Industry News

Massachusetts targets Lawrence-based mortgage brokers

Surging foreclosure rate invites state investigation

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Massachusetts regulators allege that two mortgage brokers inflated the incomes of borrowers so they would qualify for home loans. The state's Commissioner of Banks on Aug. 11 issued cease-and-desist orders against Lawrence-based Diamond Mortgage Services and Synergy Mortgage Group. The companies share the same address -- 238 Essex Street. Diamond Mortgage agreed to pay a $200,000 fine and close its Lawrence office, but will continue to operate in Taunton, where it is based, the Associated Press reported, citing the Boston Globe. Synergy Mortgage can still request a hearing to challenge the cease-and-desist order. Steven Newberger, president of Diamond Mortgage, told the Globe that he closed the company's Lawrence branch in July and fired branch manager Edward J. Hammonds after state regulators informed him of their investigation. Hammonds opened Synergy Mortgage around Aug. 5, the Globe reported. The Division of Banks has ordered two other Lawrence firms, R&R Financial Services Inc. ...