CA Consent Order over Unlicensed Mortgage Loan Origination Activity

A residential mortgage lender recently agreed to a consent order with the California Department of Financial Protection and Innovation (DFPI) to resolve allegations of unlicensed mortgage loan origination activity.  The DFPI found (and the lender neither admitted nor denied) that between 2021 and 2022, unlicensed and non-loan officer employees of the mortgage lender at a since-closed California branch engaged in activity that required a mortgage loan originator license.

The mortgage lender agreed to pay a $160,000 penalty; to undergo an independent compliance audit regarding the allegations, and pay an additional penalty of $500 per employee that the audit may identify as having engaged in unlicensed loan origination activity with respect to California since 2023; and to adopt enhanced policies and procedures to ensure compliance with California licensing requirements.