Order  In the Matter of Adam J. Lynds

Date:	04/10/2019
Organization:	Division of Banks
Docket Number:	2019-0002

Suffolk, SS.

Commissioner of Banks
Mortgage Loan Originator Licensing
Docket No. 2019-0002

Mortgage Loan Originator
Former License No. MLO 237657

 

This Notice of Intention to Issue an Order of Prohibition, Docket No. 2019-0002 (Notice of Order), commences an adjudicative proceeding under the provisions of General Laws, chapter 30A, section 10 and the Standard Adjudicatory Rules of Practice and Procedure, 801 CMR 1.01 and 1.03.

Jurisdiction

1. Pursuant to General Laws chapter 255F, section 2, the Commissioner has jurisdiction over the licensing and regulation of persons and entities engaged in the business of a mortgage loan originator in Massachusetts. 
    
2. Pursuant to General Laws chapter 255F, section 11(d), the Commissioner may issue a written notice of intention to prohibit a person from any further actions, in any manner, as a mortgage loan originator or to prohibit the person from being employed by, as an agent of, or operating on behalf of a mortgage loan originator or any other business which requires a license from the Commissioner.
    
3. General Laws chapter 255F, section 11(d)(i) states that the Commissioner may issue such Notice of Order when any person has, directly or indirectly, violated any section of General Laws chapter 255F or any rule or regulation promulgated thereunder or any order issued by the Commissioner under General Laws chapter 255F or any written agreement entered between the person and the commissioner.

Factual Background and Statement of Allegations

• 4. According to the Division’s records and the Nationwide Multi-State Licensing System & Registry (NMLS), Adam J. Lynds (Lynds) was issued a Massachusetts mortgage loan originator license on September 21, 2010.
  
  5. According to the Division’s records and the NMLS, Lynds did not request renewal of his Massachusetts mortgage loan originator license for calendar year 2018 and his license was deemed terminated as of January 1, 2018.
  
  6. According to the Division’s records and the NMLS, Lynds applied again for a mortgage loan originator license on February 7, 2019.
  
  7. The requirements for an individual to obtain a Massachusetts mortgage loan originator license as described in M.G.L. c. 255F, section 4, include, but are not limited to: demonstrating that the individual possesses the financial responsibility, character, reputation, integrity, and general fitness such as to command the confidence of the community and to warrant a determination that the individual will engage in the business of a mortgage loan originator in an honest, fair, sound, and efficient manner.
  
  8. M.G.L. c. 255F, section 4(a) states, in pertinent part:
  [A] person shall have shown that he or she is not financially responsible when he or she has shown a disregard in the management of his or her own financial condition; and provided further, that a determination that an individual has not shown financial responsibility may include, but shall not be limited to: (a) current outstanding judgments, except judgments solely as a result of medical expenses; (b) current outstanding tax liens or other government liens and filings; (c) foreclosure within the past 3 years; or (d) a pattern of seriously delinquent accounts within the past 3 years[.]
  
  9. As a part of mortgage loan originator license application, the Division requested from Lynds a full list of all outstanding debts, liabilities, and notes.
  
  10. According to the Division’s records and the NMLS, Lynds was sponsored by a mortgage company (Mortgage Company A) from June 7, 2016 through April 10, 2017.
  
  11. Mortgage Company A informed the Division that during 2016 it gave Lynds two personal loans for a total original balance of $662,500.00.
  
  12. Upon leaving employment at Mortgage Company A, Lynds defaulted on the loans.
  
  13. As of April 1, 2019, Mortgage Company A reported to the Division that Lynds owed a total of $640,214.77 on the loans.
  
  14. Lynds failed to disclose the debts described in paragraph 11 to the Division.
  
  15. On March 17, 2017 Lynds received a personal loan from an individual with a principal amount of $320,000.00.
  
  16. As of March 25, 2019, Lynds reported that the current amount due on the personal loan from the individual was “$325,745.16 plus interest” but noted that “this amount is disputed as I made payments on the amount due”.
  
  17. On February 22, 2017, Lynds granted a mortgage for $100,000.00 to Peanut Properties LLC, on a property that he owns located at 352 Ladner Road, Easton, Maine, 04740 (Maine Property).
  
  18. On July 24, 2017 a federal tax lien was placed on the Maine Property for $103,199.73 in outstanding taxes from 2014 and 2015.
  
  19. On October 2, 2017 a federal tax lien was placed on the Maine Property for $60,712.06 in outstanding taxes from 2016.
  
  20. The town of Easton has assessed the value of the Maine Property at $57,400 for 2018.
  
  21. As of March 22, 2019 the Aroostook South Registry of Deeds does not show that either the mortgage or the federal tax liens have been discharged on the Maine Property.
  
  22. Lynds failed to disclose his mortgage on the Maine Property to the Division.
  
  23. According to the Division’s records and the NMLS, Lynds was employed at a bank from August 17, 2017 through April 3, 2018 (Bank A) as a Federally Registered Mortgage Loan Originator.
  
  24. While acting in his capacity as a Mortgage Loan Originator at Bank A, Lynds solicited a personal loan for himself from a bank customer who was in the process of applying for a mortgage loan from the bank.
  
  25. On January 23, 2018 Lynds signed a promissory note, taking an unsecured loan of $50,000 from the bank customer.
  
  26. At the time Lynds took the loan from the bank customer, Lynds had already defaulted on his personal loans with Mortgage Company A.
  
  27. On December 6, 2018, the bank customer filed a complaint with the Division against Lynds, stating in part that “Mr. Lynds used his role as a loan officer to convince me to loan him $50,000.”
  
  28. As of March 25, 2019, Lynds reported that the current amount due on the unsecured loan from the bank customer was “$68,883.95 plus interest” but noted that “this amount is disputed as I made payments on the amount due”.
  
  29. In July 2018, after leaving the Bank A and starting to work for another bank (Bank B), Lynds acquired a $158,550.00 loan from Bank B.
  
  30. Lynds defaulted on the $158,550.00 once he stopped working for Bank B and as of March 25, 2019 reported that the current amount on the loan was “[a]pproximately $155,000.00.”
  
  31. Upon information and belief, Lynds owes other debts that he failed to disclose as a part of his application.
  
  32. Lynds removed personal consumer information, including a consumer closing disclosure and pre-approval letter, from Bank A and shared the information with an unauthorized party outside Bank A without the permission of Bank A.  See e.g. 209 CMR 41.10(4).
  
  33. Based on the allegations contained in paragraphs 4-32, Adam J. Lynds has engaged in unfair and deceptive practices in violation of 209 CMR 41.10(9).
  
  34. Based on the allegations contained in paragraphs 4-32, Adam J. Lynds has failed to exhibit the financial responsibility, character, reputation, integrity, and general fitness such as to command the confidence of the community that would be required in order to hold a mortgage loan originator license pursuant to Massachusetts General Laws chapter 255F, section 4(a)(iii) and the Division’s regulation 209 CMR 41.04(2)(d).

Notice of Right to Request a Hearing

1. This Notice of Order shall become effective immediately upon service upon Adam J. Lynds.
    
2. You or your authorized representative are required to file an Answer or otherwise respond, in writing, to the Allegations contained in this Notice of Order within twenty-one (21) days of the effective date of this Notice of Order, pursuant to the Standard Adjudicatory Rules of Practice and Procedure, 801 CMR 1.01 (6)(d).
    
3. You have the right to request a hearing on this Notice of Order, as well as the right to be represented by counsel or other authorized representative, to call and examine witnesses, to introduce exhibits, to cross-examine witnesses who testify against you, and to present oral argument.
    
4. Any such request for a hearing on this Notice of Order shall be in writing, signed by Adam J. Lynds or by his duly authorized representative, and shall be delivered either by hand or certified mail, return receipt request, to the Division of Banks, 1000 Washington Street, 10^th Floor, Boston, MA 02118.
    
5. Pursuant to the Standard Adjudicatory Rules of Practice and Procedure 801 CMR 1.01(6)(c), the request for a hearing on this Notice of Order shall state clearly and concisely:
   
   a. why Adam J. Lynds should not be prohibited  from any further actions, in any manner, as a mortgage loan originator, or should not be prohibited from being employed by, as an agent of, or operating on behalf of a mortgage loan originator or any other business which requires a license from the Commissioner;
   
   b. why Adam J. Lynds should not be prohibited from applying for a Massachusetts mortgage loan originator license;
   
   c. any other relief that Adam J. Lynds seeks relative to this Notice of Order.
    
6. A hearing will be scheduled on this matter only upon receipt of a written request for such a hearing from Adam J. Lynds within twenty-one (21) days of service of this Notice of Order upon him.  If Adam J. Lynds fails to request a hearing within this twenty-one (21) day period or fails to appear at a scheduled hearing date, Adam J. Lynds shall be deemed to have consented to the issuance of an order of prohibition in accordance with this Notice of Order, pursuant to M.G.L. c. 255F, section 11(d).
    
7. The hearing shall be fixed for a date not more than thirty (30) days after the date of service upon the Commissioner of the request for hearing and will be conducted according to Massachusetts General Laws, chapter 30A, sections 10 and 11, and the Standard Adjudicatory Rules of Practice and Procedure, 801 CMR 1.01 and 1.03.
   ​​​​​​​

By order and direction of the Commissioner of Banks

Dated at Boston, Massachusetts, this 10th day of April, 2019.

By: 
Cynthia A. Begin
​​​​​​​Chief Risk Officer