twitter linkedin
facebook google+

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from

Mortgage News Reprints
Put entire stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed stories free on your Web site or for your RSS reader.

News Archives
Archive of stories by month going back to 1999.

Press Releases
Reports and announcements from

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News


Mortgage News

HOT Topics









site map
The Mortgage Graveyard
Failed, closed and a c q u i r e d mortgage-related entities.

State Shuts Down Branch Operation

Mass. bank commissioner issues cease and desist to New England Merchants

October 26, 2007


Massachusetts regulators have ordered a branch operation to shut down because it committed mortgage fraud and continued to employ unlicensed originators even after previously being ordered not to do so.

The state's Commissioner of Banks has issued a temporary order to cease and desist against New England Merchants Corp.

The Arlington Heights-based company, which was licensed as a lender in 1992 and as a mortgage broker in 1997, maintains a total of 20 licenses, according to a copy of the order.

On its now defunct Web site, the company claimed to be "one of the fastest growing mortgage brokerages in New England." Subprime, Alt-A and home equity programs were listed among its offerings.

"We are growing with a simple philosophy of paying our LO's the highest payouts in the business," the Web site stated. "We have no tiered compensation plans, just a flat rate of pay with a one time production goals to move up in compensation."

Following a 2002 examination, New England entered into a consent order with the regulator that required it not to operate from any unlicensed locations. But an examination earlier this year determined that the unlicensed activity continued.

"Beginning on a date that is unknown to the division and continuing at least until the date of the 2007 examination/inspection, New England Merchants conducted its mortgage broker business at six office locations ... for which New England Merchants failed to provide prior notice to the commissioner, submit a license application, or receive approval from the commissioner to engage in the mortgage broker business from such locations," the regulator said.

The unlicensed locations were in Methuen, Mass.; Hampden, Mass.; Braintree, Mass.; Salem, N.H.; East Windsor, Conn.; and Enfield, Conn., according to the order. In addition, although a license application had been submitted for a West Springfield, Mass., branch, New England began operating the branch before the license was approved and issued.

"New England Merchants has unlawfully engaged in the business of a mortgage broker through a network of locations and individuals operating without a license from the commissioner in violation of Massachusetts General Laws," the latest order said.

As a result of the licensing issues, the company was found to have paid illegal referral fees to the unlicensed individuals.

New England was delinquent in filing approximately 103 Statements of Accountability and Exemption Affidavits, in violation of its order, the state said. It also failed to disclose on the Attorney General's Mortgage Broker Disclosure Form -- which it illegally modified -- points and fees it charged; did not state the dollar amount of yield spread premiums on Good Faith Estimates; and regularly understated fees.

The state noted that disclosures which were required to be sent directly from the wholesale lender were actually sent by New England.

New England was also accused of mortgage fraud on three closed transactions where it inflated income on the applications. On one package, $2,200 monthly income was stated on an original application while a final application indicated $5,890 in monthly income. The company told regulators the second application reflected income from the borrower's fiance -- which the wholesale lender's account executive reportedly suggested.

Another loan saw monthly income jump from $3,750 on the original application to $8,500, which was explained as the inadvertent addition of the borrower's mother's income. A third loan cited by the commissioner reportedly reflected $90,200 in annual income on the initial 1003 and $155,520 on the final application -- a jump that New England said was the result of additional outside income.

The broker was also cited for charging an underwriting fee -- although it didn't underwrite the loans, and not keeping required paper copies of some files. Additionally, a required suitability explanation from the broker was missing.

The company's compliance officer reportedly admitted that required disclosures were backdated to appear to have been sent within the required period.

New England allegedly advertised a 1 percent interest rate without disclosing an annual percentage rate or whether it was a broker or lender. It also failed to list its license number on its Web sites.

"New England Merchants, its officers, directors, employees, and their successors or assigns, shall immediately cease engaging in the activities of a mortgage broker and mortgage lender," the commissioner ordered. "It is further ordered that New England Merchants shall transfer its entire open application list of all pending applications relating to Massachusetts residential property to one or more qualified broker(s) or lender(s)."

While the temporary order calls for a subsequent review to determine whether it should be made permanent, an employee at the company's Agawam, Mass., branch indicated it has already shut down its operations in the state and that branch is no longer affiliated with it.

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of

e-mail: [email protected]

Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.

Mortgage Branch News | Net Branch | Mortgage Branch Directory
Coverage of new and existing net branch operations. Programs, payouts and other details. Profiles of brokers and net branch lawsuits.

Mortgage License News | State Agencies | NMLS Registration Statistics
Mortgage lending licenses and news about license issues by state. Mortgage broker licensing, license revocations and legislation.

Mortgage Fraud News | Fraud Statistics | Fraud Index | Fraud Blog
Mortgage broker, originator and banker criminal cases. Real estate flipping and appraisal fraud. Mortgage fraud prevention, studies and analysis.

Logout forgot

Mortgage Fraud Statistics
Government and private data on volume of mortgage fraud activity.

Mortgage Fraud Index
Dollar and index amount by quarter and state.

Mortgage Fraud Litigation
Lawsuits and settlements invoving mortgage fraud by a lender insider. From 2007 through first-quarter 2013

Mortgage Fraud News
News stories about fraud committed against home lenders.

Mortgage Fraud Blog
Actions in mortgage fraud criminal and civil cases.

local mortgage fraud

mortgage fraud links

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders