees, application fees, processing fees, discount fees, points, or similar fees at settlement that had not been disclosed to the consumer, in writing, prior to loan closing. The amount of such reimbursement shall equal the difference between the actual charges assessed to the consumer and the amount disclosed in writing for such fee(s) prior to loan closing;
    2. The Corporation shall conduct a review of all Massachusetts residential mortgage loan applications processed by the Corporation since January 1, 2008 and shall reimburse all consumers for whom any loan fee, application fee, processing fee, discount fee, point, or similar fee collected as compensation for administrative costs of origination was charged by the Corporation where the amount charged for such fee or point was not previously disclosed in full to the consumer, as a loan fee, points, or similar fee, in writing, prior to the closing of the loan. The amount of such reimbursements shall equal the difference between the actual charges assessed to the individual consumer and the amount disclosed in writing prior to loan closing; and
    3. Within thirty (30) days from the effective date of this Consent Order, the Corporation shall submit evidence of the reimbursements issued pursuant to this Section 2 of this Consent Order. Home Loan Center shall mail the reimbursement checks via United States First Class Mail. If the checks are undeliverable, the Corporation shall make a good faith effort to deliver the checks to the consumers. For the purposes of this Section 2, the mailing of a check by certified mail to each consumer using the address listed in the Corporation’s records shall represent a sufficient good faith effort.
    4. Evidence of the reimbursements shall include the consumers' names, the dates the loans closed, the check numbers, the amount of the reimbursements, and copies of the reimbursement checks. Within sixty (60) days of reimbursement, the Corporation will provide the Commissioner with copies of the front and back of the cancelled checks or an electronic image of same. The Corporation shall provide the Commissioner with quarterly updates of the status of the reimbursements as part of its quarterly reporting required by Section 13 of this Consent Order.
  3. Home Loan Center shall implement and maintain policies and procedures to ensure the Corporation only conducts business with individuals who engage in the activities of a Mortgage Loan Originator, as that term is defined under Massachusetts General Laws chapter 255F, section 1, regarding residential property located in Massachusetts who are duly licensed as a mortgage loan originators under M.G.L. chapter 255F and properly sponsored by Home Loan Center through the Nationwide Mortgage Licensing System (NMLS).
  4. Home Loan Center agrees to submit a payment in the amount of thirty-eight thousand dollars ($38,000.00) in satisfaction of an administrative penalty collected in consideration of the Corporation's conducting business with mortgage loan originators who either did not hold an active mortgage loan originator license or were not sponsored by the Corporation. Home Loan Center 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, 1000 Washington Street, 10th Floor, Attention: Mortgage Lender Examinations, Boston, Massachusetts 02118.
  5. Home Loan Center shall establish, implement, and maintain policies and procedures to ensure that the Corporation is in compliance with the Division's regulation 209 CMR 53.00 et seq. regarding determination and documentation of a borrower's interest when refinancing a home loan that was consummated within 60 months prior to the Corporation's receipt of an application for a new home loan. Such procedures shall ensure that in any transaction in which Home Loan Center is performing in a mortgage lender capacity, the burden is upon Home Loan Center, exclusively, to determine that the refinancing is in the borrower's interest.
    1. Compliance with this Section 5 of the Consent Order shall necessarily require that Home Loan Center establish, implement and maintain procedures to ensure that the Corporation completes a worksheet or other document indicating how the Corporation determined that a refinance loan was in the borrower's interest. Such document shall include all the information required under 209 CMR 53.07 and the language contained therein shall not in any manner shift the burden to the borrower to determine and to demonstrate that the home loan is in the borrower's interest.
  6. Home Loan Center shall establish, implement, and maintain procedures to ensure that, when acting in the capacity of a mortgage lender, the Corporation accurately discloses information reflected on the variable rate loan program disclosures including but not limited to the interest rate margins and maximum interest rate to all consumers applying for a variable rate mortgage loan in accordance with the Division's regulation 209 CMR 32.19(2).
  7. Home Loan Center shall establish, implement, and maintain procedures to ensure that the Corporation accurately discloses its license type and number to all consumers, in writing, at the time a fee is paid or a mortgage loan application is accepted, in accordance with the Division's regulation 209 CMR 42.15.
  8. Home Loan Center shall establish, implement and maintain procedures to ensure that the Corporation records and maintains all loan documents 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.
    1. Home Loan Center shall establish, implement and maintain procedures to ensure that all loan applications and disclosure forms are retained for a minimum of three years and are properly dated and that the Corporation retains evidence sufficient to allow the Commissioner to determine whether time-sensitive documents are being provided to consumers within the mandated timing requirements; and
    2. Home Loan Center shall establish, implement and maintain procedures to ensure that the Corporation retains for a minimum of three years all correspondence and records relating to each loan, including but not limited to: all documents related to signed loan application forms; credit reports; appraisals; underwriting information; employment verification documentation; and all required disclosure forms.
  9. Home Loan Center shall establish, implement, and maintain procedures to ensure that the Corporation timely files all statements and reports required by the Commissioner, including but not limited to, quarterly and annual reports.
  10. Home Loan Center shall establish, implement, and maintain policies and 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 necessarily require that the Corporation implement internal controls to ensure that, for all HMDA reportable loan applications, Home Loan Center accurately compiles and records all required data in the Corporation's HMDA Loan Application Register ("LAR"). The Corporation shall conduct periodic compliance testing of the procedures to ensure ongoing compliance with these requirements.
  11. Home Loan Center shall establish, implement and maintain procedures to ensure that the Corporation notifies the Division, in writing, within one business day, of the occurrence of any significant events, including but not limited to the institution of formal or informal regulatory action, in any state against the Corporation, in accordance with 209 CMR 42.12(1)(c).
  12. Home Loan Center shall comply with all laws and regulations applicable to conducting the business of a mortgage lender and mortgage broker, 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.
    1. Within forty-five (45) days from the effective date of this Consent Order, Home Loan Center 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 provisions of law applicable to those engaged in the business of a mortgage lender and mortgage broker 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
    2. Within forty-five (45) days from the effective date of this Consent Order, Home Loan Center 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.
  13. On the thirtieth (30th) day after the end of each calendar quarter beginning with the calendar quarter ending March 31, 2012, Home Loan Center 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 Loan Center 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 the Corporation's compliance condition in Massachusetts and the results thereof.
  14. The reporting requirement to the Division referenced in Section 13 of this Consent Order shall remain in effect as long as Home Loan Center is a licensed mortgage lender or licensed mortgage broker in the Commonwealth of Massachusetts 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.
  15. Nothing in this Consent Order shall be construed as permitting Home Loan Center to violate any law, rule, regulation, or regulatory bulletin to which Home Loan Center is subject.
  16. In consideration of the foregoing Consent Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke Home Loan Center’s mortgage lender and mortgage broker licenses under General Laws chapter 255E, section 6, while this Consent Order is in effect.
  17. 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.
  18. This Consent Order shall become effective immediately upon the date of its issuance.
  19. 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.
  20. 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 Home Loan Center.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 30th day of January, 2012

By:
David J. Cotney
Commissioner of Banks

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