7 mortgage brokers shut down by state (Massachusetts)

[deadparrot]

The state yesterday shut down seven mortgage brokers in Massachusetts and banned a variety of deceptive lending practices in what regulators called a sweeping crackdown on rogue brokers who steer customers in poor urban neighborhoods to loans they cannot afford.

Acting two weeks after the Globe reported a range of abuses by several mortgage brokers in Lawrence, the Division of Banks announced that 50 examiners had since made surprise inspections of 90 brokerage firms in central and eastern Massachusetts.

After finishing about a third of the examinations, regulators closed four licensed brokers and three unlicensed shops. The licensed brokers had inflated assets of borrowers so they could qualify for loans, said Commissioner of Banks Steven L. Antonakes . The brokers must win appeals to stay in business. The other operations were shut down because they did not have state licenses; they would have to obtain licenses to operate.

Regulators have also gathered evidence of other abuses in the industry, including brokers discouraging homebuyers from hiring lawyers to scrutinize mortgage documents and persuading borrowers to sign blank loan applications. As a result, the division has adopted emergency, and permanent, regulations banning fraudulent practices, particularly scams that target poor consumers with limited English skills.

http://www.boston.com/news/local/massachusetts/articles/2006/09/09/7_mortgage_brokers_shut_down_by_state/

[bleedingheart]

1. I don't see anything in the articles stating that victims will get money

back..or that they will help those who were swindled.

I think to a great degree, it would help to have local community groups hold seminars on how to watch out for this kind of deception.

[Donnachaidh]

2. GOOD News!

Now when are they going to go after the finance companies for cars?

[LiberalEsto]

3. This is how government SHOULD act

To protect citizens.

Something we've seen less and less of since 2001.

[stepnw1f]

4. WOW.... Was Tom Reilly Behind This? Anyone?

This quote is very interesting, "the tip of the iceberg."

[TaleWgnDg]

7. Alleged banking fraud and Tom Reilly . . .

"Attorney General Thomas F. Reilly praised the banking division's action, and said his office filed lawsuits last week against brokers in Arlington and Dorchester. 'We will continue our efforts to address this egregious conduct,'(said) Reilly."
(last few sentences in this Boston Globe article,
http://www.boston.com/news/local/massachusetts/articles/2006/09/09/7_mortgage_brokers_shut_down_by_state/?page=full )

And, to directly answer your question, the Division of Banks, Massachusetts is u/ Romney's executive branch and, as such, is an administrative agency u/ the Governor. Tom Reilly does not head this agency. However, the Division of Banks may refer facts and circumstances of events to Reilly's office to have Reilly's office determine if criminal (court) action or civil (court) action be taken against an alleged perpetrator in the banking industry. The same is true of any other administrative agency head who believes circumstances may rise to involve Reilly's office. On the other hand, if the law in Massachusetts authorizes the head of a particular administrative agency to file a civil complaint in civil court, then it may do so. But not criminal complaints. All of that being said, Reilly may start his own investigation w/o referrals from other Massachusetts administrative agencies. But this is less common due to many reasons -- mostly manpower and cost.

Now that you are totally confused . . .

Here's an example of what Reilly is authorized to do (and has done recently) u/ Massachusetts law against some alleged banking/financial fraud perps:
http://www.ago.state.ma.us/sp.cfm?pageid=986&id=1713

.

[matcom]

5. as one who works for a MA Broker (albeit in IT) this is WONDERFUL!

we got word of this last friday. we are a broker shop (i'm happy to say 100% in compliance AND HONEST) and we called a meeting of all 3 offices this morning to re-EMPHASIZE that NONE of our files will EVER be below board.

[Robbien]

6. Seven out of thirty were bad. That means is is likely there are 14 more

out there in the sixty shops they did not examine.