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MAINE BUREAU OF CONSUMER CREDIT PROTECTION

35 SHS, Augusta, Maine 04333


Phone:	207-624-8527
Fax:	207-582-7699
Consumers-only toll-free:	1-800-DEBT-LAW (1-800-332-8529)

Maine Regulators Suspend Connecticut Company's Mortgage Lending License

January 19, 2007

The Maine Office of Consumer Credit Regulation today temporarily suspended the mortgage lending license of a Connecticut company, Mortgage Lenders Network USA, Inc. (MLN).

The action is the result of an ongoing investigation into allegations that MLN failed to provide funding for mortgage loans that had already closed. Maine law requires that mortgage loans be funded at closing, or for those loans subject to a right of rescission, the consumers' funds must be disbursed by noon of the day after the rescission period expires.

The order prohibits MLN from accepting any new loan applications, and requires the company to transfer all pending files to validly-licensed lenders.

When the company stopped funding loans three weeks ago, approximately 100 Maine loans were in the process of being funded, or were scheduled to be purchased by MLN from Maine lenders. Since Maine lenders and closing agents are responsible for funding closed loans, many mortgage brokers and lenders in this state withdrew their unfunded loans from MLN and placed them with other purchasers or investors. State regulators are checking on the status of 16 Maine loans that remain on "closed but not funded" list produced by MLN at regulators' demands.

“Since this situation arose, our office has been in daily contact with the company and with regulators from all New England states," said Will Lund, director of the Office of Consumer Credit Regulation. "Our first priority was to determine whether the company could locate new sources of capital in order to fund all pending loans. During this period of supervised forbearance, nearly 400 of the 900 loans pending nationally, were funded. However, that funding process has stopped so we find it necessary to issue this order as part of our regulatory involvement in the case."

Specific additional penalties against the company may follow. Lund said that the company posted surety bonds totaling $150,000 to qualify to lend in Maine, and those funds are available to consumers and other parties who can prove monetary damages as a result of the company's alleged failure to comply with Maine law.

The Maine order was part of a coordinated effort among regulators from all the New England states, as well as from New York, Pennsylvania and Michigan.

The complete order is found at www.credit.maine.gov.

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The Maine Bureau of Consumer Credit Protection was established in 1975 to enforce a variety of credit-related consumer laws. The Office licenses lenders, creditors and collectors; conducts periodic examinations of creditors to determine compliance with state laws; and responds to consumer complaints and inquiries. The Office also conducts educational seminars and provides speakers to advise consumers and creditors of their legal rights and responsibilities.