EAST COAST MORTGAGE GROUP, LLC and CHRISTOPHER M. BAIN, Petitioners,
STATE OF MAINE BUREAU OF CONSUMER CREDIT PROTECTION, Respondent.
ORDER ON 80C APPEAL
MICHAELA MURPHY, JUSTICE
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. §
complaints against Bain and East Coast were reviewed by the
Bureau in the Administrative Order issued by the Bureau's
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).
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).
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).
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).
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.
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).
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