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IN THE MATTER OF: RESIDENTIAL MORTGAGE ("Residential Mortgage Services") |
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CONSENT ORDER |
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Part I of Chapter 668, Sections 36a-485 to 36a-534b, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators”;
WHEREAS, Residential Mortgage Services is a corporation organized under the laws of Maine and which is licensed as a mortgage lender under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, with its main office located at 24 Christopher Toppi Drive, South Portland, Maine;
WHEREAS, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, conducted an examination pursuant to Sections 36a-l7 and 36a-498f of the Connecticut General Statutes into the activities of Residential Mortgage Services to determine if it had violated, was violating or was about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner;
WHEREAS, as a result of the Division’s examination, the Commissioner alleges that Residential Mortgage Services failed to maintain adequate records of each residential mortgage loan transaction at the office named in its license, specifically in reference to Residential Mortgage Services’ marketing service agreements (“MSAs”), in violation of Section 36a-493 of the Connecticut General Statutes;
WHEREAS, Residential Mortgage Services represents to the Commissioner that it self-identified the potential for violations of law related to its MSAs, took a series of steps to bolster compliance of these agreements and ultimately terminated the MSA program on its own accord prior to the Division’s examination;
WHEREAS, Residential Mortgage Services represents to the Commissioner that it currently has more comprehensive internal controls in place to mitigate potential compliance risks, and has terminated all MSAs;
WHEREAS, the Commissioner alleges that Residential Mortgage Services neglected to maintain adequate records with respect to MSAs at the office named in its license, although it was responsive and timely responded to the Commissioner’s requests for information;
WHEREAS, the Commissioner alleges that Residential Mortgage Services’ internal protocols for retention of MSA-related records were insufficient during the period covered by the Division’s examination;
WHEREAS, as a result of the foregoing, the Commissioner was unable to access, receive and use books, accounts, records, files, documents, information or evidence and other documents, information or evidence the Commissioner deemed relevant to the examination, in violation of Section 36a-498f(a)(l)(C) of the Connecticut General Statutes;
WHEREAS, the Commissioner alleges that Residential Mortgage Services, by failing to maintain adequate records of its MSAs, was incapable of providing copies or computer printouts of records when so requested during an examination, in violation of Section 36a-17(d) of the Connecticut General Statutes;
WHEREAS, the Commissioner believes that such allegations would support the initiation of enforcement proceedings against Residential Mortgage Services, including, without limitation, proceedings to issue a cease and desist order against Residential Mortgage Services pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty of up to one hundred thousand dollars ($100,000) per violation upon Residential Mortgage Services pursuant to Sections 36a-494(a) and 36a-50(a) of the Connecticut General Statutes;
WHEREAS, initiation of such enforcement proceedings would constitute a “contested case” within the meaning of Section 4-166(4) of the Connecticut General Statutes;
WHEREAS, Section 4-177(c) of the Connecticut General Statutes and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by consent order, unless precluded by law;
WHEREAS, both the Commissioner and Residential Mortgage Services acknowledge the possible consequences of formal administrative proceedings, and Residential Mortgage Services voluntarily agrees to consent to the entry of the sanctions imposed below solely for the purpose of obviating the need for formal administrative proceedings concerning the allegations set forth herein;
WHEREAS, the Commissioner and Residential Mortgage Services now desire to resolve the matters set forth herein;
WHEREAS, Residential Mortgage Services acknowledges that this Consent Order is a public record and is a reportable event for purposes of the regulatory disclosure questions on the Nationwide Multistate Licensing System and Registry (“NMLS”), as applicable;
WHEREAS, Residential Mortgage Services specifically assures the Commissioner that the violations alleged herein shall not occur in the future;
AND WHEREAS, Residential Mortgage Services, through its execution of this Consent Order, voluntarily agrees to waive its procedural rights, including a right to a notice and an opportunity for a hearing as it pertains to the allegations set forth herein, and voluntarily waives its right to seek judicial review or otherwise challenge or contest the validity of this Consent Order.
CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Residential Mortgage Services, through its execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanctions:
| 1. | No later than the date this Consent Order is executed by Residential Mortgage Services, it shall remit to the Department of Banking by wire transfer, cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of Twenty-Five Thousand Dollars ($25,000) as a civil penalty; |
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No later than sixty (60) days after this Consent Order is issued by the Commissioner, Residential Mortgage Services shall submit to the Commissioner for review and approval of formal policies, procedures and programs that are specifically designed to ensure compliance with 12 U.S.C. § 2607 and its implementing regulation codified at 12 C.F.R. § 1024.14 (“Compliance Program”). The Commissioner shall have the discretion to make a determination of non-objection to the Compliance Program or direct Residential Mortgage Services to make revisions thereto. If the Commissioner directs Residential Mortgage Services to revise the Compliance Program, Residential Mortgage Services shall make the revisions and resubmit the Compliance Program to the Commissioner within thirty (30) days of such direction. After receiving notification that the Commissioner has made a determination of non-objection to the Compliance Program, Residential Mortgage Services must implement and adhere to the steps, recommendations, deadlines and timeframes outlined in the Compliance Program. |
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Residential Mortgage Services shall not violate Sections 36a-493, 36a-498f(a)(l)(C), 36a-498f(b), 36a-498f(f) or 36a-17(d) of the Connecticut General Statutes in connection with any future examination or investigation of Residential Mortgage Services conducted by the Commissioner through the Division.
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CONSENT ORDER
NOW THEREFORE, the Commissioner enters the following:
| 1. | The sanctions set forth above be and are hereby entered; |
| 2. | Upon issuance of this Consent Order by the Commissioner, this matter will be resolved and the Commissioner will not take any future enforcement action against Residential Mortgage Services based upon the allegations contained herein; provided that issuance of this Consent Order is without prejudice to the right of the Commissioner to take enforcement action against Residential Mortgage Services based upon a violation of this Consent Order or the matters underlying its entry, if the Commissioner determines that compliance with the terms herein is not being observed or if any representation made by Residential Mortgage Services and reflected herein is subsequently discovered to be untrue. Nothing in this Consent Order shall be construed as limiting the Commissioner’s ability to take enforcement action against Residential Mortgage Services based upon: (a) evidence of which the Division was unaware on the date this Consent Order is issued by the Commissioner relating to a violation of Part I of Chapter 668, Sections 36a-485 to 36a-534b, inclusive, of the Connecticut General Statutes or any statute or regulation under the jurisdiction of the Commissioner, or (b) evidence indicating that Residential Mortgage Services withheld information from or made any misstatement or omission to the Commissioner in connection with this matter; |
| 3. | Subject to the foregoing, upon issuance of this Consent Order by the Commissioner, and so long as this Consent Order is promptly disclosed by Residential Mortgage Services and its control persons on NMLS, as applicable, nothing in the issuance of this Consent Order shall adversely affect the ability of Residential Mortgage Services to apply for or obtain licenses or renewal licenses under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, provided all legal requirements for such license are satisfied and the terms of this Consent Order are being performed by Residential Mortgage Services; and |
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This Consent Order shall become final when issued.
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Issued at Hartford, Connecticut
this 15th day of August 2017. ______/s/__________
Jorge L. Perez
Banking Commissioner
I, James R. Seely, state on behalf of Residential Mortgage Services Inc. d/b/a Residential Mortgage Services, that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of Residential Mortgage Services Inc. d/b/a Residential Mortgage Services; that Residential Mortgage Services Inc. d/b/a Residential Mortgage Services, agrees freely and without threat or coercion of any kind to comply with the sanctions entered herein; and that Residential Mortgage Services Inc. d/b/a Residential Mortgage Services voluntarily agrees to enter into this Consent Order, expressly waiving the procedural rights set forth herein as to the matters described herein.
By: ________/s/___________
Name: James R. Seely
Title: President & CEO
Residential Mortgage Services Inc.
d/b/a Residential Mortgage Services
State of: Maine
County of: Cumberland
On this the 8th day of August 2017, before me, Tracy Yannelli, the undersigned officer, personally appeared James R. Seely who acknowledged himself/herself to be the President & CEO of Residential Mortgage Services Inc. d/b/a Residential Mortgage Services, a corporation, and that he/she as such President & CEO, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself/herself as President & CEO.
In witness whereof I hereunto set my hand.
__________/s/___________
Notary Public:
Date Commission Expires: 11/28/23