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Consent Order

Consent Order Semper Home Loans, Inc.

Date: 01/23/2019
Organization: Division of Banks
Docket Number: 2018-011
Location: Providence, Rhode Island

WHEREAS, SEMPER HOME LOANS, INC. (Semper 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 January 23, 2019, 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 or mortgage broker, Semper agrees to the issuance of this CONSENT ORDER (Consent Order) by the Commissioner of Banks (Commissioner);

WHEREAS, a compliance examination of Semper was conducted pursuant to General Laws chapter 255E, section 8, as of December 6, 2017 to assess the Corporation’s level of compliance with applicable Massachusetts and federal statutes, rules and regulations governing the conduct of those engaged in the business of a mortgage lender and mortgage broker in the Commonwealth;

WHEREAS, the Report of Examination (Report) issued pursuant to the Division’s  Examination, alleged substantial non-compliance with applicable Massachusetts and federal statutes, rules, and regulations governing the conduct and licensing of those engaged in the business of a mortgage lender and mortgage broker in the Commonwealth; and

WHEREAS, the parties now seek to resolve by mutual agreement, the matters identified in the Report;

Table of Contents

Order

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

  1. Semper shall establish, implement, and maintain policies and procedures for the monitoring and oversight of its settlement agents and/or closing attorneys to ensure that no fees for settlement services are collected from consumers that are in excess of the actual cost of the services provided.

    a. 
    Semper shall reimburse the consumers identified in the Report for the excessive fees that were collected.   Evidence of reimbursements shall be submitted to the Division in the manner described in the Report.

    b. Semper shall conduct a review of Massachusetts residential mortgage loans closed since January 1, 2015 to identify transactions where excessive fees for settlement services were collected from consumers; and shall reimburse the consumers for the amounts that were in excess of the cost of the services provided. Evidence of any reimbursements shall be submitted to the Division in the manner described in the Report.
     
  2. Semper shall establish, implement, and maintain policies and procedures to ensure that no fees are collected from consumers before the consumers have indicated an intent to proceed with the transaction, as required pursuant to 12 CFR 1026.19(e)(2)(i)(A).

    a. 
    Semper shall reimburse the consumers identified in the Report for the full amount of the appraisal fees that were collected before the consumers indicated their intent to proceed.  Evidence of reimbursements shall be submitted to the Division in the manner described in the Report.
     
  3. Semper shall establish, implement and maintain policies and procedures to ensure that the Corporation does not contract for, or impose, late charges that are in excess of the amount permitted under Massachusetts General Laws chapter 183, section 59.  Compliance with this Section of the Consent Order shall require that Semper review and revise as necessary all documentation containing provisions referencing late payment charges to ensure that such provisions are in compliance.

    a. Semper shall contact the servicer of the loans identified in the Report to determine if the borrowers were charged late fees that are in excess of the statutory limit, and shall ensure that such borrowers are reimbursed for all such excessive charges.

     
  4. Semper 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 12 CFR  1003 (Regulation C).  Such procedures shall require that the Corporation implement internal controls to ensure that, for all HMDA reportable loan applications, Semper accurately compiles and records all required data in the Corporation’s HMDA Loan Application Register  (LAR).

    a. Semper shall establish, implement, maintain, and periodically update internal controls 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 ensure the proper implementation and execution of the revised practices and procedures adopted by Semper pursuant to this Section of the Consent Order.

     
  5. Semper shall submit a written profit plan, consisting of goals and strategies for providing the foundation for improved profitability.

    a. The written profit plan shall take in to consideration the current business environment and identify all sources of income and areas for conserving expenses in order to encourage improved performance, and shall include, at a minimum:
    (i) Identification of the major areas in, and means by which, management will seek to improve the Corporation’s operating performance and earnings;
    (ii) Realistic and comprehensive budgets;
    (iii) A budget review process to monitor the Corporation's income and expense to compare actual figures with budgetary projections;
    (iv) 
    A description of the operating assumptions that form the basis for, and adequately support, major projected income and expense components; and
    (v) A 
    statement of the Board of Director’s commitment to the continued maintenance of satisfactory earnings performance.

    b. 
    Performance under the written profit plan shall be reported to the Division and submitted with the quarterly progress reports prepared pursuant to Section 7 of this Consent Order.
     
  6. Semper shall establish, implement policies and procedures to ensure that the Corporation maintains all documentation regarding its marketing arrangements and third party relationships, and is able to provide such documentation upon the Division’s request.
     
  7. Semper shall address all matters requiring attention set forth in the Report within the time-frames contained therein.  Semper shall also implement all corrective actions described in the Report that are not specifically addressed by this Consent Order.

    a. Semper shall establish, implement, and maintain procedures and policies to ensure that all applicable personnel 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.

    b. On the thirtieth (30th) day after the end of each calendar quarter following the date of this Memorandum, Semper shall furnish written progress reports to the Division via secure email to DOBProgressReport@mass.gov.  Such progress reports shall detail the form, content, and manner of any actions taken to address each section of this Consent Order, and describe, in detail, any other consumer compliance initiatives instituted during the calendar quarter to improve the compliance position of Semper, and the results thereof.  Each progress report submitted to the Division pursuant to this Section of the Consent Order shall be reviewed and signed by a duly authorized officer of the Corporation.

     
  8. Nothing in this Consent Order shall be construed as permitting Semper to violate any law, rule, regulation, or regulatory bulletin to which the Corporation 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 Semper’s mortgage lender or mortgage broker license under Massachusetts General Laws chapter 255E, section 6, while this Consent Order is in effect, but subject to the provisions of Section 10 of this Consent Order.
     
  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 the Commissioner or a court of competent jurisdiction modifies, terminates, suspends, or sets aside any provision of this Consent Order.
     
  13. This Consent Order and the Consent Agreement are the complete documents representing the resolution of this matter and supersede and replace any previous agreements between the Division and Semper.

By the order and direction of the Commissioner of Banks:

Dated at Boston, Massachusetts, this 23rd day of January, 2019.
By: Merrily S. Gerrish, Acting Commissioner of Banks

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