Date: | 09/06/2022 |
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Organization: | Division of Banks |
Docket Number: | 2022-002 |
Location: | Boston, Massachusetts |
WHEREAS, Kind Lending, LLC. (“Kind Lending” or the “Company”), with its main office located at 4 Hutton Centre Drive, Suite 1000, Santa Ana, California, 92707, has been advised of its right to Notice and Hearing pursuant to Massachusetts General Laws (M.G.L.) 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 September 6, 2022, 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 and mortgage broker, Kind Lending 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 M.G.L. chapter 255E, section 2;
WHEREAS, M.G.L. chapter 255E, section 2, requires entities to be licensed by the Commissioner if they are engaged in the business of a mortgage lender or mortgage broker in Massachusetts as defined by M.G.L. chapter 255E, section 1;
WHEREAS, M.G.L. chapter 93A, section 2(a) states, “Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.”;
WHEREAS, regulation 940 Code of Massachusetts Regulations (C.M.R.) 8.06(1) states, “It is an unfair or deceptive act or practice for a mortgage broker or lender to make any representation or statement of fact in an advertisement if the representation or statement is false or misleading or has the tendency or capacity to be misleading, or if the mortgage broker or lender does not have sufficient information upon which a reasonable belief in the truth of the representation or statement could be based.”;
WHEREAS, Kind Lending has its main office located at 4 Hutton Centre Drive, Suite 1000, Santa Ana, California, 92707;
WHEREAS, Kind Lending allegedly engaged in the business of a mortgage lender and mortgage broker from at least October 25, 2019 through present in Massachusetts without the appropriate license;
WHEREAS, according to records maintained on file with the Division, and as recorded on the Nationwide Multi-State Licensing System and Registry (NMLS), on or about April 9, 2021 and on or about May 12, 2021, Kind Lending submitted an application to engage in the business of a mortgage lender and mortgage broker (the “Applications”), respectively;
WHEREAS, during a review of Kind Lending’s Applications, the Division became aware that, on or about October 25, 2019, Kind Lending entered into a “Transition Services Agreement” with a separate entity licensed to engage in the business of a mortgage lender, mortgage broker, and debt collection in Massachusetts (the “Entity”) which contained the following provisions:
This Transition Services Agreement (this “Agreement”) is dated as of October 25, 2019 (the “Effective Date”), by and between [the Entity] dba Kind Lending (“Provider”), and Kind Lending, LLC (the “Company”) (together, the “Parties”)
WHEREAS, [the Entity] is a retail mortgage business (the “Business”);
WHEREAS, Company has been formed with the intent of establishing and operating a wholesale mortgage business (“Wholesale Business”);
WHEREAS, the Company is in the process of procuring the regulatory licenses and permits required to operate the Wholesale Business;
WHEREAS, during the time period necessary for Company to obtain such regulatory licenses and permits and otherwise establish the infrastructure necessary to operate a Wholesale Business (the “Transition Period”), Company desires [the Entity] to establish and operate the Wholesale Business that, upon expiration of the Transition Period and mutual agreement between the Parties, will be transferred over to Company pursuant to the terms of a Purchase Agreement to be negotiated by the Parties;
WHEREAS, during a review of Kind Lending’s Applications, the Division became aware that the Kind Lending brand was displayed with the NMLS number associated with the Entity on certain webpages and marketing materials which the Division believes was misleading or had the ability or capacity to mislead consumers into thinking that the Entity and Kind Lending were not separate and distinct companies;
WHEREAS, as a consequence of the foregoing, the Division believes that the Company had engaged in the business of a mortgage lender and mortgage broker in Massachusetts; and
WHEREAS, the parties now seek to resolve by mutual agreement, the matters identified in the Order.