Mortgage regulators in Massachusetts have issued cease-and-desist orders against four reverse mortgage companies. Among the charges were mortgage fraud, deceptive advertising and failure to comply with reverse lending requirements.
The orders were issued by the state’s Division of Banks, a statement said today.
Three lenders — First Call Mortgage Company Inc., Sun West Mortgage Company Inc. and Gold Reverse Inc. — were cited for not submitting a reverse mortgage program to the Commissioner of Banks for review and approval prior to offering such a program, as required by M.G.L. c.183, Section 67 and M.G.L. c. 167E, Section 7.
Even banks and credit unions that are exempt from licensing are required to submit a lending plan for making home-equity conversion mortgages.
In addition, First Call was cited for committing mortgage fraud on files submitted to wholesale lenders. In one case, an application stated a borrower made $138,000 annually, even though the state was able to read a blacked-out form in the loan file that indicated annual income of just $57,270.
“All three companies have been prohibited from accepting any new mortgage applications and have been ordered to place all pending applications with a qualified lender at no cost to the consumer.” the state said in its announcement. “In addition, the companies were ordered to provide the division complete copies of files for all reverse mortgage loans.”
A cease-and-desist order was also issued against American Advisors Group. The mortgage broker was accused of unfair and deceptive advertising practices involving reverse mortgage products.
American Advisors allegedly marketed reverse mortgages as government benefits in a direct mail campaign.
“The division’s order forbids American Advisors Group from initiating any new mortgage loan transactions and requires pending applications to be placed with a qualified lender or broker at no cost to the consumer,” the state said. “In addition, the company has been ordered to cease its advertising in Massachusetts and provide the division with a complete list of all individuals that its direct mail advertisements were sent to.”
In the Matter of First Call Mortgage Company, Inc, Andover, MA, Mortgage Company License No(s). MC3198 et al
Docket No. 2008-020, COMMISSIONER OF BANKS MORTGAGE LENDER AND MORTGAGE BROKER LICENSING, COMMONWEALTH OF MASSACHUSETTS
In the Matter of Gold Reverse, Inc. f/k/a Pacific Community Mortgage, Inc., Anaheim, CA, Mortgage Company License No. MC4718 et al
Docket No. 2008-023, COMMISSIONER OF BANKS MORTGAGE LENDER AND MORTGAGE BROKER LICENSING, COMMONWEALTH OF MASSACHUSETTS
In the Matter of Sun West Mortgage Company, Inc., Cerritos, CA, Mortgage Lender License No. ML3212
Docket No. 2008-021, COMMISSIONER OF BANKS MORTGAGE LENDER LICENSING, COMMONWEALTH OF MASSACHUSETTS
In the Matter of American Advisors Group, Irvine, CA, Mortgage Lender License No. MB5106
Docket No. 2008-022, COMMISSIONER OF BANKS MORTGAGE BROKER LICENSING, COMMONWEALTH OF MASSACHUSETTS