Olympia – The Washington State Department of Financial Institutions (DFI) and financial regulatory agencies from 41 other states reached settlements with 441 mortgage loan originators (MLOs) nationwide who deceptively claimed to have completed annual continuing education as required under state and federal law.
“By requiring Washington's MLOs to meet both pre-licensing and annual education requirements, including state-specific requirements, we protect consumers, and create a level playing field for mortgage professionals,” DFI Director Charlie Clark said. “We do not tolerate MLOs shirking their education requirements. Our strong multi-state regulatory system caught the sophisticated cheating scheme.”
“In Washington’s robust housing market, hundreds of MLOs come into the market monthly and 105 individuals tried to short-cut their education requirements,” DFI Consumer Services Director Lucinda Fazio added.
Through the settlements, the mortgage loan originators agreed to surrender their licenses for a period of three months, pay a fine of $1,000 for each state in which they were issued a license and take continuing education beyond Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) requirements.
Congress enacted the SAFE Act to enhance consumer protection and reduce fraud through minimum standards for the licensing and registration of state-licensed mortgage loan originators. The states implement and enforce these standards, and every state requires mortgage loan originators to have at least 20 hours of pre-licensing education, and a minimum of an annual eight hours of continuing education.
Danny Yen, owner of Carlsbad, Calif.-based course provider Real Estate Educational Services, is facing administrative enforcement actions for both providing false certificates and taking courses on behalf of mortgage loan originators through other education providers in violation of the SAFE Act.
The irregular education activity was discovered through a gesture-driven authentication tool called BioSig-ID, which is used to monitor all online courses approved under the SAFE Act mandate.