Although served with a cease and desist order on Tuesday for allegedly operating without a license and forging a letter from the state Division of Banks, Boston Financial Group’s Web site (pictured above) was still up and online mortgage applications were being accepted as of Banker & Tradesman’s Friday press deadline.

Apparently, Boston Financial Group just couldn’t wait. Although the Boston-based company had an application pending with the state Division of Banks to operate as a mortgage broker, it decided to go forward with plans to enter the market without proper approval, according to the DOB.

In addition to operating without a license, the company also allegedly forged documentation stating it was authorized to operate in the mortgage field in the Bay State. Boston Financial Group tried to use the phony paperwork to do business with at least one mortgage lender that the state is aware of, said David Cotney, senior deputy commissioner of the DOB.

State regulators last week took action to halt the premature mortgage handlings the company was believed to be involved in. On Dec. 20, a cease and desist order was issued by the Division of Banks to Boston Financial Group, which operates under the name of BFG Mortgage at 418 Center St. in Boston’s Jamaica Plain neighborhood. According to the DOB, the company is not licensed to act as a mortgage broker or lender in Massachusetts.

The company is owned by Jose de la Rosa. According to de la Rosa, a single employee is to blame for the incident. In an interview with Banker & Tradesman on Friday, de la Rosa said he is cooperating with the DOB and has prepared a formal letter explaining the situation that he will deliver to regulators on Tuesday. De la Rosa also said the employee was not officially supposed to start work until Jan. 4, but due to the incident has been fired.

“We did research and we found a document he had forged and sent over to a lender. He was hired to be a loan officer to cover the North Shore,” said De la Rosa. “We respect the laws, and we abide by them. We will make sure everybody respects the integrity of this company. We will not allow an employee to hurt that.”

In August, Boston Financial Group submitted an application to obtain the rights to legally act as a broker, said Cotney. According to Cotney, it usually takes about 60 days to issue a license once all the appropriate information is filed. Boston Financial Group was contacted by the DOB in November and was asked to provide more information since the application was still incomplete, said Cotney.

De la Rosa said the company understands the laws and stills plans to open in Boston when it has been given the proper authority to do so.

The company’s Web site was still up and running as of Banker & Tradesman’s Friday press deadline. Online applications for mortgages were still being accepted at the site at the end of last week, even after the company had received the regulatory order to stop doing business.

“It’s up, but it hasn’t been publicized. Nobody is aware of the Web site,” said de la Rosa. “We have not taken any applications in [Massachusetts].”

“It is important to make sure people deal with only licensed [mortgage] companies, banks or credit unions,” said Cotney. “Home purchases, for most consumers, are the most important transaction in their lives.”

‘Following Up’

The state’s Office of Consumer Affairs and Business Regulation issued a consumer alert the same day the cease and desist order was delivered.

“We wanted people in the mortgage trade to know,” said Brenda Doyle, a spokeswoman for Consumer Affairs.

The DOB first became aware of the situation when it was contacted by a local lending company. Boston Financial Group allegedly had contacted the lender for assistance in placing a mortgage loan for a residential property in Massachusetts. According to the DOB, Boston Financial Group provided the lender with a fake letter from the government office saying its mortgage broker application had been approved. The letter had the seal of the commonwealth and a signature from the DOB on it, Cotney said.

Cotney said the letter did not come from his office. He said lenders often ask for proof that the brokerage firm with which they are dealing is licensed in order to protect themselves.

“It’s illegal for one of our companies to do business with an unlicensed broker,” said Cotney.

According to the DOB, Boston Financial Group’s unlicensed activity is a violation of state law. Cotney said it is not unusual for regulators to catch a couple of companies operating without a license each year, but finding a company that allegedly created its own version of a license to facilitate its activities in the market is what sets this incident apart from others.

“It [unlicensed mortgage activity] happens occasionally. We don’t usually see people falsifying documents,” he said. “They were allegedly brokering loans in Massachusetts.”

Lenders and homebuyers are always welcome to check with the DOB to make sure they are dealing with a credible and authorized company when it comes to mortgages.

“The Division [of Banks] will not tolerate companies [that] are operating in Massachusetts without a license and are engaging in practices which deceive both consumers and other participants in the Mortgage Industry,” said Steven L. Antonakes, the state’s bank commissioner, in the consumer alert.

It is still unclear how many mortgage transactions Boston Financial Group may have been involved in or how many applications were collected by the firm.

“That we don’t know. We are trying to find out,” said Cotney. “We are going to be following up.”

The cease and desist order was faxed to the company Tuesday afternoon, said Coney. He said no one from the DOB has had direct contact with the owner, but de la Rosa did leave a message with the agency saying he had received the fax.

The DOB is expecting de la Rosa to hand over records of any mortgage transactions or other documents pertaining to the alleged illegal mortgage operations by early January. Cotney would not say how that might affect the pending application to obtain a real license.

“We will have to cross that bridge when we come to it,” he said.

While the DOB has mandated that Boston Financial Group cease its business operations, Cotney said he is uncertain at present what, if any, legal repercussions there may be regarding the allegedly fabricated license documentation. Any action along those lines would likely be taken by a different state agency or authority, he said.