Allied Business Schools real Estate Licensing Discussion
On August 12, 2014, the Consumer Financial Protection Bureau (CFPB) took action against AmerisaveMark Smith had been in the mortgage business for over seven years before finally opening his owncompanyMark Smith Mortgage (MCM) as a CRMLA-licensed mortgage lender. The main focus of hisbusiness was to originate and fund federally related residential mortgage loans.
Mark was careful to follow all of the rules and regulations required under the California Financial Code forCRMLA-licensed lenders. For example, MCM conspicuously displayed the licenses of the sponsoredmortgage loan originators at the authorized place of business. In addition, he made sure to supervise thelending activities of every mortgage loan originator that MCM sponsored. To meet this goal, Markmonitored the phone calls of his sponsored MLOs, reviewed their paperwork for accuracy, and checkedall advertising to be sure that there were no misleading statements being made to borrowers.
Olive, the office manager, was in charge of handling administrative and accounting tasks. She set up asystem to keep MCM’s books, accounts, and records in compliance with the DBO Commissioner’s rulesand regulations.
The residential real estate market finally improved and business was booming. Mark was busy hiring andtraining new MLOs, both CRMLA mortgage loan originators and licensed California real estate agentswith the MLO license endorsement. In addition to her current duties, Mark asked Olive to monitor thelicenses of all the sponsored MLOs to be sure the licenses were current and in compliance with theNMLS. With over 200 sponsored MLOs, Olive was having difficulty keeping up with all of herresponsibilities, so she set up a system to track the MLO licenses.
Imagine his shock when during a regulatory examination conducted by the DBO Commissioner, Mark wasinformed that some of his sponsored MLOs had inactive licenses. In fact, one person who was a licensedreal estate broker with the MLO endorsement had not renewed her real estate license.
What was MSM’s violation and what enforcement action(s) could the DBO Commissioner take againstMike Smith Mortgage?
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