Massachusetts Division of Banks Fines Unapproved Reverse Mortgage Lender

Massachusetts Division of Banks

On July 12, 2017, the Massachusetts Commissioner of Banks entered a consent order​ with a mortgage broker and lender to resolve allegations that the lender made reverse mortgage loans without  proper approval from the Commonwealth.  The consent order follows a compliance examination conducted of the lender in November 2016, which found that the lender was not compliant with applicable Massachusetts and federal statutes, rules, and regulations governing the conduct and licensing of those engaged in the business of a mortgage broker and  mortgage lender.

​The consent order sets out that the lender must cease making reverse mortgage loans in Massachusetts unless and until it obtains the Division’s approval; submit a payment of $15,000 for its failure to obtain approval of reverse mortgage programs prior to offering them to consumers; and shall establish, implement, and maintain appropriate policies and procedures for the monitoring and oversight of its settlement agents and/or closing attorneys to ensure that no duplicate discharge/release recording fees are collected from Massachusetts borrowers.  Further, the lender must reimburse $226 to the borrowers that paid duplicate discharge/release fees.
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