Arboretum Mortgage Corp. License Revoked and Fined $27,425

Last updated 2/6/26 ORDER SUM MARY Consumer Se rvices D ivision Case N umber C -24-3783 Consent Orders resolve investigations. In t hese, compa nies and individual s work wit h us to agree to te rms that resolve the alleged issues in the investigation. Name Arboretum Mortga ge Corporat ion, NML S #42831 Order Num ber C-24-3783 -26-CO01 Date issued February 6, 2026 What doe s this C onsent Order requ ire? x M ust pay a fine of $2 7,425. 00 $1 0,000.00 of this fine is stayed (doe sn’t hav e to be paid) until February 6, 2 029, as long as Respondent c omplies w ith the order. The f ine goe s aw ay on that dat e i f Respondent has complied. x Must pay an investigation fee of $2,719.20. (Investigation fees cover the cost of DFI staff t ime working on the investiga tion.) x Respondent isn’ t allowe d to participate in the m ortgage brok er indust ry in Washi ngton s tate until Fe bruary 6, 202 9. This re quirement is sta yed as long as Respon dent complies with the order. This requirement goes away on that date i f Responden t has compli ed. x Respondent’s mortgage broker lice nse revoked. This require ment is stayed until February 6, 2029, as lo ng as Respo ndent complies with t he order. This requir ement go es away on that dat e if Resp ondent has comp lied. Need m ore informa tion? You can c ontact the C onsumer S ervices Division, Enforcement unit a t (360) 902- 8703 or csenforcecom plaints@dfi.wa.gov. Please remember that we cannot prov ide financi al or legal advice t o members of t he public. We also cannot rele ase confidential inf ormation.

6th February

STATEMENT OF CHARGES C-24- 3783- 25-SC 01 ARBORE TUM MORT GAGE CORP. 1 DEPARTME NT OF FINANCIAL INSTITUTIONS Divis ion of Cons umer S ervic es P.O. Box 4120 0 Olympia, WA 98504-1200 (360) 902-8 703 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 STATE OF WASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS DIVISION OF CONSUMER SE RVICES IN THE MATTER OF DETERMINING Whether there has been a violation of the Mortgage Broker Practices Act of W ashington by: ARBORETUM MORTGAGE C ORPORATION, N MLS #42831, Respondent. No. C-24-3783-25-SC01 STATEMENT OF CHARGES and NOTICE OF INTENT TO ENTER AN ORDER TO CEASE AND DES IST, REVOKE LICENSE, I MPOSE FINE, COLLECT INVESTIGATION FEE, and REC OVER COSTS AND EXP ENSES INTRODUCTION Pursuant to RCW 19.146.220 and RCW 19.146.223, the Director of the Department of Financial Institutions of the State of Washington (D irector) is responsible for the administration of chapter 19.146 RCW, the Mortgage Broker Practices Act (A ct). After having investigated pursuant to RCW 19.146.235, and based upon the facts available as of the dat e of this Statement of Charges, the Director, through his designee, Consumer Services Division Director Ali Higgs, institutes this proceeding and finds as f ollows: I. FACTUAL ALLEGATIONS 1.1 Respondent. Arboretum Mortgage Corp oration (Respondent) was l ic ens ed by th e Dep art me nt of Financial Institutions of the State of Washingt on (Department) to condu ct business as a mortgage broker on or about January 4, 1995, and c ontinues to be licensed to date. 1.2 2019 Examination. Between or about January 21, 2020, and January 23, 2020, the Department examined th e books and records of Respondent for the period of September 1, 2017, through December 31, 2019. The examination r evealed multiple violations of the Act, including two repeat violations from the prior 2015 Examination. 1.3 2024 Examination. Between or about March 25, 2024, and March 29, 2024, the Department examined the books and records o f Respondent for the period of January 1, 2022, through January 31,

STATEMENT OF CHARGES C-24- 3783- 25-SC 01 ARBORE TUM MORT GAGE CORP. 2 DEPARTME NT OF FINANCIAL INSTITUTIONS Divis ion of Cons umer S ervic es P.O. Box 4120 0 Olympia, WA 98504-1200 (360) 902-8 703 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2024 (Relevant Period). The examination revealed mu ltiple violations of t he Act, including five repeat violations from the prior 2019 Examination. 1.4 Change in Ownership. Between or about February 1, 2023, to June 20, 2024, Respondent did not notify the Depar tment twenty days in advance via the Nationwide Multistate Licensing System (NMLS) 1 that there was a change in owne rship of 20% or more. On or about February 1, 2023, Mark Simpson and Ray Biggers, each previ ous ly owning 35% of Res pondent, were removed from ownership. On or about March 5, 2024, Res pondent provided an organizational chart to the Department showing that five owners all own 20% each. The a ccurate Company (MU1) Form was not updated on NMLS until on or about June 19, 2024. 1.5 Untimely Mortgage Call Reports. During the Re levant Period, Respondent did not timely file two Mortgage Call Reports (MCRs) to the Department. MCRs consist of two filings, the Residential Mortgage Loan Activity (RMLA) filing and the Financial Condition (FC) filing. The second quarter 2023 RM LA was due August 14, 2 023, and was submitted la te on September 11, 2023. The third quarter 2023 RMLA was due Nov ember 14, 2023, and wa s submitted late on December 18, 2023. 1.6 Inaccurate Mo rtgage Cal l Reports. During the Relevant Pe riod, Respon dent submitted approximately seven inaccu rate mortg age call reports. In th e third quarter 2023 RMLA, the Total Application Pipeline amount and number of loans did not equal the Tota l Application Pipeline Results amount and number of loans. The first qu arter 2022 RMLA and the fi rst, third, and fourth quarter 2023 RMLA reports did not correctly stat e the number of loans that were still in process, withdrawn, cancelled, an d/or denied. For both the fourth quarte r 2021 and second quarter 2022 1 The Nationwid e Multistate Licensing System & Registry is a multistate licen sing system dev eloped and maintained by the Conference of S tate Bank Supervisors for licensing an d regist ration.

STATEMENT OF CHARGES C-24- 3783- 25-SC 01 ARBORE TUM MORT GAGE CORP. 3 DEPARTME NT OF FINANCIAL INSTITUTIONS Divis ion of Cons umer S ervic es P.O. Box 4120 0 Olympia, WA 98504-1200 (360) 902-8 703 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 RMLAs, Respondent erroneously stated that Res pondent’s gross revenue fr o m operations was less than its broker fees collected. This is a repeat find ing from the 2019 Examination. 1.7 Advertised wi thout Displa ying Required In formation. On or about at least March 29, 2024, on at least two webpages advertising Respondent ’s mortgage broker s ervices, Respondent and loan originators employed by Respondent did not provide the company’s license number and/or a link to the company’s NMLS consumer access pa ge. 1.8 Prohibited Adver tising Practices. On or about at least March 29, 2024, an d on at least three webpages, Respondent advertised using misleading and prohibited phrases. Respondent offered to “find the most co mpetitive rates and progra ms for their clients,” stated that “interest r ates are at historic low levels,” used the phrase “Today, depressed home values and historic low interest,” and used other similar terms on the webpages. 1.9 Prohibited Practice. On or about August 16, 2022, Responde nt provided a borrower with a mortgage loan pre-appro val letter without havi ng first obtained approval from a lender or an automated underwriting system (AUS). The borro wer’s information was su bmitted to an AUS on August 17, 2022. 1.10 Borrower-Paid Services Di sclosure. During the Relevant Pe riod, Respondent did not provide borrowers with a wr itten notice on borrower-p aid services within three business da ys of receiving a residential m ortgage lo an application. For two borrowers, the disclosures were provided late. For six borrowers, either no disclosures we re pr ovided at all, or, if they were p rovided, no copies were kept in the loan f iles. 1.11 Untimely Loan Estimate. During the Relevant Period, Respondent did not provide a loan estimate within three business days of receiving at least one borrower ’s application. The application was submitted August 17, 2022, and Respondent provided the loan estimate on August 24, 2022.

STATEMENT OF CHARGES C-24- 3783- 25-SC 01 ARBORE TUM MORT GAGE CORP. 4 DEPARTME NT OF FINANCIAL INSTITUTIONS Divis ion of Cons umer S ervic es P.O. Box 4120 0 Olympia, WA 98504-1200 (360) 902-8 703 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1.12 Incompl ete Loan Estimate. During the Relevant Peri od, Respondent provided two borrowers with incomple te loan estimate s. Respondent did not identify the lender or creditor’s name and address on the first p age of the loan estimates. Under the heading, “Ad ditional Information about this Loan,” Respondent did not list the lender or creditor’s name and NMLS number. This is a repeat finding from the 2019 Examination. 1.13 Untimely Homeowne rship Ho using Counseling Disc losures. During the Relevant Period, Respondent did not provide a list of homeownership counseling organizations that provide relev ant counseling services within three business days after receiving an application for two borrow ers. The first borrower submitted an application on May 8, 2022, and rec eived the list of homeownership counseling organizations on May 15, 2022. The sec ond borrower submitted an application on Augus t 17, 2022, and Respondent provided the list on August 24, 2022. 1.14 Noncompliant Homeowner ship Housing Couns eling Disclosure s. During the Relevant Period, Respondent did not provide borrowers with a compliant list of homeownership couns eling organizations. On or abou t November 9, 2022, Respondent provided one borrower a list of homeownership counseling organizations that did not provide accu rate or relevant written information for organizat ions in nearby geogra phic proximity. On or about February 8, 2022, the Respondent provided a second borro wer with a ho meowner counseling orga nization list that was dated October 2014 and did not appear updat ed or revised. 1.15 Untimely Special Information Booklet. During the Relevant Pe riod, Respondent did not provide a special information booklet, “Your Home Lo an Toolkit,” within three business days afte r receiving an application for two borrow ers. The first borrower submitted an application on May 8, 2022, and Respondent provided the Toolkit on May 15, 2022. The second borrowe r submitted an application on August 17, 2022, a nd Respondent provided the Toolkit on August 24, 2022.

STATEMENT OF CHARGES C-24- 3783- 25-SC 01 ARBORE TUM MORT GAGE CORP. 5 DEPARTME NT OF FINANCIAL INSTITUTIONS Divis ion of Cons umer S ervic es P.O. Box 4120 0 Olympia, WA 98504-1200 (360) 902-8 703 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1.16 Privacy Notice. During the Relevant Period, Resp ondent did not provide at least eight borrowers with an initial privacy notice to consumers. This is a rep eat finding from the 2019 Examination. 1.17 Incomp lete Anti-Steeri ng Disclosu re. On or about November 10, 2022, Respondent provided a blank anti-steering disclosure form to a borrow er. On the same day, Respondent had the borrower sign the blank form. 1.18 Noncompliant Loan Originat or Compensation Agreemen t. During the Relevant Period, Respondent did not develop and imp lement a compliant loan originator compensation agre ement. Respondent based loan originator compensation on a te rm of the transactio n. This is a repeat finding from the 2019 Examination. 1.19 Noncompliant Anti-Money Laundering Program. During the Relevant Period, and through at least March 29, 2024, Respondent did not develop and implement a compliant anti-money laundering program that includes at least incorp orating policies and procedu res, designating a compliance officer with r esponsibilities, providi ng on-going training for employees, and requiring independent testing. This is a re peat finding from the 2019 Examination. 1.20 On-Going Investigation. The Department’s investigation into the alleged violations of the Act by Respondent c ontinues to date. II. GROUNDS FOR ENTRY OF ORDER 2.1 Requirem ent to Notify Department of Significant Developm ents. Based on the Factual Allegations set forth in Section I, Paragraph 1.4, above, Respondent is in appare nt violation of RCW 19.146.0201(2) and WAC 208-660-400(2)(b) for not notifyi ng the Directo r in writing twenty days prior to a change in ownership control of 20% or more. 2.2 Requirement to Submit Timely Mortgage Call Reports. Based on the Factual Allegations set forth in section I, paragraph 1.5, abov e, Re spondent is in appare nt violation of RCW 19.146.390

STATEMENT OF CHARGES C-24- 3783- 25-SC 01 ARBORE TUM MORT GAGE CORP. 6 DEPARTME NT OF FINANCIAL INSTITUTIONS Divis ion of Cons umer S ervic es P.O. Box 4120 0 Olympia, WA 98504-1200 (360) 902-8 703 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 and WAC 208-660-400(1) for not submitting quarterly call reports within 45 days of the end o f each quarter as prescribed by t h e director or NMLS. 2.3 Requirement to Submit Accurate Mortgage Call Report s. Based on the Factual Allegations set forth in Section I, Paragraph 1.6, above, Respondent is in appare nt violation of RCW 19.146.390, and WAC 208-660-400(1) for not su bmitting accurate call reports. 2.4 Advertised wi thout Displa ying Required In formation. Based on the Factual Allegations set forth in Section I, Paragr aph 1.7, above, Respondent is in apparent violation of RCW 19.146.0201(2) and WAC 208-660-446(1) fo r not providing Respondent’s license number and a link to the NMLS consumer ac cess website in its online advertisements. 2.5 Prohibition on A dvertising Using Di sallowed and Misleading Phrases. Based on the Factual Allegations set forth in Section I, Paragraph 1.8, above, Res pondent is in apparent violation of RCW 19.146.0201(2) and (7), and WA C 208-6 60-440(1) and (7), fo r advertising using disallowed and misleading phrases. 2.6 Prohibited Practices. Based on the Factual Alleg ations se t forth in Section I, Paragraph 1.9, above, Respondent is in appa rent violation of RCW 19.146.0201(1), (2) an d (7), RCW 19.146.095(1), and WAC 208-660-500(3)(a) and (b) for giving a borro wer a pre-app roval letter without having first obtained approval from a lender or creditor, or an automated underwriting system (AUS). 2.7 Requirem ent to Provide Borrowe r-Paid Servic es Disclosure. Based on the Fa ctual Allegations set forth in Section I, Paragraph 1.10, above, Re spondent is in appare nt violation of RCW 19.146.030(1) and (2)(d) for providing borrower-paid serv ice disclosures af ter the three-business day period required, and for not providi ng the disclosures a t all. 2.8 Requirement to Provide a Loan Esti m ate within Three Business Days. Based on the Factual Allegations set forth in Section I, Paragraph 1.11, above, Res pondent is in apparent violation of RCW 19.146.0201(2), (6), and (11), WAC 208-660-430(1)-(3), and Regulation Z, 12 C.F.R. §

STATEMENT OF CHARGES C-24- 3783- 25-SC 01 ARBORE TUM MORT GAGE CORP. 7 DEPARTME NT OF FINANCIAL INSTITUTIONS Divis ion of Cons umer S ervic es P.O. Box 4120 0 Olympia, WA 98504-1200 (360) 902-8 703 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1026.19(e)(1), for not providing a loan estimate w ithin three business day s of receiving an application. 2.9 Incompl ete Loan Estimate Disclo sure. Based on the Factual Allega tions set forth in Section I, Paragraph 1.12, above, Respondent is in apparent violation of RCW 19.146.0201(2), (6), and (11), and Regulation Z, 12 C.F.R. § 1026.37(a)(3), (k)(1), for not including the c reditor’s name and address on the loa n estimate, and for not including the lender or creditor’s name and NMLS number under the master heading, “Additiona l Information about this Loan.” 2.10 Require ment to Provide Home ownership Cou n seling Organizations List within Thre e Business Days. Based on the Factual Allegations set fo rth in Section I, Paragraph 1.13, above, Respondent is in apparent violation of RCW 19.146.0201(2), (6), and (11), and Regulation X, 12 C.F.R. § 1024.20(a), for not providing a homeownership counseling organ izati ons list within three business days of receiving an application. 2.11 Noncomplia nt Homeow nership Counse ling Org anizations List. Based on the Factual Allegations set forth in Section I, Paragraph 1.14, above, Re spondent is in appare nt violation of RCW 19.146.0201(2), (6), and (11), and Regulation X, 12 C.F.R. § 1024.20(a), for not providing a compliant homeownership counseling organizations list to borrowers. 2.12 Requirem ent to Provide S peci al Information Booklet. Based on the Factua l Allegations set forth in Section I, Paragra ph 1.15, above, Respondent is in apparent viol ation of RCW 19.146.0201(2), (6), and (11), and Regul ation Z, 1 2 C.F.R. § 1026.19(g), for not providing the “Your Home Loan Toolkit” booklet within three business days from receiving an application. 2.13 Privacy Notice. Based on the Factual Allegations se t forth in Section I, Paragraph 1.16, above, Respondent is in apparent violation of RCW 19.146.0201(2), (6), and (11), and Regulation P, 12 C.F.R. § 1016.4(a), for not providing privacy polic y notices to borrower s once a customer or consumer relationship is established.

STATEMENT OF CHARGES C-24- 3783- 25-SC 01 ARBORE TUM MORT GAGE CORP. 8 DEPARTME NT OF FINANCIAL INSTITUTIONS Divis ion of Cons umer S ervic es P.O. Box 4120 0 Olympia, WA 98504-1200 (360) 902-8 703 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2.14 Incomp lete Anti-Steeri ng Disclosu re. Based on the Factual Allega tions set forth in Section I, Paragraph 1.17, above, Respondent is in apparent violation of RCW 19.146.0201(2), (6), and (11), WAC 208-660-500(3)(h), and Regula tion Z, 12 C.F.R. § 1026.36(e)(3), fo r providing a document with blanks to a borrower and for having a bor rower sign a blank anti-stee ring disclosure form. 2.15 Noncompliant Loan Originat or Compensation Agreemen t. Based on the Factual Allegations set forth in Section I, Paragraph 1.18, above, Re spondent is in appare nt violation of RCW 19.146.0201(2) and (11), and Regulation Z, 12 C. F.R. § 1026.36(d)(1)(ii), for basing a loan originator’s compensation on a term of the transac tion. 2.16 Noncomplia nt Anti-M on ey Laundering Program. Based on the Factua l Allegations set forth in Section I, Paragra ph 1.19, above, Respondent is in apparent viol ation of RCW 19.146.0201(2), and (11), and 31 C.F.R. § 1029.210 for not developing an d implementing an anti- money laundering program that includes at minim um incorporating polic ies and procedures, designating a compliance officer with responsib ilities, providing on-going training for employees, and requiring independent testing. III. AUTHORITY TO IMPOSE SANCTIONS 3.1 Authority to Issue an Order to Cease and Desist or Take Affirmative A ction. Pursuant to RCW 19.146.220(3), the Director may issue order s direc ting a licensee, its employee, loan originator, independent contractor, a gent, or other person subject to the Act to cease an d desist from conducting business or take suc h other affirmative action as is ne cessary to comply with the Ac t. 3.2 Authority to Revoke License. Pursuant to RCW 19.146.220(2), the Direct or may revoke licenses for any violation of the Act. 3.3 Authority to Impose Fine. Pursuant to RCW 19.146.220(2), th e Director may impose fines against a license e, employees, independ ent contract or s, agents of licensees, or other persons subject to the Act for any violation of the Act.

STATEMENT OF CHARGES C-24- 3783- 25-SC 01 ARBORE TUM MORT GAGE CORP. 9 DEPARTME NT OF FINANCIAL INSTITUTIONS Divis ion of Cons umer S ervic es P.O. Box 4120 0 Olympia, WA 98504-1200 (360) 902-8 703 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 3.4 Authority to Collect Investigation Fee. Pursuant to RCW 19.146.228(2), WAC 208-660- 520(9) and (11), and WA C 208-660-550(4)(a), the Department will charge forty-eight dollars per hour for an examiner’s time devoted to an investi gation. 3.5 Authority to Recover C osts and Expenses. Pursuant to RCW 19.146.221(2), the Director may recover the stat e’s costs and expenses fo r prosecuting violations of the Act. IV. NOTICE OF INTE NT TO ENTER ORDER Respondent’s violations of the provisions of chapter 19.146 RCW and ch apter 208-660 WAC, as set forth in the above Factu al Allegations, Grounds for Entry of Order, and Authority to Impose Sanctions, constitute a basis for the entr y of an Or der under RCW 19.146.220, RCW 19.146.221, and RCW 19.146.223. Therefore, it is the Director’s intent to ORDER that: 4.1 Respondent Ar bor etu m Mor tga ge C orp or ati on cease and desist from conducting business in a manner that is injurious to the public or violates any provision of the Act, including violations cited in this Stat ement of Charges. 4.2 Respondent Ar bor etu m Mor tga ge C orp or ati on ’s license to conduct the business of a mortgage broker be revo ked. 4.3 Respondent Ar bor etu m Mor tga ge C orp or ati on pay a fine. As of the date of this Statement of Charges, the fine totals $27,425.00. 4.4 Respondent Arbo re tum M or tga ge C orp or at io n pa y an investigation fee. As of the date of this Statement of Charges, the investigation fee totals $2,719.20. 4.5 Respondent Ar bor etu m Mor tga ge C orp or at io n maintain records in compliance with the Act and provide the Department with the location of the books, re cords, and other information relating to Respondent Ar bor et um Mo r tga ge C orp ora ti on’s mortgage broker business, and the name, addr ess, email, and tele phone number of the individual responsible for maintenance of such records in co mpliance with the Act. 4.6 Respondent Arbo re tum M or tga ge C orp or at io n pa y the Department’s costs and expenses for prosecuting violations of the Act in an amount to be determine d at hearing or by declaration with supporti ng documentation in event of def ault by Respondent.

STATEMENT OF CHARGES C-24- 3783- 25-SC 01 ARBORE TUM MORT GAGE CORP. 10 DEPARTME NT OF FINANCIAL INSTITUTIONS Divis ion of Cons umer S ervic es P.O. Box 4120 0 Olympia, WA 98504-1200 (360) 902-8 703 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 V. AUTHORITY AND PROCE DURE This Statement of Charges is entered pu rsuant to the provisions of RCW 19.146.220, RCW 19.146.221, RCW 19.146.223, and RCW 19.146.230, and is subject to the provisions of chapter 34.05 RCW (the Administrative Pro cedure Act). Respondent may make a written request for a hearing as set forth in the NOT ICE OF OPPORTUN ITY TO DEFEND A ND OPPORTUNITY FO R HEARING accompanyi ng this S tatement of Ch arges. Dated this 24th day of July 2025. _________________ ALI HIGG S, Dir ect or Division of Consumer Services Department of Financial I nstitutions Presented by: _______________________________ LAURA J. DRABANDT Financia l Legal Examiner Reviewed by: _______________________________ KRISTINA M. SHENEFELT Financial Legal Exa miner Supervisor Approved by: _______________________________ KENDALL FREED Enforcement C hief _ AL I H I GG G G G G S D