Multistate action settles charges of continuing education fraud

Multistate action settles charges of continuing education fraud
Written by Publishing Team

More than 440 loan officers have settled charges by 44 government agencies that they fraudulently fulfilled the continuing education requirements upon which their licenses are based under state and federal law.

All participating LOs worked with Real Estate Educational Services in Carlsbad, California, a company owned by Danny Yen, a local real estate agent. He and other REES directors face separate administrative enforcement actions by officials in California, Maryland and Oregon for alleging that they issued fake certificates or took classes at other providers on behalf of loan officers.

The action will result in a total of $1.2 million in loan officer fines and the individuals involved will pay $1,000 in each state where they hold a license, according to the Conference of State Bank Supervisors, which oversees the national multi-state licensing system, the LO registry. 42 countries participated in the settlement.

“NMLS uses verification technology to make sure that the person who was supposed to take the course actually did. Through the verification process, it was determined that hundreds of mortgage loan originators did not take the courses,” said Ed Gill, Senior Deputy Commissioner for the NML Management Financial Protection and Innovation in California.

This settlement is a reminder that officials who oversee an NMLS established under the Safe and Fair Enforcement of Mortgage Licensing Act monitor the fulfillment of Vocational education requirements And Other criteria For non-banks in the industry. The current action comes almost exactly two years later settled with the accused who allegedly misused and copied questions from the NMLS exam.

“The state system will not allow bad actors to circumvent laws that have been enacted to protect consumers, and we will remain vigilant in enforcing the principles of SAFE Act,” said CSBS President and Montana Banking Commissioner Melanie Hall.

Loan officers participating in the current settlement will need to relinquish their licenses for a three-month “cooling off” period. In addition, they will need to enroll in 20 hours of pre-licensing education, eight hours of continuing education, and any other training they may be scheduled to receive, state officials who spoke at a CSBS press conference said for attendees.

The settlement stems from incidents that occurred between 2017 and 2020. So far, company-wide action has generally only been taken against individual owners who may have been loan officers involved in the alleged fraud, and the mortgages in question are considered valid, according to CSBS.

“There was no indication of consumer harm here,” said Blaine Noblet, senior advisor to the California Department of Financial Protection and Innovation. California led enforcement action.

Noblet said about 600 single contacts across the country working for a variety of lenders have been implicated in falsifying their professional education requirements due to involvement with REES, and that those who do not settle could face license revocation.

“The intent of the task force is to turn over all evidence to the states so that the appropriate states can take disciplinary action against those individuals who have not settled,” Noblet said, noting that these states so far include California, Florida, North Carolina and Oregon. and Texas.

Yen holds a license issued by the California Department of Real Estate and was a DRE approved course provider. Noblet said both approvals are currently subject to revocation procedures.


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