Consent Order  Primary Residential Mortgage, Inc.

Date:	04/07/2010
Organization:	Division of Banks
Docket Number:	2010-196
Location:	Salt Lake City, UT

Primary Residential Mortgage, Inc., Salt Lake City, UT - Consent Order

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER AND
MORTGAGE BROKER
LICENSING
Docket No. 2010-196

CONSENT ORDER

In the Matter of
PRIMARY RESIDENTIAL MORTGAGE, INC.
Salt Lake City, Utah

Mortgage Company License Nos. MC1996 et al.

WHEREAS, PRIMARY RESIDENTIAL MORTGAGE, INC., Salt Lake City, Utah ("Primary Residential" 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 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 April 7, 2010, 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, Primary Residential agrees to the issuance of this CONSENT ORDER by the Commissioner of Banks ("Commissioner");

WHEREAS, a Mortgage Lender Community Investment examination of Primary Residential was conducted pursuant to General Laws chapter 255E, section 8, as of October 16, 2009, 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 (the "Report") issued pursuant to the Division's examination of Primary Residential as of October 16, 2009 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 Primary Residential, and stipulate and agree as follows:

1. Primary Residential 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 necessarily require that the Corporation implement internal controls to ensure that, for all HMDA reportable loan applications, Primary Residential accurately compiles and records all required data in the Corporation's HMDA Loan Application Register ("LAR").
   1. Within one hundred twenty (120) days of the effective date of this CONSENT ORDER, Primary Residential shall review for accuracy the HMDA data collected for all residential mortgage loans originated during calendar year 2008, and shall re-file with the Federal Reserve Board corrected information of all erroneous and/or incomplete data previously submitted on the LAR.
   2. Primary Residential shall establish, implement, and maintain operating policies and training procedures to ensure 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 Primary Residential pursuant to this Section of the CONSENT ORDER.
   3. Within one hundred twenty (120) days of the effective date of this CONSENT ORDER, Primary Residential shall prepare and submit to the Division a written report detailing the HMDA data that was re-filed by the Corporation pursuant to Section 1(a) of this CONSENT ORDER.

   Primary Residential 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 findings alleged in the Report issued to Primary Residential. Primary Residential 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, Boston, Massachusetts 02118. The Division shall remit the payment for deposit into the General Fund of the Commonwealth.

2. Primary Residential shall establish, implement and maintain procedures to ensure compliance with the provisions of the requirements set forth in the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. section 1601 et seq., as implemented by Regulations of the Board of Governors of the Federal Reserve System, 12 C.F.R. Part 202 ("Regulation B"). Such procedures shall necessarily require that the Corporation implement internal controls to ensure that Primary Residential collects and records the proper Government Monitoring information on all applications or properly records that the information was not provided by the applicant.
3. Primary Residential shall establish, implement and maintain procedures to ensure that, when the Corporation is acting in the capacity of a mortgage lender, all applicants whose residential mortgage loan applications are denied 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. Primary Residential 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. Such obligations shall necessarily include the duty to address and correct, within thirty (30) days of receipt of the Report, all violations and areas of concern addressed in the Report.
   1. Within thirty (30) days of Primary Residential'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 Primary Residential to implement all corrective actions set forth in:
      1. the "Significant Violations" section of the Report and
      2. the provisions of this CONSENT ORDER.
   2. Within sixty (60) days from the effective date of this CONSENT ORDER, Primary Residential shall establish, implement, and maintain quality control standards which provide for a loan review process to assess the Corporation's compliance with:
      1. the statutes, rules, regulations, regulatory bulletins, and other relevant provisions of law applicable to those engaged in the business of a mortgage lender and mortgage broker in Massachusetts and
      2. the provisions of this CONSENT ORDER. Such quality control standards shall be designed to prevent the recurrence of any alleged violations addressed in the Report.
5. Primary Residential shall establish, implement, and maintain procedures and policies to ensure 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.
6. By the thirtieth (30 ^th) day after the end of each calendar quarter following the date of this CONSENT ORDER, beginning with the calendar quarter ending June 30, 2010, Primary Residential 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 Primary Residential 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 Primary Residential's compliance condition in Massachusetts and the results thereof.
7. The reporting requirement to the Division referenced in Section 6 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.
8. Nothing in this CONSENT ORDER shall be construed as permitting Primary Residential to violate any law, rule, regulation, or regulatory bulletin to which Primary Residential is subject.
9. In consideration of the foregoing CONSENT ORDER, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke Primary Residential's mortgage lender and mortgage broker licenses under General Laws chapter 255E, section 6, while this CONSENT ORDER is in effect.
10. 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.
11. This CONSENT ORDER shall become effective immediately upon the date of its issuance.
12. 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.
13. 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 Primary Residential.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 7th day of April, 2010

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