Massachusetts DOB Enters Consent Order With Company for Unlicensed Mortgage Lending and Illegal Fees

On May 11, 2017, the Massachusetts Division of Banks (DOB) entered into a consent order with a Massachusetts residential mortgage lending company, alleging that, between January 2013 and December 2016, the company engaged in unlicensed residential mortgage lending and charged fees in violation of Massachusetts law, and failed to comply with the Real Estate Settlement Procedures Act (RESPA).

Per the consent order, the mortgage company must pay a $20,000 administrative penalty to the DOB, and must reimburse all Massachusetts consumers who paid any late fees in excess of the amount permitted under Massachusetts law or who were assessed a prepayment penalty after their loan was closed due to a foreclosure.  The consent order also prohibits the company from assessing late fees before a payment is 15 days late, assessing prepayment penalties for consumers whose loans are closed due to a foreclosure, or assessing any interest or fees in excess of the amounts permitted under Massachusetts law.  Moreover, the company’s employees may not operate as mortgage loan originators until the designated company employee receives the appropriate license from the DOB.

The consent order also requires the mortgage company to implement and maintain policies to ensure that it complies with all of the requirements set forth in applicable state and federal laws, and to ensure that it provides annual escrow account disclosure statements to existing residential mortgage loan borrowers.