Temporary Order to Cease and Desist  Stephen A. Becker - Temporary Order to Cease and Desist and Notice of Civil Assessment

Date:	09/17/2015
Organization:	Division of Banks
Docket Number:	2015-012
Location:	Reading, MA

Stephen A. Becker, Reading, MA - Temporary Order to Cease and Desist and Notice of Civil Assessment

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE LOAN
ORIGINATOR LICENSING
Docket No. 2015-012

TEMPORARY ORDER
TO CEASE AND DESIST
AND NOTICE OF
CIVIL ASSESSMENT

In the Matter of

STEPHEN A. BECKER
Reading, Massachusetts

Mortgage Loan Originator License No: MLO9975

The Commissioner of Banks (“Commissioner”) having determined that STEPHEN A. BECKER (“Steve Becker”) located at 112 Johnson Woods Dr. #203 Reading, Massachusetts 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 TEMPORARY ORDER TO CEASE AND DESIST AND NOTICE OF CIVIL ASSESSMENT (“Order”) pursuant to General Laws chapter 255F, section 11.

A. FINDINGS OF FACT

1. The Division of Banks (“Division”), through the Commissioner, has jurisdiction over the licensing and regulation of persons and entities engaged in the business of a mortgage loan originator in Massachusetts pursuant to Massachusetts General Laws chapter 255F, section 2.
2. The Division, through the Commissioner, also has jurisdiction over the licensing and regulation of persons and entities engaged in the business of a mortgage broker in Massachusetts pursuant to Massachusetts General Laws chapter 255E, section 2 and its implementing regulation at 209 CMR 42.00 et seq.
3. Steve Becker 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, and the Nationwide Multi-State Licensing System and Registry (NMLS) the Commissioner initially issued a mortgage loan originator license, license number, MLO9975, to Steve Becker to engage in the business of a mortgage loan originator on or about May 16, 2008.
4. According to records maintained on file with the Division, and the NMLS, Steve Becker was employed as a mortgage loan originator by Direct Finance Corporation since January 24, 2013(Direct Finance or the Corporation).   
5. Direct Finance is currently licensed as a mortgage broker under Massachusetts General Laws chapter 255E, section 2 with license number MB1535.  According to records maintained on file with the Division and the NMLS, the Commissioner initially issued a mortgage broker license to the Corporation on or about December 16, 1997.  
6. On or about August 17, 2015 the Division was forwarded a copy of a solicitation received by a Massachusetts consumer from Steve Becker.  A copy of the Solicitation is attached as Exhibit 1.

   i. Misleading and Deceptive Advertising Practices

7. Massachusetts General Laws chapter 93A, section 2(a) states:

   Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.

8. The Attorney General’s regulation 940 CMR 8.04(1) states:

   It is an unfair or deceptive act or practice for a mortgage broker or lender to make any representation or statement of fact in an advertisement if the representation or statement is false or misleading or has the tendency or capacity to be misleading, or if the mortgage broker or lender does not have sufficient information upon which a reasonable belief in the truth of the representation or statement could be based.  Such claims or representations include, but are not limited to the availability, terms, conditions, or charges, incident to the mortgage transaction and the possibility of refinancing. 

9. The Division’s Regulation 209 CMR 41.10(1) states:

   It is a prohibited act or practice for a Mortgage Loan Originator to engage in conduct prohibited under 209 CMR 42.12A.

10. The Division’s Regulation 209 CMR 41.10(9) states:

    It is a prohibited act or practice for a Mortgage Loan Originator to engage in any unfair or deceptive practice toward any person.

11. The Division’s Regulation 209 CMR 42.12A(9) states:

    It is a prohibited act or practice for a mortgage broker or mortgage lender to make false promises to influence, persuade, or induce a consumer to a sign a mortgage loan application or mortgage loan documents.

    a. The “Become a Secret Angel” Solicitation

12. The Division’s review of the “Become a Secret Angel” solicitation (the “Solicitation) revealed that it was sent out by Steve Becker, Mortgage Loan Originator employed by Direct Finance.   The Solicitation included several statements which were misleading and deceptive and was geared towards individuals who knew of a senior citizen or retired couple with financial difficulties.
13. The body of the Solicitation offered consumers a “Lifestyle Improvement Loan” and included a statement informing the consumer that their largest asset was their home, and they should use it to their advantage.  The Solicitation also indicated that a “Lifestyle Improvement Loan,” could never be negative as it is insured by Federal Housing Administration (FHA).     It is unclear how a “Lifestyle Improvement Loan” can never be negative and is insured by FHA.  The Division believes that Steve Becker, through Direct Finance, is offering a Reverse Mortgage loan product, and is misleading consumers by using the term “Lifestyle Improvement Loan” without identifying the terms and conditions associated with the Reverse Mortgage product.    Furthermore, FHA insures Reverse Mortgage products, not “Lifestyle Improvement Loans.”
14. The body of the Solicitation included six bullet points listing what a consumer could do with their money once they received a “Lifestyle Improvement Loan.”  Consumers could pay off existing credit card debt, pay off existing mortgage, eliminate future mortgage payments as long as they occupy the home regardless of how long they live there, help children or grandchildren with college or financial obligations, make needed home repairs or improvements, and travel.   
15. Based upon review of the Solicitation, the “Lifestyle Improvement Loan” product offered by Steve Becker, through Direct Finance, is a Reverse Mortgage.   At no point in the content of the Solicitation did Steve Becker use the term “Reverse Mortgage” or discuss the terms of a Reverse Mortgage.   Steve Becker is misleading senior citizens into entering into a “Lifestyle Improvement Loan” without full knowledge of the loan product such as eligibility requirements, the availability, terms, conditions, or charges. 

    b. The Lifestyle Improvement Loan Website

16. Included in the Solicitation was a website address, www.lifestyleimprovementloan.com (the “Website”), which upon information and belief was created and maintained by Steve Becker.   The Website contained further details about the “Lifestyle Improvement Loan” product offered by Steve Becker through Direct Finance.
17. Upon review of the Website, it was revealed that it contained twelve boxes that opened up additional pages with more information.  The boxes were: “Have your cake and Eat it too!; Investment, Vacation or New Home; Private Home Care; Rainy Day Fund; Seniorize Your Home; Helping Family & Gifting; Receive Additional Cash Flow; Estate & Investment Planning; Home Improvement; Remain Independent; Pay Off Credit Cards & Other Loans; and Pay off your Mortgage.”
18. The Division’s review of the “Have your Cake and Eat it too” webpage revealed that it contains inaccurate and misleading information regarding reverse mortgage loans, including but not limited to the following statements; “The cash you receive from a Lifestyle Improvement Loan comes with no strings attached. You may use the funds however you wish.”  The Website failed to identify that the product Steve Becker, through Direct Finance, was offering was a Reverse Mortgage, and the terms and conditions associated with a reverse mortgage, such as the consumer’s responsibility to pay all taxes and insurance on their home.  
19. Under the “Rainy Day,” tab, it states “One incredible feature of a Lifestyle Improvement Loan is a Line of Credit that gives you access to cash. Unlike a conventional home equity line of credit, a Lifestyle Improvement Loan’s unused portion will “grow”, guaranteed, for as long as you live in your home.” The Website, maintained by Steve Becker, fails to mention that the product they are offering is a Reverse Mortgage and the terms and conditions needed to obtain a Line of Credit.
20. Upon reviewing the “Home Improvement,” tab, the Website stated that “A HECM Lifestyle Improvement Loan could make your wish come true.”    The Home Equity Conversion Mortgage (HECM) program offered through FHA does not have a Lifestyle Improvement Loan product, what Steve Becker is referring to is a Reverse Mortgage.  Additionally, upon review of the Division’s records, a “HECM Lifestyle Improvement Loan” product has not been approved by the Division in accordance with General Laws 167E, section 7.
21. Additionally, under the “Pay off your credit card and other loans,” and “Paying off your mortgage” tabs, Steve Becker uses the term Reverse Mortgage and “Lifestyle Improvement Loan” interchangeably thereby misleading consumers about which product Steve Becker is referring to. 
22. On the left hand side of the Website, there are four links to information about Reverse Mortgages.   As the Website is offering a “Lifestyle Improvement Loan,” consumers could be misled into believing the product offered was not a reverse mortgage, and therefore not review the pertinent information.   Steve Becker’s use of the term “Lifestyle Improvement Loan” instead of Reverse Mortgage misleads consumers into believing there are two loan products offered.  Additionally the terms, conditions and costs associated with obtaining a “Lifestyle Improvement Loan” are not listed which would further mislead consumers into believing a “Lifestyle Improvement Loan” and a Reverse Mortgage are different loan products.   

    ii. Failure to Disclose License Type and Number

23. The Division’s Regulation 209 CMR 41.10(1) states:

    It is a prohibited act or practice for a Mortgage Loan Originator to engage in conduct prohibited under 209 CMR 42.12A.

24. The Division’s regulation 209 CMR 42.12A(13) states:

    It is a prohibited act or practice for a mortgage broker or mortgage lender to fail to disclose the type and number of its license in an advertisement.

25. The Division’s regulation 209 CMR 42.12A(14) states:

    It is a prohibited act or practice for a mortgage broker or mortgage lender for an employee or a person associated with and acting under the direction of a mortgage broker or a mortgage lender to advertise residential mortgage loan services without naming the licensee and disclosing the license number of the mortgage broker or mortgage lender under whose license the individual is acting.

26. The bottom of the Solicitation listed Steve Becker’s Mortgage Loan Originator license number and Direct Finance’s name and address, however did not include a reference to the type and license number held by Direct Finance.    

    B. CONCLUSIONS OF LAW

27. Based upon the information contained in Paragraphs 1 through 26, Steve Becker has failed to demonstrate and maintain the character, reputation, integrity, and general fitness that would warrant the belief that the business of a mortgage loan originator will be operated honestly, fairly, and soundly in the public interest in violation of Massachusetts General Laws chapter 255F, section 4(a)(iii) and the Division's regulations 209 CMR 41.05(3)(a)(3).
28. Based upon the information contained in Paragraphs 1 through 26, by distributing to Massachusetts consumers a Solicitation and maintaining a Website that contained false or misleading language or language that had the tendency to be false or misleading, including language that could lead the reader to believe they were not signing up for a reverse mortgage product, Steve Becker has violated Massachusetts General Laws chapter 93A, section 2(a), the Office of the Attorney General's implementing regulation 940 CMR 8.04(1), and the Division’s Regulation 209 CMR 42.10(9)
29. Based upon the information contained in Paragraphs 1 through 26, by distributing to Massachusetts consumers a Solicitation and by maintaining a Website where the loan product information could falsely influence, persuade or induce a consumer to enter into a reverse mortgage loan application, Steve Becker has violated the Division’s Regulations 209 CMR 41.10(1) and 209 209 CMR 42.12A(9).
30. Based upon the information contained in Paragraphs 1 through 26, by not listing Direct Finance’s mortgage broker license number on the Solicitation, Steve Becker is in violation of the Division’s regulation 209 CMR 41.10(1), 209 CMR 42.12A(13) and 209 CMR 42.12A(14).
31. Based upon the information contained in Paragraphs 1 through 26,  the Commissioner has determined that:

    Steve Becker has engaged in, is engaging in, or is about to engage in, acts or practices which warrant the belief that the public interest will be irreparably harmed by delay in issuing an ORDER TO CEASE AND DESIST to Steve Becker.

    C. ORDER TO CEASE AND DESIST AND NOTICE OF CIVIL ASSESSMENT

32. After taking into consideration the FINDINGS OF FACT and CONCLUSIONS OF LAW stated herein, it is hereby:
33. ORDERED that Steve Becker shall cease distributing the Solicitation identified as Exhibit 1 and any Solicitation to Massachusetts consumers that contains any representations or statements that could be considered false, misleading, or have the tendency or capacity to be misleading including but not limited to:
    1. Solicitations containing false or misleading language or language that had the tendency to be false or misleading;
    2. Solicitations that have the tendency to make false promises to influence persuade or induce a consumer to sign a mortgage loan application without knowing the type of loan product and terms and conditions associated with the loan product. 
34. ORDERED that Steve Becker shall cease operation of www.lifestyleimprovementloan.com and any website to Massachusetts consumers that contain any representations or statements that could be considered false, misleading or have the tendency or capacity to be misleading including but not limited to:
    1. Websites containing false or misleading language or language that has the tendency to be false or misleading;
    2. Websites that have the tendency to make false promises to influence persuade or induce a consumer to sign a mortgage loan application without knowing the type of loan product and terms and conditions associated with the loan product.
35. IT IS FURTHER ORDERED that within five (5) days of the effective date of this Order, Steve Becker shall submit to the Commissioner a detailed record, prepared as of the date of submission, of all Massachusetts consumers to whom Steve Becker distributed the Solicitation.  The records to be produced shall include the consumers' names and addresses.
36. IT IS FURTHER ORDERED that within twenty (20) days of the effective date of this Order, Steve Becker shall submit a payment of ten thousand dollars ($10,000.00), in satisfaction of a civil assessment collected in consideration of Steve Becker’s engaging in deceptive and prohibited advertising.  Such civil assessment is imposed pursuant to Massachusetts General Laws chapter 255F, section 11.  Steve Becker shall remit payment pursuant to this Paragraph of the Order for the amounts due, payable to the “Commonwealth of Massachusetts Division of Banks Mortgage Loan Settlement Trust” to the Office of the Commissioner of Banks, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118-6400. 
37. The civil assessment imposed on Steve Becker is subject to review as provided in Massachusetts General Laws chapter 30A.  Accordingly, Steve Becker may request a hearing to contest said civil assessment.  Such request for a hearing must be filed in writing within 20 days of Steve Becker’s receipt of this Order.  If Steve Becker fails to request a hearing within the prescribed time frame pursuant to this Paragraph, the aforementioned civil assessment shall be deemed final and binding and shall be due and owing to the Commonwealth.
38. IT IS FURTHER ORDERED that a hearing will be scheduled on this matter to determine whether or not such Order shall become permanent and final only upon receipt of a written request for such a hearing from Steve Becker within twenty (20) days of the effective date of this Order.  If no hearing is requested within this twenty (20) day period, this Order shall become permanent and final until it is modified or vacated by the Commissioner.
39. IT IS FURTHER ORDERED that this 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.
40. IT IS FURTHER ORDERED that a copy of each advertisement used by Steve Becker shall be retained in the Corporation's books and records and shall be made available to the Division at its examinations/inspections of Direct Finance.

    D. GENERAL PROVISIONS

41. Steve Becker shall revise its advertising practices and procedures to ensure that all solicitations, websites and advertising materials used by Steve Becker do not contain any representations or statements that could be considered false, misleading, or have the tendency or capacity to be misleading.
42. Steve Becker shall take all necessary steps to ensure that the Solicitation or any similar solicitation are not published or distributed to consumers in Massachusetts.
43. Steve Becker shall take all necessary steps to ensure that the operation of the Website or any similar website has ceased.  

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 17th day of September, 2015

By: David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts

THIS CEASE AND DESIST ORDER WAS TERMINATED PURSUANT TO A CONSENT ORDER DATED AUGUST 16, 2016, DOCKET #2015-012-MLO.