Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

East Coast Mortgage Group, LLC v. State of Maine Bureau of Consumer Credit Protection

Superior Court of Maine, Kennebec

December 6, 2016

EAST COAST MORTGAGE GROUP, LLC and CHRISTOPHER M. BAIN, Petitioners,
v.
STATE OF MAINE BUREAU OF CONSUMER CREDIT PROTECTION, Respondent.

          ORDER ON 80C APPEAL

          MICHAELA MURPHY, JUSTICE

         Before the Court is an appeal of a determination by the Maine Bureau of Consumer Credit Protection (the "Bureau") finding that Mr. Bain ("Bain") and East Coast Mortgage Group, LLC ("East Coast") failed to fulfill their obligation to exercise good faith and fair dealing as required pursuant to of 9-A M.R.S. § 13-116(15).

         I. Background

         Three complaints against Bain and East Coast were reviewed by the Bureau in the Administrative Order issued by the Bureau's Superintendent.

         A. Freeman Case

         Mr. Freeman, a consumer, bid on a multi-unit building owned by HUD after the previous owners had been foreclosed upon. (R. at P-2). Freeman placed this bid based upon a letter from Bain stating that Mr. Freeman had "made application and has been pre-approved to purchase a home through East Coast .... This approval is based on information provided by the borrower and submitted to Shore Financial Mortgage." (R. at P-2). HUD accepted Mr. Freeman's bid on May 26, 2011, conditioned upon closing within 45 days unless 15-day extensions were granted and/or purchased. (R. at P-2).

         On June 2, 2011, Mr. Freeman paid Bain $600 for a required appraisal. (R. at P-2). Mr. Freeman completed a Uniform Application on June 23, 2011, requesting a loan of $76, 997 - representing the purchase price and between $30, 000 and $35, 000 in repairs. (R. at P-2). The "Loan origination company" listed in the application is Envoy Mortgage, LTD. (R. at P-2). Both the initial appraisal and the revised appraisal were provided to Bain (on August 2, 2011 and August 12, 2011, respectively) after the initial HUD 45-day closing deadline had passed. (R. at P-2). Mr. Freeman was granted several extensions. (R. at P-2).

         Thereafter, Bain realized that Mr. Freeman would not qualify for a loan of the full amount applied for. (R. at P-3). Bain contacted Mr. Freeman with revised numbers reflecting a reduction in the cost of repairs. (R. at P-3).

         At this time Bain's employment at Envoy was "terminated voluntarily" after it was discovered that Bain had outside employment at East Coast, in violation of Bain's employment contract with Envoy that prohibited him from maintaining outside mortgage-related employment. (R. at P-3). Bain told Mr. Freeman that his relationship with Envoy ended "because they said they could do this loan. And didn't." (R. at P-3). Bain told Mr. Freeman that Bain delayed payment of the appraisal fee to Envoy because he believed that Envoy would be more likely to make the closing happen if the fee had not yet been paid and Envoy "had something to lose." (R. at P-3).

         Mr. Freeman realized that it was too late to complete the purchase and start the rehab process before winter. (R. at P-3). Mr. Freeman asked Bain to reimburse the $600 appraisal fee he was charged in June and the $225 extension fee paid to HUD. (R. at P-3). HUD returned Mr. Freeman's $500 deposit and forgave three extension payments, but assessed one payment of $225, which Bain has not refunded. (R. at P-3). It is unclear whether Bain refunded the $600 appraisal fee. (R. at P-3).

         B. Roy Case

         Ms. Roy began working with Bain in order to refinance a VA loan to either reduce payments or shorten the term. (R. at P-4). Bain had her apply for a HUD/FHA loan instead of a VA loan. (R. at P-4). The HUD/FHA loans are different from VA loans in a few ways. Primarily, the VA refinance loans do not require appraisals and the HUD/FHA loans do. (R. at P-4). Additionally, the interest rates would have been the same for the HUD/FHA loan and the VA loan, but the VA loan would have required nearly $2, 000 more in origination fees and would have offered $2, 500 less in "credit" than the HUD/FHA loan. (R. at P-4).

         In this case, Ms. Roy paid for an appraisal, which set value at an amount that did not support the loan amount applied for through HUD/FHA. (R. at P-4). After the initial loan application did not go through, Bain and Ms. Roy applied for a VA loan, which did go through. (R. at P-4). Roy sought a finding ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.