New Fed Mortgage, a retail lender licensed to do business in all New England states except Vermont, will acquire Commonwealth Mortgage LLC early in 2019. Commonwealth Mortgage is a direct to consumer or internet lender.

The acquisition means New Fed will have a direct to consumer channel in states where it doesn’t have a retail presence, and it can expand into additional states, including Virginia, Illinois, Maryland and Pennsylvania.  Also, New Fed will be hiring additional staff to coordinate the internet mortgage division.

[caption id="attachment_8627" align="alignright" width="204"] Brian Damico[/caption]

“The acquisition will allow us to grow the company further and serve other markets in more states as well as to integrate and build out [Commonwealth's] existing platform of mortgage loan servicing which will create stronger relationships with our borrowers in the future,” said Brian Damico, president of New Fed.

Commonwealth has funded billions of mortgage loans since opening in 2000 and has expanded to a multi-state platform. It originates Fannie Mae, Department of Veteran Affairs, Federal Housing Authority and department of Agriculture Loans.

New Fed experienced rapid growth in 2018 adding on 25 new employees to its team along with the addition of two new retail branch locations.  “Over the past year we have built our infrastructure and have been looking for opportunities for growth, said Damico. “Our vision for growth has been through retail branches in New England and to open a consumer direct channel outside of New England.  The acquisition of Commonwealth enables us to do that while expanding our lending footprint. We are now more versatile with our current infrastructure and more importantly we have the right people in place.”

New Fed has specialized in residential retail mortgage lending since 2001 and is licensed in seven states with team of 65 employees. New Fed offers in house underwriting for conventional, jumbo, FHA, VA, USDA, portfolio lending and state-housing programs.  Products available include first-time home-buyer programs with little zero down, pick your own term traditional fixed-rate programs, adjustable-rate-mortgage programs, construction loans and 203K renovation loans.

Wells Fargo & Co. has reached an agreement with all 50 state Attorneys General and the District of Columbia regarding mortgage interest rate lock issues, under which it will pay $575 million to settle civil claims.

The company has been discussing these issues with federal regulators and is paying back consumers for their losses. Also, Wells faced regulatory scrutiny for its retail sales practices, auto collateral protection insurance and Guaranteed Asset-Auto Protection matters.

“This agreement underscores our serious commitment to making things right in regard to past issues as we work to build a better bank,” said Tim Sloan, chief executive officer and president of Wells Fargo.

Under the terms of the agreement, Wells Fargo will:

• Pay a total of $575 million to resolve civil claims that the state attorneys general otherwise might bring arising out of or related to the covered conduct prior to the effective date of the agreement.
• Maintain designated teams to review and respond to customer inquiries on the covered issues.
• Create and maintain a website that describes the issues and Wells Fargo’s existing remediation efforts and identifies contact information for consumers to use if they have any questions or concerns about the covered issues.

Wells Fargo will also provide periodic reports to the states on the progress of its existing remediation efforts.

As of the end of third quarter 2018 the company had accrued $400 million of the settlement amount and expects to accrue the remaining $175 million in fourth quarter 2018.

Under the terms of the agreement, Wells Fargo will:

• Pay a total of $575 million to resolve civil claims that the state attorneys general otherwise might bring arising out of or related to the covered conduct prior to the effective date of the agreement.
• Maintain designated teams to review and respond to customer inquiries on the covered issues.
• Create and maintain a website that describes the issues and Wells Fargo’s existing remediation efforts and identifies contact information for consumers to use if they have any questions or concerns about the covered issues.

Wells Fargo will also provide periodic reports to the states on the progress of its existing remediation efforts. For a related article, click here.

Edward Sypher Jr., former CFO of mortgage lender Vanguard Funding, was sentenced to 18 months’ imprisonment to be followed by three years’ supervised release. Sypher pleaded guilty in February to conspiring to commit wire and bank fraud in connection with the diversion of warehouse loans Long Island-based Vanguard had obtained to fund home mortgages and to refinancing mortgages.

Sypher was also ordered to pay $22,150.45 in forfeiture. Sandra Feuerstein, U.S. District Judge, imposed the sentence, and the court will set the amount of restitution in the future.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Maria T. Vullo, Superintendent, New York State Department of Financial Services (DFS), announced the sentence.

“Edward Sypher Jr. has been punished for deceiving his banking partners in order to divert millions of dollars to his own benefit and that of other Vanguard executives,” said United States Attorney Richard Donoghue. “This office, working hand-in-hand with our law enforcement partners, will continue to vigorously investigate and prosecute business executives who choose to commit fraud as a means of getting ahead at the expense of the businesses and residents of our district.”

Vanguard was a 33-branch, mortgage lending institution licensed in California, Connecticut, Florida, Georgia, Maryland, Massachusetts, North Carolina, New Jersey, New York, Pennsylvania and Washington. Between August 2015 and March 2017, Sypher and his co-conspirators at Vanguard engaged in a multi-million-dollar fraud scheme by falsely representing that the loan proceeds would fund or refinance mortgages for clients. Instead, Sypher and his co-conspirators diverted the funds to pay personal expenses and compensation, and to pay off loans they had previously obtained through fraudulent loan applications.

“When fraudsters treat investors like their own personal ATMs, using funds invested in good faith to line their own pockets, pay for personal expenses, and repay other fraudulent loans, confidence in the integrity of our financial systems suffers,” said William Sweeney, assistant-director-in-charge for the FBI.

On December 10, 2018, Matthew Voss, Vanguard’s former chief operating officer, was sentenced to 24 months’ imprisonment for his role in the scheme.