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. and Reyes Mortgage Co., to stop brokering mortgages without state licenses. Newberger said the principal of R&R, Fanny Rodriguez, worked at Diamond Mortgage until she was fired 18 months ago.
State regulators said Lawrence is a hot spot for foreclosures. Filings are up nearly 180 percent in the last two years, the Globe reported, citing ForeclosuresMass Corp data.