Consent Order  WCS Lending, LLC

Date:	01/13/2012
Organization:	Division of Banks
Docket Number:	2011-095
Location:	Boca Raton, FLA

WCS Lending, LLC - Boca Raton, FLA - Consent Order

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LENDER AND
MORTGAGE BROKER
LICENSING
Docket No. 2011-095

CONSENT ORDER

In the Matter of
WCS LENDING, LLC
Boca Raton, Florida

Mortgage Company License Nos. MC4260 et al.

WHEREAS, WCS LENDING, LLC, Boca Raton, Florida ("WCS Lending" or the "Company"), 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 13, 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 lender mortgage broker, WCS Lending agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");

WHEREAS, an examination/inspection of WCS Lending was conducted pursuant to General Laws chapter 255E, section 8, as of December 22, 2010 to assess the Company’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 and mortgage broker in the Commonwealth; and

WHEREAS, the Report of Examination/Inspection (the "Report") issued pursuant to the Division’s examination/inspection of WCS Lending as of December 22, 2010 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 and mortgage broker in Massachusetts.

ORDER

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

1. WCS Lending 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 require that the Company implement internal controls to ensure that, for all HMDA reportable loan applications, WCS Lending accurately compiles and records all required data in the Company’s HMDA Loan Application Register ("LAR").
   1. Within thirty (30) days of the effective date of this Consent Order, WCS Lending must petition the Federal Reserve Board to permit the filing of WCS Lending’s complete LAR containing the HMDA data collected for all Massachusetts residential mortgage loan applications originated during calendar year(s) 2009 and 2010, as applicable.
   2. WCS Lending shall establish, implement, and maintain 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 necessarily ensure the proper implementation and execution of the revised practices and procedures adopted by WCS Lending pursuant to this Section of the Consent Order.
   3. Within thirty (30) days of the effective date of this Consent Order, WCS Lending shall prepare and submit to the Division a written report detailing the HMDA data that the Company filed pursuant to Section 1(a) of this Consent Order.
   4. WCS Lending 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 Company’s failure to comply with the statutes, rules and regulations governing the conduct of those engaged in the business of a mortgage lender in Massachusetts. WCS Lending 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 Lender Examination Unit, 1000 Washington Street, 10^th Floor, Boston, Massachusetts 02118.
2. WCS Lending shall establish, implement and maintain procedures to ensure that all mortgage loan originators with whom the Company conducts business are properly licensed as mortgage loan originators under Massachusetts General Laws chapter 255F, and sponsored through the Nationwide Mortgage Licensing System by WCS Lending or by the licensed mortgage broker, as appropriate.
   1. WCS Lending agrees to submit a payment in the amount of four thousand dollars ($4,000.00) in satisfaction of an administrative penalty collected in consideration of the Company’s conducting business with mortgage loan originators who did not hold an active Massachusetts mortgage loan originator license. WCS Lending 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 Lender Examination Unit, 1000 Washington Street, 10^th Floor, Boston, Massachusetts 02118.
3. WCS Lending shall establish, implement, and maintain procedures to ensure that all loan fees, points, or similar fees collected by the Company in a mortgage transaction involving residential property located in the Commonwealth are not charged to consumers except to the extent that such loans fees or points have been properly disclosed to the consumers by the Company, in writing, prior to the closing of the mortgage loan in accordance with Massachusetts General Laws chapter 183, section 63.
   1. The Company shall reimburse the consumer identified in the Report for the amount collected as an underwriting fee at settlement that had not been disclosed to the consumer, in writing, prior to loan closing. The amount of such reimbursement shall equal the difference between the actual charges assessed to the consumer and the amount disclosed in writing for such fee prior to loan closing. With its written response to the Report, the Company shall submit evidence of the reimbursement issued. Evidence of the reimbursement shall include the consumer’s name, the date the loan closed, the check number, the amount of the reimbursement, and a certified mail receipt to illustrate the consumer’s receipt of the reimbursement.
4. WCS Lending shall establish, implement, and maintain policies and procedures to ensure that, when acting in the capacity of a mortgage lender, prior to taking a rate lock commitment fee or otherwise offering or entering a mortgage loan rate lock commitment, the Company provides to consumers all of the information that is required pursuant to the Division’s regulation 209 CMR 42.11A(4).
5. WCS Lending shall establish, implement and maintain procedures to ensure that the Company establishes whether it is performing in the capacity of a mortgage broker or mortgage lender at the inception of the loan transaction and shall ensure that all disclosures provided to the consumers accurately reflect the capacity in which the Company is performing.
6. WCS Lending shall establish, implement and maintain procedures to ensure that all applicants whose residential mortgage loan application is denied by WCS Lending 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 Company’s books and records as evidence of compliance.
7. WCS Lending shall establish and implement procedures to maintain all loan files in the Company’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.
   1. WCS Lending shall ensure that it retains for a minimum of three years all documents, correspondence, and records relating to each funded, denied, abandoned, and withdrawn loan application.
   2. WCS Lending shall ensure that the Company 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.
   3. WCS Lending shall submit payment of one thousand five hundred dollars ($1,500.00) in satisfaction of an administrative penalty collected in consideration of the failure to maintain its books and records as required pursuant to General Laws chapter 255E, section 8 and the Division’s regulation 209 CMR 42.09. WCS Lending shall remit payment in full of the amount indicated to the "Commonwealth of Massachusetts," with the executed copy of the Consent Agreement, to the Office of the Commissioner of Banks, Attn: Mortgage Lender Examination Unit, 1000 Washington St., 10^th Floor, Boston, Massachusetts 02118.
8. WCS Lending shall establish, implement, and maintain procedures to ensure that, when operating in the capacity of a mortgage broker, the Company fully complies with the Division’s regulation 209 CMR 42.12A(3) concerning restrictions and prohibitions imposed upon mortgage brokers who convey rate lock information between a mortgage lender and a consumer. Such procedures shall necessarily ensure that WCS Lending desists from providing consumers with any written documentation, or oral representations or assurances, that state, suggest, or infer that the Company is locking an interest rate on behalf of the consumer for residential property in Massachusetts and shall necessarily include reviewing and revising as necessary all documentation provided to consumers in order to ensure compliance with the provisions of the Division’s regulation 209 CMR 42.12A(3).
9. WCS Lending shall establish, implement, and maintain procedures to ensure that, when acting in the capacity of a mortgage broker, the Company refrains from issuing the "Statement of Borrower’s Benefits" or any other such documentation indicating that a home loan is in a borrower’s interest pursuant to the Division’s regulation 209 CMR 53.07. It is understood that when the Company brokers a loan subject to the Division’s regulations regarding a lender’s determination and documentation of borrower’s interest, WCS Lending is not permitted to make an affirmative determination that a home loan is in the borrower's interest nor assign the responsibility for making this determination to the borrower. However, the Company may request information from a borrower on behalf of the lender or transmit information to the borrower on behalf of the lender.
   1. The Company shall issue a written notification to each mortgage lender who has received the "Statement of Borrower’s Benefits" from the Company. Said written notification shall be in conformance with the requirements set forth in the Report. The Company shall retain a copy of each notification in the Company’s books and records until such time as the Division conducts its next Examination/Inspection.
10. WCS Lending shall revise its "Borrowers’ Certification and Authorization" form to eliminate any representation or statement that could be considered false, misleading, or have the tendency to be misleading, including, but not limited to, any representation that the Company, when acting in the capacity of a mortgage broker, is approving or funding the loan.
11. WCS Lending shall comply with all laws and regulations applicable to its 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 twenty (20) days of receipt of the Report, all violations and areas of concern addressed in the Report.
    1. Within twenty (20) days of WCS Lending’s receipt of the Report, the Company 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 WCS Lending 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 from the effective date of this Consent Order, WCS Lending shall establish, implement, and maintain quality control standards which provide for a loan review process to assess the Company’s compliance with: (a) 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 (b) the provisions of this Consent Order. Such quality control standards shall be designed to prevent the recurrence of the violations addressed in the Report; and
    3. WCS Lending 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.
12. On the thirtieth (30^th) day after the end of each calendar quarter following the date of this Consent Order, WCS Lending 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 WCS Lending 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 WCS Lending’s compliance condition in Massachusetts and the results thereof.
13. The reporting requirement to the Division referenced in Section 12 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.
14. WCS Lending agrees that, in the event that the Company 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 lender and/or mortgage broker Massachusetts surety bond maintained by WCS Lending pursuant to the Division’s regulations 209 CMR 42.03(2)(a) and 209 CMR 42.06(2)(a).
15. Nothing in this Consent Order shall be construed as permitting WCS Lending to violate any law, rule, regulation, or regulatory bulletin to which WCS Lending is subject.
16. In consideration of the foregoing Consent Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke WCS Lending’s mortgage lender licenses under General Laws chapter 255E, section 6, while this Consent Order is in effect.
17. 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.
18. This Consent Order shall become effective immediately upon the date of its issuance.
19. 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.
20. This Consent Order and the Consent Agreement are the complete documents representing the resolution of this matter. There are no other agreements, promises, representations, or warranties between the Division and WCS Lending.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 13th day of January, 2012

By:
David J. Cotney
Commissioner of Banks