Consent Order  The Mortgage Stop, Inc. and Thomas Terranova Jr., Individually

Date:	08/18/2011
Organization:	Division of Banks
Docket Number:	2011-028
Location:	Saugus, MA

The Mortgage Stop, Inc., Saugus, MA and Thomas Terranova Jr., Individually - Consent Order

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE BROKER AND
MORTGAGE LOAN ORIGINATOR
LICENSING

Docket No. 2011-028

CONSENT ORDER

In the Matter of

THE MORTGAGE STOP, INC.
Mortgage Broker License No. MB1734
Saugus, Massachusetts

and

THOMAS D. TERRANOVA, Jr, Individually
Mortgage Loan Originator License No. MLO8569

WHEREAS, THE MORTGAGE STOP, INC., Saugus, Massachusetts ("The Mortgage Stop" or the "Corporation"), and THOMAS D. TERRANOVA, JR. ("Thomas Terranova") a licensed mortgage broker under Massachusetts General Laws chapter 255E, section 2, and a licensed mortgage loan originator under Massachusetts General Laws chapter 255F, section 2, respectively, have been advised of their 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 August 18, 2011, 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 broker and/or mortgage loan originator, The Mortgage Stop and Thomas Terranova agree 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 those engaged in the business of a mortgage broker in Massachusetts pursuant to Massachusetts General Laws chapter 255E, section 2 and the Division's regulations 209 CMR 42.00 et seq.;

WHEREAS, the Division, through the Commissioner, has jurisdiction over the licensing and regulation of persons engaged in the business of a mortgage loan originator in Massachusetts pursuant to Massachusetts General Laws chapter 255F, section 2 and the Division's regulations 209 CMR 41.00 et seq.;

WHEREAS, at all relevant times, Thomas Terranova was the President and sole owner of The Mortgage Stop;

WHEREAS, at all relevant times, Thomas Terranova performed as a mortgage loan originator on behalf of The Mortgage Stop;

WHEREAS, an examination/inspection of The Mortgage Stop was conducted pursuant to General Laws chapter 255E, section 8, as of January 3, 2011 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 broker in the Commonwealth;

WHEREAS, the Report of Examination/Inspection (the "Report") issued pursuant to the Division's examination/inspection of The Mortgage Stop 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 broker in Massachusetts; and

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

ORDER

NOW COME the parties in the above-captioned matter, the Division and The Mortgage Stop, and Thomas Terranova, individually, and stipulate and agree as follows:

1. The Mortgage Stop shall establish, implement and maintain procedures to ensure that all mortgage loan originators with whom the Corporation conducts business are duly licensed as mortgage loan originators under Massachusetts General Laws chapter 255F, and properly sponsored through the Nationwide Mortgage Licensing System by The Mortgage Stop.
   1. The Mortgage Stop agrees to pay sixteen thousand dollars ($16,000.00) in satisfaction of an agreed upon administrative penalty collected in consideration of the Corporation's conducting business with mortgage loan originators who did not hold an active Massachusetts mortgage loan originator license. The Mortgage Stop 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, Attn: Mortgage Broker Examination Unit, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118.
   2. Thomas D. Terranova, Jr. shall submit a payment of three thousand dollars ($3,000.00) in satisfaction of an administrative penalty collected in consideration of his originating residential mortgage loans on behalf of the Corporation when he was not actively licensed as a mortgage loan originator in Massachusetts. Thomas D. Terranova, Jr. 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, Attention: Mortgage Broker Examination Unit, 1000 Washington St., 10th Floor, Boston, MA, 02118.
2. The Mortgage Stop shall establish, implement, and maintain procedures to ensure that the Corporation refrains from providing any consumer with any disclosure which, pursuant to the applicable statute, regulation, or regulatory bulletin, is intended to be issued exclusively by the lender or creditor in the residential mortgage loan transaction; including, without limitation, the disclosures identified in the Report.
   1. The provisions of this Section of the Consent Order shall necessarily prohibit The Mortgage Stop from issuing statements of reasons of credit denial, termination, or change.
3. The Mortgage Stop shall revise its "Borrower's Certification and Authorization" form to eliminate any representations or statements that could be considered false, misleading, or have the tendency to be misleading, including, but not limited to, any representation that the Corporation, a licensed mortgage broker, is approving or funding the loan.
4. The Mortgage Stop shall establish, implement and maintain procedures to ensure that the Corporation maintains and uses 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. Such procedures shall necessarily require that the Corporation properly documents the initial date of application and ensures that all disclosures are properly dated and maintained in a manner that will allow the Commissioner to determine whether time-sensitive documents are being provided to consumers within the mandated timing requirements.
5. The Mortgage Stop shall comply with all laws and regulations applicable to its conducting the business of a 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 twenty (20) days of receipt of the Report, all violations and areas of concern addressed in the Report.
   1. Within twenty (20) days of The Mortgage Stop'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 The Mortgage Stop to implement all corrective actions set forth in: (i) the "Examiner's Comments and Conclusions" section of the Report and (ii) the provisions of this Consent Order.
   2. Within thirty (30) days of the effective date of this Consent Order, The Mortgage Stop shall establish, implement, and maintain quality control standards which provide for a loan review process to assess the Corporation's compliance with: (i) the statutes, rules, regulations, regulatory bulletins, and other relevant provisions of law applicable to those engaged in the business of a mortgage broker in Massachusetts, and (ii) the provisions of this Consent Order; and
   3. The Mortgage Stop 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.
6. On the thirtieth (30) day after the end of each calendar quarter following the date of this Consent Order, The Mortgage Stop 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 The Mortgage Stop 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 Mortgage Stop'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 The Mortgage Stop to violate any law, rule, regulation, or regulatory bulletin to which The Mortgage Stop 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 The Mortgage Stop's mortgage broker licenses under Massachusetts General Laws chapter 255E, section 6, or Thomas Terranova's mortgage loan originator license under Massachusetts General Law chapter 225F while this Consent Order is in effect.
10. The Mortgage Stop agrees that, in the event that the Corporation and/or Thomas Terranova, Jr. fails to submit the payments set forth in this Consent Order in the amounts specified herein and in accordance with the applicable deadlines, the Division shall be authorized to submit a claim for such amounts against the mortgage broker Massachusetts surety bond maintained by The Mortgage Stop pursuant to the Division's regulations 209 CMR 42.06(2)(a).
11. Failure to comply with the terms of this Consent Order shall constitute grounds for license suspension and/or revocation, or other formal regulatory actions pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
12. This Consent Order shall become effective immediately upon the date of its issuance.
13. 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.
14. 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 The Mortgage Stop and/or Thomas Terranova, Jr.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 18th day of August, 2011

David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts

THIS CONSENT ORDER WAS TERMINATED ON DECEMBER 10, 2014.