|Organization:||Division of Banks|
Temporary Order to Cease and Desist Linda Shay DeFeo
Table of Contents
Linda Shay DeFeo - Temporary Order to Cease and Desist
COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
MORTGAGE LOAN ORIGINATOR LICENSING
Docket No. 2009-167-MLO
FINDINGS OF FACT AND
TEMPORARY ORDER TO
CEASE AND DESIST
In the Matter of
LINDA SHAY DEFEO
Mortgage Loan Originator License No. MLO44853
The Commissioner of Banks ("Commissioner") having determined that LINDA SHAY DEFEO ("Linda DeFeo"), has engaged in, or is engaging in, or is about to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 255F, and applicable regulations found at 209 CMR 41.00 et seq., hereby issues the following FINDINGS OF FACT AND TEMPORARY ORDER TO CEASE AND DESIST ("Temporary Order") pursuant to General Laws chapter 255F, section 11(a).
FINDINGS OF FACT
- The Division of Banks ("Division"), through the Commissioner, has jurisdiction over the licensing and regulation of persons engaged in the activities of a mortgage loan originator in Massachusetts pursuant to Massachusetts General Laws chapter 255F, section 2.
- Linda DeFeo is licensed by the Commissioner as a mortgage loan originator under Massachusetts General Laws chapter 255F, section 2. According to records maintained on file with the Division, the Commissioner initially issued a mortgage loan originator license, license number MLO44853 to Linda DeFeo to engage in the business of a mortgage loan originator on or about October 31, 2008.
- On December 21, 2009, a Grand Jury, impaneled in the Suffolk County Superior Court, Suffolk County, Massachusetts, returned an indictment against Linda DeFeo charging her with seventeen criminal counts including: ten counts of Larceny over $250; six counts of Making a False or Exaggerated Statement; and one count of Attempted Larceny over $250.
- According to the December 22, 2009 press release issued by the Office of the Attorney General of Massachusetts, Linda DeFeo was indicted on December 21, 2009 for her role in a mortgage fraud scheme pursuant to which fraudulent documents were used to defraud homeowners and financial lending institutions in real estate transactions involving distressed properties in the Greater Boston area. The Attorney General's investigators allege, among other things, that Linda DeFeo conspired with real estate investors to submit mortgage loan applications to financial lending institutions with false information in order to secure 100% financing for the borrowers. In addition, investigators allege that the real estate investors were able to submit inflated property appraisals and false purchase and sale agreements to the financial lending institutions through Linda DeFeo. Linda DeFeo is alleged to have known that such documentation was false when she submitted the information to the financial lending institutions.
- Massachusetts General Laws chapter 255F, section 4(a)(iii) states, in part:
The commissioner shall issue a mortgage loan originator license to an applicant therefore unless the applicant: (iii) has failed to demonstrate financial responsibility, character, reputation, integrity and general fitness such as to command the confidence of the community and to warrant a determination that such applicant will operate honestly, fairly, soundly and efficiently in the public interest, consistent with the purposes of this chapter
- Massachusetts General Laws chapter 255F, section 11(a) states, in part:
The commissioner may for the administration and enforcement of this chapter, pursuant to chapter 30A: (ii) deny, suspend, revoke, condition or decline to renew a license if a . . . licensee fails at any time to meet the requirements of section 4 . . . (vii) enter immediate temporary orders to cease business under a license if the commissioner determines that . . . the licensee is currently in violation of this chapter.
CONCLUSIONS OF LAW
- Based upon the information contained in Paragraphs 1 through 6, Linda DeFeo has failed to demonstrate and maintain the character, reputation, integrity, and general fitness such as to command the confidence of the community and to warrant a determination that she will operate honestly, fairly, soundly and efficiently in the public interest, in violation of Massachusetts General Laws chapter 255F, section 4 and the Division's regulation 209 CMR 41.04(2)(d).
- Based upon the information contained in Paragraphs 1 through 6, the Commissioner has determined that:
(a) Linda DeFeo has engaged in, is engaging in, or is about to engage in, acts or practices which warrant the belief that it is not operating honestly, fairly, soundly and efficiently in the public interest in violation of standards governing the licensing and conduct of a mortgage loan originator including, but not limited to, the provisions of the Division's regulations at 209 CMR 41.00 et seq.; and
(b) The public interest will be irreparably harmed by delay in issuing an ORDER TO CEASE AND DESIST to Linda DeFeo.
- Based upon the information contained in Paragraphs 1 through 6, had the facts and conditions found therein existed at the time of Linda DeFeo's original mortgage loan originator license application, the Commissioner would have been warranted in refusing to issue such license. Further, the facts and conditions set forth in Paragraphs 1 through 6 present sufficient grounds for the revocation of Linda DeFeo's mortgage loan originator license pursuant to Massachusetts General Laws chapter 255F, section 11.
ORDER TO CEASE AND DESIST
- After taking into consideration the FINDINGS OF FACT and CONCLUSIONS OF LAW stated herein, it is hereby:
- ORDERED that Linda DeFeo shall immediately cease engaging in the activities of a mortgage loan originator, as those activities are defined under Massachusetts General Laws chapter 255F, section 1, relative to any residential property in Massachusetts. Therefore, Linda DeFeo is ordered to immediately cease soliciting, accepting, or further originating, either directly or indirectly, any residential mortgage loan applications from consumers for residential property located in Massachusetts.
- IT IS FURTHER ORDERED that Linda DeFeo shall submit to the Division a detailed record, prepared as of the date of submission, of all pending residential mortgage loan applications which she has originated on property located in Massachusetts. The records to be produced shall be submitted to the Commissioner within five (5) days of the effective date of this Temporary Order and shall include all information on file, regarding her open application list, including but not necessarily limited to, the following:
All information on file as of the date of submission regarding Linda DeFeo's open application list as a mortgage loan originator, including but not limited to, the following: The names of all individuals for whom Linda DeFeo originated an application for a residential mortgage loan; the applicants' addresses and telephone numbers; the amount of all prepaid loan fees submitted by the customer; the amount of each loan; application status (i.e. filed, submitted to lenders, cleared to close, etc.); scheduled closing dates; rate lock status; and a list identifying the applicable broker or lender with whom the applicants' application was placed.
- IT IS FURTHER ORDERED that this Temporary Order shall become effective immediately and shall remain in effect unless set aside, limited, or suspended by the Commissioner or upon court order after review under Massachusetts General Laws chapter 30A.
- IT IS FURTHER ORDERED that this Temporary Order shall not be construed as approving any act, practice, or conduct not specifically set forth herein which was, is, or may be in violation of relevant state or federal laws and regulations.
- IT IS FURTHER ORDERED that a hearing will be scheduled on this matter to determine whether or not such Temporary Order shall become permanent and final only upon receipt of a written request for such a hearing from Linda DeFeo within twenty (20) days of the effective date of this Temporary Order. If no hearing is requested within this twenty (20) day period, this Temporary Order shall become permanent and final until it is modified or vacated by the Commissioner.
BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.
Dated at Boston, Massachusetts, this 23rd day of December, 2009
By: Steven L. Antonakes
Commissioner of Banks
Commonwealth of Massachusetts