Blog Enforcement Watch March 12, 2015

Mortgage Lender Agrees to Fees and Injunctive Relief in Settlement Following State Examination on Reverse Mortgage Lending

On March 12, 2015, the Massachusetts Division of Banks entered into a consent order with a mortgage lender following a state investigation that determined that the mortgage lender was in substantial non-compliance with applicable state and federal statutes, rules, and regulations regarding its mortgage lending and determination and documentation of borrowers’ interest rates when refinancing. Under the consent order, the mortgage lender agreed to pay a penalty of $62,500. The mortgage lender also agreed to establish procedures that would ensure that the company (1) would not make or offer any reverse mortgage loans unless the mortgage lender obtained prior approval of the reverse mortgage program from the Division of Banks; and (2) is in compliance with the Division’s regulations regarding determination and documentation of a borrower’s interest when refinancing a home loan that was completed within 60 months prior to the company’s receipt of an application for a new home loan. The company also was required to address all matters requiring attention within the report by specified deadlines and supply written progress reports.