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Ace Mortgage Inc. - Settlement Agreement

State of New York Banking Department


In the Matter of

Ace Mortgage Inc.

A Mortgage Broker registered pursuant to
Article XII-D of the Banking Law

-Respondent-

 

SETTLEMENT AGREEMENT


WHEREAS, Ace Mortgage Inc.  (“ACE” or “Registrant”), with headquarters at 105-20 Liberty Avenue, Ozone Park, NY 11417, was granted a registration on March 07, 1995 to engage in business as a registered mortgage broker pursuant to Article XII-D of the New York Banking law (the “Banking Law”) by the Superintendent of Banks (the “Superintendent”) of the State of New York; and

WHEREAS, pursuant to Section 3500.7(c) of HUD Regulation X – Real Estate Settlement Procedures Act (RESPA), Registrant is required to provide a Good Faith Estimate consists of an estimate, as a dollar amount or range each charge which will be listed in Section L of HUD-1; and that the borrower will normally pay or incur at or before settlement based upon common practice in the locality of the mortgaged property. Each such estimate must be made in good faith and bear a reasonable relationship to the charge a borrower is likely to be required to pay at settlement, and must be based upon experience in the locality of the mortgaged property. As to each charge with respect to which the lender requires a particular settlement service provider to be used, the lender shall make its estimate based upon the lender’s knowledge of the amounts charged by such provider; and

WHEREAS, an examination of ACE as of June 30, 2007 conducted by the Banking Department found that ACE failed to disclose yield spread premiums on the Good Faith Estimate to twelve consumers; and ACE received yield spread premium  totaling $68,091 from lenders on loans to these twelve consumers; and

WHEREAS, in a letter dated August 29, 2008, the Banking Department notified ACE by mail of ACE failed to disclose yield spread premium and directed ACE to make $68,091 restitution to these twelve consumers; and

WHEREAS, in a letter dated September 19, 2008, ACE requested a waiver on these consumer restitution; and

WHEREAS, in a letter dated November 13, 2008, the Banking Department notified ACE by certified mail with return receipt requested that ACE has to make the required restitution as previously directed on or before December 8, 2008; and

WHEREAS, in a letter dated December 1, 2008, ACE requested one year to make the restitution to twelve consumers; and

WHEREAS, the Superintendent and ACE mutually agree to resolve such violation by requiring ACE to pay consumer restitution totaling $68,091 over a 14 month periods as listed in Schedule 1; and

NOW, THEREFORE IT IS STIPULATED AND AGREED BY THE PARTIES HERETO AS FOLLOWS:

THAT, ACE agrees as follows:

  1. ACE, fully understanding the terms and conditions of the Settlement Agreement (the “Agreement”), freely and voluntarily waives its right to a hearing on the violation cited and any all appeal relating to this matter;
  1. ACE will take all necessary steps to ensure compliance with all applicable federal and state laws and regulations relating to its mortgage business;
  1. ACE agrees to issue refunds totaling $68,091 to consumers in 14 monthly installments as listed in Schedule 1.
  1. All communication regarding this Settlement Agreement shall be sent to:

Rholda L. Ricketts
Deputy Superintendent of Banks
Mortgage Banking Department
New York State Banking Department
One State Street
New York, NY  10004

Edul Ahmad
President
Ace Mortgage Inc.
105-20 Liberty Avenue
Ozone Park, NY 11417

  1. The provisions of this Settlement Agreement shall not bar, estop or otherwise prevent the Superintendent, or any state or federal agency or department, from taking any other action affecting Registrant, any of its current or former officers, directors, employees, or insiders, or their successors or assigns in connection with any matter relating to this Settlement Agreement.  Nor shall this Agreement bar, estop or otherwise prevent the Superintendent from entering any other action affecting Registrant, any of its current or former officers, directors, employees, or insiders, or their successors or assigns in connection with any matters not covered by this Agreement.
  1. No extension or waiver of the terms of this Settlement Agreement shall be binding on the Banking Department unless it is in writing and signed by the Superintendent or Deputy Superintendent.
  1. Each provision of this Settlement Agreement shall remain effective and enforceable until stayed, modified, terminated or suspended in writing by the Superintendent or Deputy Superintendent.
  1. The effective date of this Settlement Agreement is the date on which it is executed by the Superintendent or Deputy Superintendent.
  1. The provisions of this Settlement Agreement are not confidential.

Agreed to and Accepted:

                                         
New York State
Banking Department              

By: ___________________________
Rholda L. Ricketts
Deputy Superintendent of Banks
Dated: _________________________

Ace Mortgage Inc.

By: ___________________________
Edul Ahmad
President
Dated: _________________________________________________