A surprise inspection at a mortgage brokerage earlier this month found several incidences of possible fraud by a former Boston city councilor, the Division of Banks said. That prompted the division last week to issue a temporary cease-and-desist order against Dedham-based HomeRun Mortgage.
Peggy Davis-Mullen, a former four-term, at-large Boston city councilor and mayoral candidate in 2001, is the owner and sole operator of HomeRun Mortgage, which is headquartered in Dedham and has an additional office in Brockton. She obtained her license to run the company in May 2002, after she had left the City Council.
No one answered the door last Thursday at HomeRun’s headquarters at a residence on Court Street, and mail was piled up on the porch floor inside. Calls to listed phone numbers for HomeRun Mortgage were not returned.
During the course of a surprise on-site inspection of the company’s Dedham office by the Division of Banks on July 10, Davis-Mullen could not provide requested information relating to the operating accounts of the company, payroll information, or evidence that her company had complied with corrective measures DOB had required following a 2006 consumer compliance examination, the DOB said.
Bank examiners then “reviewed several loan files that contained mortgage loan documents that had been altered by whiting out information, and cutting and pasting borrower information. These documents included purchase and sale agreements, settlement statements, loan applications and credit reports. As a result, the division’s examiners immediately sealed and secured file cabinets and internal of-fices containing all remaining loan files on the premises for further review,” according to the official order.
The inspection was initiated after the Division of Banks received loan documents connected to HomeRun Mortgage from an anonymous source, a spokeswoman said.
On July 11, Davis- Mullen notified DOB that she was withdrawing her pending mortgage broker renewal applications. On July 14, when examiners returned to the Dedham office, they were unable to gain access, because the doors were locked and no one was around. According to the Division of Banks, HomeRun’s licenses expired May 31.
The DOB’s temporary cease-and-desist order requires HomeRun to place all remaining loan applications with a qualified lender or broker with no loss to the borrowers, and forbids the company from initiating any new mortgage loan transactions. In addition, the order prohibits HomeRun from altering or destroying any home mortgage loan records, according to a statement from the DOB.
HomeRun processed just under 100 mortgage loans in 2006 and 2007, and had experienced minimal mortgage activity in 2008, DOB said.
Unless Davis-Mullen requests a hearing by Aug. 4, the temporary cease-and-desist order will become final.
Neither Mayor Thomas Menino, whom Davis-Mullen challenged in 2001, nor several of her former colleagues on the Boston City Council responded to calls seeking comment.
The company was not a member of the Massachusetts Mortgage Association, a broker trade group, said Executive Director Denise Leonard.
