Online lender slapped for allegedly deploying unlicensed LOs


California-headquartered LoanSnap was hit with a temporary order to cease and desist from Connecticut’s Department of Banking for “systemic” unlicensed mortgage loan origination activity.

Connecticut Banking Commissioner Jorge Perez alleged that LoanSnap violated the Truth in Lending Act (TILA) and Fair Credit Reporting Act (FCRA). But the crux of the commissioner’s findings focuses on unlicensed origination activities.

From at least August 29, 2022 to December 2, 2022, individuals who were not licensed as loan officers (LOs) in Connecticut acted as LOs by taking residential mortgage loan applications, soliciting Connecticut borrowers for mortgages and offering or negotiating terms of mortgages, according to the order issued earlier this month. 

Unlicensed LOs made the first contact with a potential borrower by using purchased leads from lead generators, such as LendingTree, to make outbound calls to potential borrowers. These individuals also received inbound calls from individuals interested in obtaining mortgage loans, the order stated.

The commissioner alleged unlicensed LOs discussed the available products offered by SnapDoc based on the information obtained from the potential borrower. The individuals then made an initial determination as to whether there is a loan product available to the potential borrower.

Once an unlicensed LO deemed a potential borrower qualified for one of LoanSnap’s loan products based on the information gathered – via text, electronic mail, telephone call and additional verification documentation he or she required the potential borrower to submit – the unlicensed MLO then sent the file to a licensed LO. 

The bulk of the origination work was performed by unlicensed LOs, generally titled as “sales development representatives” or “call center representatives,” according to commissioner Perez.

On LinkedIn, unlicensed individuals represented their job titles as a “mortgage loan officer” or included job descriptions including “prequalified inbound leads for the senior mortgage loan officers – over 100 calls per day” or “connection point between potential mortgage and refi-takers,” the order stated.

Connecticut’s Banking Department provided LoanSnap an opportunity to show compliance for the retention of its mortgage lender license in Connecticut before issuing the order but received a written response from the lender denying the allegations asserted in the compliance letter.

Perez directed LoanSnap to cease unlicensed LOs from taking any mortgage applications and for unlicensed LOs to disclose their Connecticut licensing status to a potential borrower, the regulator said.

A hearing – scheduled for March 14 – was granted to LoanSnap within 14 days following the lender’s receipt of the temporary order to cease and desist and a failure to request a hearing will result in the allegations deemed admitted, according to the order.

LoanSnap requested a hearing, according to Connecticut’s Department of Banking.

LoanSnap didn’t respond to HousingWire’s requests for comment. 

The California-headquartered lender has 44 state licenses with 6 sponsored LOs, according to the Nationwide Multistate Licensing System (NMLS). 

LoanSnap originated $3 million in production volume over the past year across 32 units, data from mortgage technology platform Modex showed. 

In 2021, LoanSnap secured $30 million in series B financing led by True Ventures. Also participating in the funding included prior investors Baseline Ventures, Richard Branson’s Virgin Group, and MANTIS, according to the company’s previous release. 



Source link

About The Author