Continuing a crackdown on alleged mortgage fraud, Massachusetts regulators issued cease-and-desist orders against two mortgage brokerages Monday and shut down a third unlicensed lender. 

Since issuing emergency regulations Sept. 8, the Massachusetts Division of Banks has conducted sweeps looking for instances in which borrowers’ income was inflated to qualify them for loans they could not afford. Surprise inspections have turned up many instances in which falsified documents were used to inflate incomes.

A public hearing on the emergency regulations is scheduled for 10 a.m. Oct. 17 at One South Station, 5th Floor, in Boston. The new regulations would explicitly forbid lenders from falsifying income or asset information, or having borrowers sign blank or incomplete loan applications.

In the latest inspections, cease-and-desist orders were issued against two licensed brokers, Confidence Mortgage and Middlesex Financial Associates LLC, who allegedly falsified information on loan documents. The Division of Banks also determined that Buffalo, N.Y.-based Treasury Financial Group was not licensed to conduct business in Massachusetts, and closed its offices in the state.

In a Sept. 7 inspection of Confidence Mortgages main office in Lawrence, inspectors allegedly found evidence that income had been overstated on at least five loans. In three instances, the company’s employees allegedly altered or redacted documents that verified the income or employment of the loan applicant, regulators said in an Oct. 2 cease-and-desist order.

In an Aug. 30 inspection of Middlesex Financial’s Moultonboro, N.H., office — where the company kept files on loans issued in Massachusetts — and in subsequent visits to an unlicensed branch office in Lowell, investigators said they found discrepancies in loan documents

In six loans involving four condominiums and two homes, three borrowers each obtained loans on two properties, listing each property as their primary residence without disclosing their other mortgage on the other loan application.

Some of the loan applications also contained false or misleading information about the number of units being purchased, investigators alleged. Four mortgages involving condos, for example, stated the number of units being purchased as three, instead of one.

“Middlesex Financial knew or should have known that the property information reported, specifically the number of units being purchased, the number of units in each property, the mortgage liabilities of the applicant, and a designation as a primary residence would be relied upon in underwriting the mortgage loan by the mortgage lender or financial institution to which the mortgage loan applications were brokered by the Company,” the Division of Banks said in an Oct. 2 cease-and-desist order.

The latest sweeps bring the number of enforcement actions taken by the Division of Banks in recent weeks to 17.

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