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400 Mortgage Loan Originators Caught Trying To Skip School

Katie Jensen
Jan 19, 2022
Shady Business Deal

400 mortgage loan originators nationwide deceptively claimed to have completed their annual continuing education as required by state and federal law.

KEY TAKEAWAYS
  • Forty-four state financial agencies, led by the DFPI, reached a settlement with more than 400 mortgage loan originators nationwide who deceptively claimed to have completed their annual continuing education classes.
  • The owner of Carlsbad, a California-based course provider in Real Estate Educational Services, is now facing administrative enforcement action for providing false certificates and taking courses on behalf of mortgage loan originators.
  • The SAFE Act was enacted by Congress to enhance customer protection and reduce fraud through minimum standards for the licensing and registration of state-licensed mortgage loan originators.
  • These perpetrators were able to be identified “through a gesture-driven authentication tool” called BioSig-ID.

Forty-four state financial agencies, led by the California Department of Financial Protection and Innovation (DFPI), reached a settlement with more than 400 mortgage loan originators nationwide who deceptively claimed to have completed their annual continuing education as required by state and federal law, according to a press release by CSBA.

The owner of Carlsbad, a California-based course provider in Real Estate Educational Services, is now facing administrative enforcement action for providing false certificates and taking courses on behalf of mortgage loan originators through other education providers, thus violating the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act). 

The SAFE Act was enacted by Congress to enhance customer protection and reduce fraud through minimum standards for the licensing and registration of state-licensed mortgage loan originators. Every state has a slightly different version of the SAFE Act but ultimately requires 20 hours of pre-licensing education and an annual eight hours of continuing education.   

“State financial regulators do not take these violations lightly,” said CSBS chair and Montana commissioner of banking and financial institutions, Melanie Hall. “Through states’ collective action, consumers can be assured that their mortgages are being handled by loan originators who follow the law and are up to date in their education requirements.” 

Through the settlement, these 400 mortgage loan originators have agreed to surrender their license for a period of 3 months, pay a fine of $1,000 for each state in which he or she holds a license, and take continuing education beyond federal and state SAFE Act requirements.  

These perpetrators were able to be identified “through a gesture-driven authentication tool” called BioSig-ID, which monitors all online course work it approves under the SAFE Act mandate. 

“Mortgage loan originators are responsible for guiding consumers through the single largest financial transaction in their lifetime,” said DFPI commissioner, Clothilde V. Hewlett. “California will continue to lead on efforts that protect consumers and ensure fairness and resilience in our markets. I am proud of the Department and the historic 44 state-agency effort that, with these actions, remind the mortgage industry of their obligations to be ethical, honest and forthright.” 

More information on CSBA enforcement actions can be found in the REES background document. 

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