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Consent Order

Consent Order Quicken Loans, Inc. and One Reverse Mortgage, LLC

Date: 04/20/2018
Organization: Division of Banks
Docket Number: 2017-005
Location: Detriot, Michigan and San Diego, California

Table of Contents

WHEREAS, QUICKEN LOANS INC., Detroit, Michigan (Quicken Loans) and ONE REVERSE MORTGAGE, LLC, San Diego, California (ORM; ORM together with Quicken Loans, the Companies; and each of ORM and Quicken Loans, a Company), are independent companies owned by a common parent, are each a licensed mortgage lender under Massachusetts General Laws chapter 255E, section 2, have each been advised of its right to Notice and Hearing pursuant to General Laws chapter 255E, section 7(a), and each having waived its rights, each enter into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (Consent Agreement) with representatives of the Division of Banks (Division) dated April 20, 2018, 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, the Companies each agree to the issuance of this CONSENT ORDER (Consent Order) by the Commissioner of Banks (Commissioner);

WHEREAS, an examination of Quicken Loans was conducted pursuant to General Laws chapter 255E, section 8, as of August 2, 2016, to assess Quicken Loans’ lending performance under Mortgage Lender Community Investment standards described in the Division’s regulation 209 CMR 54.00 et seq.;

WHEREAS, the Report of Examination (Report) issued pursuant to the Division’s examination of Quicken Loans as of August 2, 2016 alleged substantial non-compliance with applicable Massachusetts and federal statues, rules, and regulations governing the conduct of those engaged in the business of a mortgage lender in Massachusetts with respect to Quicken Loans' reporting of certain data elements under the Home Mortgage Disclosure Act (HMDA);

WHEREAS, an examination of ORM was conducted pursuant to General Laws chapter 255E, section 8, as of November 6, 2017, to assess ORM’s compliance with the laws and regulations applicable to its business;

WHEREAS, the Division has made no finding that either Company has interpreted and applied such law in bad faith or for the purpose of intentionally avoiding its reporting obligations under HMDA; and

WHEREAS, the Division and Quicken Loans now seek to resolve by mutual agreement the matters identified in the Report, and the Division and ORM now seek to resolve by mutual agreement similar matters arising in connection with the referenced examination of ORM.

Order

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

  1. The recitals set forth above are incorporated and made a part of this Order.
  2. In response to the Report, Quicken Loans has implemented certain changes to its policies and procedures for collection and reporting of HMDA data, so that it treats certain consumer requests as applications for HMDA-reporting purposes at an earlier stage than had been the case prior to the issuance of the Report. A detailed description of Quicken Loans’ policies and procedures, changed in response to the Report, and of ORM’s parallel policies and procedures for collection and reporting of HMDA data has been provided confidentially to the Division in writing, contemporaneous with this Consent Order (Policy Description).
  3. The Companies shall remit an aggregate payment in the amount of two hundred and fifty thousand dollars ($250,000). The Companies shall remit payment in full in the amount indicated above within seven (7) days of the execution of this Consent Order, payable to the “Commonwealth of Massachusetts,” with the executed copy of the Consent Order, to the Office of the Commissioner of Banks, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118.
  4. Within thirty (30) days of the effective date of this Consent Order, the Companies each shall engage an independent auditing firm (Auditing Firm) to conduct an audit review of the continued implementation of the policies and procedures outlined in Paragraph 2 of this Consent Order and in the Policy Description and any corrective actions required of Quicken Loans by the Report. The Auditing Firm shall issue reports (Audit Reports) assessing each of the Companies’ compliance with such policies and procedures with respect to each of their annual HMDA data filings for Calendar Years 2017 and 2018, as well as compliance during each quarter during 2018. The first Audit Report, covering Calendar Year 2017 and the first and second quarters of 2018, shall be issued by the Auditing Firm to the Division by August 31, 2018. The Audit Report covering the third quarter of 2018 shall be issued by the Auditing Firm to the Division by November 30, 2018. The Audit Report covering the fourth quarter of 2018 shall be issued by the Auditing Firm to the Division by February 28, 2019, and the Audit Report covering Calendar Year 2018 shall be issued by the Auditing Firm to the Division by March 29, 2019.
  5. The Companies each shall obtain the prior written approval from the Division regarding the scope of the audit before reviews are initiated. The Audits shall be conducted by the Auditing Firm previously agreed upon by the Division.
  6. Nothing in this Consent Order, including the changes made by Quicken Loans described above and the payment set forth in paragraph 3, shall be construed as an admission, concession, or agreement that either or both of the Companies failed to comply with any applicable law, rule, regulation, or regulatory bulletin to which the Companies are subject and which is enforceable by the Division.
  7. The Companies each shall establish, implement, maintain, and periodically update operating policies and training procedures to ensure that all applicable personnel involved in the collection and reporting of HMDA data possess a comprehensive understanding of the policies and procedures referred to in Paragraph 2 of this Consent Order and in the Policy Description. Such training shall necessarily ensure the proper implementation and execution of all revised policies and procedures adopted pursuant to Paragraph 2 of this Consent Order. Such policies and training procedures must be designed to ensure that all relevant training provided to employees is tracked and documented.
  8. On the thirtieth (30th) day after the end of each calendar quarter following the date of this Consent Order, beginning with the calendar quarter ending June 30, 2018, the Companies each shall furnish written progress reports to the Division, which shall address the following:

    a.
     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
    b. 
    Written findings prepared by each Company describing management’s and staff persons’ adherence to the policies and procedures referred to in Paragraph 2 of this Consent Order and in the Policy Description and to applicable statutes, regulations, and rules related to the matters that are the subject of this Consent Order, as well as a description of any operational changes implemented during such quarter which are intended to improve such Company’s compliance condition in Massachusetts and the results thereof.
  9. The reporting requirement to the Division referenced in Section 8 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. Upon the request of either Company, the Division may terminate this reporting requirement at its discretion.
  10. Nothing in this Consent Order shall be construed as permitting the Companies to violate any law, rule, regulation, or regulatory bulletin to which the Companies are subject.
  11. Failure of a Company to comply with the terms of this Consent Order shall constitute grounds for license suspension and/or revocation of such Company, or other formal regulatory action against such Company pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
  12. In consideration of this Consent Order, subject to Paragraphs 10 and 11, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke either Company’s mortgage lender license or to take any other formal or other action against either Company with respect to the matters covered by this Consent Order.
  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 the Commissioner or a court of competent jurisdiction modifies, terminates, suspends, or sets aside any provision of this Consent Order. 
  15. The Companies’ rights and obligations under this Consent Order are separate from each other, and shall survive separately in the event, among other possibilities, that one Company shall no longer be affiliated with the other or shall cease to be a licensee.
  16. 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 either of the Companies.

 

By order and direction of the Commissioner of Banks:

Dated at Boston, Massachusetts, this 20th day of April, 2018.

By:

Terence A. McGinnis

Commissioner of Banks

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