Former Sprout CEO Appeals Illinois License Suspension

Former Sprout CEO Michael Strauss and his new company, Smart Rate Mortgage, are fighting Illinois regulators after they suspended his mortgage license back in February. 

Strauss and Smart Rate recently filed an appeal with banking regulators in the Land of Lincoln. A spokesman for the Illinois Banking Department said the licenses will remain active pending the appeal. 

Regulators suspended the licenses on Feb. 1 after regulators said Strauss and Smart Rate failed to respond to their requests for additional information.

The department reviewed his application for a license and “became concerned that not all pertinent information regarding [his] mortgage industry background had been disclosed,” the order states. The original order does not state what prompted the review.

“The requests for administrative hearings allow the licenses to remain active during the hearing process. Administrative proceedings vary in duration and a final decision will be rendered after the proceedings are complete,” a spokesman for the Illinois Banking Department said. 

The NMLS lists Strauss as principal originator for Florida-based Smart Rate Mortgage.

He moved on to Smart Rate after he abruptly shut down Sprout Mortgage last summer.

According to sources, Strauss had a funding deal in place to save the company, but canceled it at the last minute.

Sprout is now a defendant in numerous lawsuits, including a class action suit seeking unpaid wages by former employees, and other plaintiffs seeking unpaid obligations. Sprout did not file in bankruptcy court following its closing.