123 fix my loan, llc, financial regulation allegiant investments, llc

15 Pages·2013·0.23 MB·English

IN THE MATTER OF, BEFORE THE MARYLAND

COMMISSIONER OF

123 FIX. MY LOAN, LLC,
FINANCIAL REGULATION

ALLEGIANT INVESTMENTS, LLC,

MARK DANTE. PARKER, and
(Case No: CPR-FY2010-250

KEITH D. CALLAHAN,

Respondents,

AMEND

‘AL ORDER TO CEASE. AND DI

WHEREAS, the Commissioner of Fiancial Regutation (die “Canuissiones”)
conducted an investigation inte the credit services business activities of 123 Hix My Loan,
LLC (4123 Fix My Loan’), Allegiant Investments, LLC (“Allegiant Invesaments”), Mark
Daniel Packer, and Keith D. Caflthan, (collectively the “Respondents")'; and

‘WHEREAS, es result of el investigation, the Deputy Commissioner of Financial

Regulation (Ihe “Deputy Commissioner”) found evidence (9 suppor! that Respondents have
engagel in uous or practices conslituling a violation of a law, regulation, rele or onder over
‘hich the Commissianer has jurisdictioe, namely thar Respocdenus have violated various
provisions of the Annotated Cade of Maryland, Including Commercial Law Article C1"),

Tisde14, Subtilo 19, (de Maryland Credit Services Businesses Act, hereinafter “MCSBA"),

and Financial Institutions Aatile (“41”), lille 11, Subtitles 2 and 3; and

" aa per she Rescsson of Summary Onder to Cease and Desist a5 to Mare Rickard Castechini atached hereto
sc EXLIL A), Btae Rlchaed Castres tas been rsnoved as & span .aths case,
WHEREAS, the Depacy Commissioner issued a Summary Order to Cease and
Desist (the “Summary Order”) against Respondents or: February 25, 2041, after detemnining
that Reaponlents were in vilaion of the alorementiamed provisions of Maryland lew, and
that ic was in dhe public interest that Respondents cease and desis! Irom enguging in ert
services business activities with Maryland residents, homeowners. andor consumers

(hereinafter "Maryland consumers”), including directly or indirectly offering, eamlryetiny lo

provide, o otherwise engaging in, loan modification, lass mitigation, a similar services
select to rsiential eal property thorcnafce “oan modification services" ard

WHEREAS, the Suunmary Order notified Respondents of, among ofher things, the
following: (hac Respondents were cottlod to kesring before the Commissiones 10
determine whether the Summary Onder sould be vacated, modified, or entered 8 a final
order ofthe Commissioner; (ha he Summary Onler would be eared asa final onde i
Resporalents didnot msquestu ering within 15 days othe recip ofthe Summary Orde
and that as @ result of @ beating, or of Respondents? fiure 4 request 9 hearing, he
‘Commissioner may, in the Commissioner's disretion and in ation to (aking any other
acrion authorized by law. enter an onder making the Summary Oxler fina, issue penalty
cnders against Respondent, issue orders reqnising Respondents to pay restitution und other
money 10 consumers, #5 well a8 tice other actions related to Respondents’ business
actives; and

WHIERRAS, the Summary Order wis properly servo on Respondents via Fist

(Class ULS. Mell and Centtied U1, Mall: and
WHERTAS, Respondents fie o reques! a essing on the Suromary Order within
the fifteen (15) day pevio set font i I § 21532) and have nat fied a reqaest fora
sreatng as of the dst of his Final Order to Cease and Desist (this “ial Onder": ad

WHEREAS, the Commissioner bas based his deesion in tis Final Order on the
folowing dctaminations

[The MCSBA defines “credit services business” at CL ¥ 14-1901(@); shis

pvision provides, in par, xs Fallows:

(1) “Credit services busines” means any person who, with
respect ln the extensian ol eri by olhers vells, provides, oF
pperfocms, or represents that such persim cam or will sell
provide, or perform, any sf the following servives in retum for
the payment nf moaey br oer valuble eonsideration:

{Improving a consumer's oredit record, history. or
rating 0 estahl

Gi) Obtaining an extension of credit lary consumer; or

Gil) Providing advice or assistance to a consurner with
regard to either snbparngraph () or (il) of this paragraph,

Altionslly, CL §14-1901(0 defines “evension of credit as "he eight ta dele payment of
det ota incur det and defer is payment, offered o: granted primarily fr persona, iy,
or household purposes.”

2. The antiviies of persons engaged in the business of offering or providing
Joan modification services costamlly include abtuning ealensions of credit for consumer.

pamely obtaining forbearance or other deferrals of puyment an consumers" mortgage loans,

‘This includes any offeced services intended as part af ihe loan modification process, ot
hich are represented to consumers to be necessary for participating in w kan movificalion
program, Under certain cireumstances, loan modification services may involve improving a

consumer's stedil revond, history, oF ruling or establishing « new credit file oF record,
Therefore, unless otherwise cxermpt, pursuant to CH. §§ 14-190(6), F4-1908(0) and 14+
190408, persons engeged in the busincss of offeting oF providing resin loan
cniiciton yorvioes, which include offering or providing extensions of credit co
ensues, fll wer the salary definition of “ere serves businesses,” and ae cherehy
subject inthe licensing, investigator, enfereement nd penalty provisions ofthe NICSBA

3. “the following relevant and ersible evidenes, obtained punta 10 the
Commissioners invextigation, was considered jn the issounee of the Summary Onder:
Respontnts' stand documents for providing loan madiiation services for Maryland
consumers; eommunietions betvicen Kespondeats and the Commissioner; communications
Tetveen Respondems and Maryland consumers; satenents by Muylend consumers wlio
‘a entered int ian madiiestion agrsments with Respondents but for whom Respondents
Jailed 1 obtain or even uiltzmpt Wy aban a lean modification fr che eansemers and the

ommissioner’s licensing reuords. More particulary, all tines privr (» the issuance of the

Summary Order, the evidence adduved supporis the following findings:
2 Respondent 123 Fix My Tagen wits at gctive Massachusetts Untted

lisbility company with principal offices located in Sharon, Massachusetts. 123 Kix My Loan

‘engaged in businoss actvitics with Maryland conmumery involving Maryland residential real

inthe State of Maryland

sruperty altnough il was nat a registered business enc

b. —-Respondent Allogiant Lavestments was un active Massachusetts

Timiued Tability company with principal offices focated in North Faston, Massuchusots,

Allegiant Investinents engagell in business aclivtice with Maryland consumers invalving

the

Maryland residential weal property, although it way not a registered business carity

State of Maryland,
© Respondents Mark Danic] Parker and Keith D. Callahan engaged in
business activities involving Murylang consumers. Mark Daniel Parker and Keith D.

Callahan were die owners, directors, a(Tieers, managers, enaployces, nailer agents of 123

Fix My Loan andlor Allegiant Investment

Respondents advertised aad marketed to Maryland eunsumery that

Respancenls could obtain loan modifications for homeowners om their residential

rmorigages, Further, Respondents entred into agreements to provide lier madi
services, which included oblainnng extensions of cedit as defined hy the MCSBA, for
Maryland consumes om their esiental mortgage loos

Jn Apt 2009 Sema (coectively “consumer
‘A°) ented into toan vifcuton agreemont with Respondents. Consumer A paid
aparoioutely $2,600 in up-ront es to Respondents in exetange for which Respondents
cspnoseated that they would be able to obtain « Joan enodifestion for Consmce A

Although Respondents collected $1,600 in ap-thet (ees, Reapondents never obtained a foan

rocification for Consumer A. Further, Consumer A requested a refund of the up-troml fees,

‘whieh the Respondents, only after mumerous eequests, provided « fund

Te August 2008, SA 2c OEE (01sec ely

pnsunier B°) entered inl uloun modifisalion agrcement with Respondents. Consumer B

paid approximately $1,399 in up-front fies to Respondents in exchange (or sshich

Respoudents represented that they would he able to obtain a lean modification for Cons
B, Although Respouents collected $2,399 in up-Tronl fees, Revpondenls never vbtained a
lun modilicstion for Consumer B, Farther, Consumer It requested a refimnd of the up-front

ees, 10 Which The Respandemts have yel lo provide a rofmd
8. During ke course of te invesligation, on or uboul February 19,2010,
the Commissioner served sbgoenay on Respondents ontring them 10. produce al
locusts in ier contol ia any way related to der oan mosifiacon services provided t1
Maryland consumers, In response to the subposass, cweny-scven 27) consumer loan
rotation files were srpplied to the Commissione.

h. After « review of the loan modification Giles supplied by the
‘Respondents in response to the February 19" subpocna, the Commissioner's investigation
reveald in prt the flloning

(Tree there were entyseven (17) eerseumer loan
modification ies supple to the Commissionse. See “Exit CTR A” tiched hereto,

(i). ‘That twenty-seven 27) consumer loin miodieution Files
_rowided for ep-tont fees inte loan mndication services contests.

(ii, That the information gathered fom the twenty-seven (27)
consumet lan moiation ies has been tabulated i “Exhibit CPI. A” attached eet.

Gv). That at lose nine (9) adetional Maryland consumers paid up-
front fees to Respondents in exch for which Respondontsrepscsentd thet they would
be able te obwin « en modifsston for these eonsumers, however Respondents never
cblined 1 Join mulieation for these consumers, These conswners included

MEDAL (Consumer ©) paid $1,400 io up-tiont foxy:
$1,700 in up-ont es; QIN ¢-Consemer TE) paid $2,000 io up-iont tes,
QE (Consonce P) paid $5,000 in uptom fess Aaa
(Consumer @) paid $2,400 in up-ont fees AIAN Consincr H paid 1,00 in

ee ee |

(‘Consumer D”) paid
GRE ¢-coosuncr 2) paid 41,400 in op Font Fs ER
BRIAR cotlccrivets “Consumer K”) puid $998 in up-front Tees,

(That at east theee (3) additional Maryland consumers paid up-

Front fees 10 Respondents in exchange for which Respondents represenied thal they sould

be uble us oblain a Ioan modification for diese cousumers, however, whe Commissiar

investigation was unable to deretmine if Respondents were suveeseful in obtaining @ loan

nied foe thie consumers ‘There omnes inc: Oa
(Consumer L”} paid $1,600 in up-front fees; AMM Ccomsurner Maid
52.000 in upton fos; «xd ARAN CConsemer N) paid $1,589 in up-one

ees

Respondents engeyed in willful conduct waich was intended 10

deceive and derud Maryland consumers relerenced above, which dentonstraed a complete
lick of goo! faith a Fir deulngs by Rexndens, and which broached any dntis thc
Respondents owed hex consumers, Such contvet included tu wes nt limited to, the
follwing

Respondents failed to perform those loun mofietion
services for Maryland consumers that they promised lo provide el for whieh chy hod
collected upettont Es,

i), Respontems purposely soncealed this information when
contacted by Maryland consumers who had entered inta loan modification agreements with
Respondents fy intentionally misrepeseeing the progsess of thle len modifications, when

jn fact Respoadents bad nor even artemapted ro modify thvir revidendal morluage loans;
(lip. Respondents failed mo rerura telephone calls and e-mail
comumnisations from: Maryland consumers once they became concemcd that Respondents
hhad done nothing to ablain loan modifications on their behalf, and

Gx). Finally, Reypunlenis refused lo provide selimds (o these

“Marglanc cossumers when refunds were dye fr lank of servioe.

4. In the present matter, Respondents are subject to the MCSDA, inelading its
prohibition va engaging in credit services usiness activities without first being Tieensed
amder the MCSBA. Seo CL § 14-1902(1) (“fal credit services business, its employees, and
independent contractors sho sell or atempt to sell the services of a credic services business
shall not: (1) frJeceive any moncy or oer valuable consideration from the consumer, anes
Ihe crodit services business has sosured from the Commissioner a license under Title 11
Soblide 3 of the Finunetsl Instlions Article... CL §14-2903(b) (al evedit services
business is required lo be Hicensed under this subtide and is subject co the licensing,
investigatory, enforcement, snd penslty provisions of this woe and Title Ll, Subtitle 3 of
the Financial Tnsitutions Article"); FT § 11-302 (unless the person iy Tieensod by the
Commissioner, « person may nol...) tefagage in the buxiness ef & credit services
business as defined under ‘litle 14, Subtitle 19 of the Commeseiat Law Acta"); and FI §
11-303 (Tal license under this subsite shall be applied for and isssed im accordance with,
ang is subject to, the licensing and investigatory provisions of Subtitle 2 of this title, the
‘Maryland Consumer Loan Law ~ Lieensing Provisions"

5. Acvording w the Cornmissioner’s record, slo lime relevant to the fits see
forth ie the Suesmaary Order of Fehrusry 25, 2011, or in the present Final Onles, have the

‘Respondents been licensed by te Commissioner under the MCSBA.
6. Respondents have cnguged in credit services business activities without
dhoving ths requisite license by advertising hat they ould provide Joan madifcstice. services
os described above, and by entering ino conlracul agreements with Muryond consumers,
referenced above, io provide such serves. Resprndenis” unlicensed lown modilieaion
activities thus eonstiote violations of CL § 14-1902(1}, CL §14-1903(h), FT § L130, and
F1§ 11-303, thercby subjecting Respondents to the penalty provisions af the MCSTA

7. Additionally. by collecting upsfiont foes prior to fully and compleiely
revlorming al vorvices on behalf of consumers. Respondents violated CL § 14-1906) of

the MCSRA (“[a] credil services business, its employees, and independent contactors who

sell or altempl lo self the services of a credit services business shall nor: .. (6) felharge or
receive any money or ster valuable consideration prior to Fell and complete performance af
the services that the cred services business hes ayrord Io perform for or on behalf of the
consume”),

8, Farther, although Respondents read representationy Ut ibey would obtain
beneficial Joan modifications for Maryland consumers, referenced above, the
Commissioner's investigation supports a finding thar Respondents ever oblained the
promised lovn modifications for these corsumers; as such, Respondents violated CL § 14-
190244) ("[a] erelié servives business ils employecs, and independent contractors who sell
‘ar uttempt lo sell the servives of credit services business shall noc: ... (4) make ar use
ny false oF mivleading representations in the offeror sale of the services of a sxclit services
business")

9. Respondents further violated the MCSBA theough the following: they Tailed

9 obiin the roynisite surety bonds, in violation of lo CL §§ 14-1908 and 14-1909; they
consumers with Che eequigle information statements, in violation of CL. §8

fated ea pr
41M and 14-1905; and Respondents hilee «9 include oll of the requisite contmetual
tems in their agreements with wonsusners as requied under CI. § 14-1906

10, By filing to obzain beneficial toan modifications for Maryland cansenners,
ceferenced above, which Respondents had agised to provid, Lespondenss breached thir
contracly wilh these consumers andar Greaebed the obligations arising under those
canines, Such brewhes vonstitue per se violations of the MCSBA pursuant a CL § 14+

1907(u) (“lalay breach hy a eredit servives business of 9 contract under this subtitle, or of

any obligation arising under it, shall constitute a violation of this subtitle”).
11. As the conuants between Resporienty and Maryland consnmers, referenced
above, failed ta comply with the spesific requirements imposed by the MCSBA (as
discussed above}, all loan modification contacts between Respondents and these Maryland
‘consumers axe void aud unenforceable as aeainst the public pulisy oF the Slule of Mayland
pursuant to CL § 14-1907(b} (Talay contact for services ftom a oredit services business
Gu does not comply with the applicable provisions of this subtitle shall he void and
unenforceable as contrary (othe gablic policy ofthis State")
12, The MCSBA prohibits raud and deceptive businoss prctices at CL § 14-
1992(5), which provides as falls:
[al credit services business, its employees, ara independent
Contractors wha sell of atternp to sell the services of a credit
services business shall not: . . . (5) lelagage, directly or
indioedly, in any act, practice, ar course of husiness which
‘operates as a fianl or devcption on any person in connection

with the offer or sale of the secviees of a credit services
business