Hawaii, 42 other states reach settlements with hundreds of mortgage loan originators

Financial regulatory agencies across the country reached settlements with hundreds of mortgage loan originators, including 15 with Hawaii licenses, who deceptively claimed to have completed education requirements under state and federal law.

The state Department of Commerce and Consumer Affairs’ Division of Financial Institution, in a news release today, said it joined 42 other states to reach settlements with a total of 441 mortgage loan originators nationwide who said they completed the requirements.

“The DFI takes these violations seriously as these education requirements provide important information about Hawaii’s mortgage laws,” said Financial Institutions Commissioner Iris Ikeda in a statement. “We want to assure consumers who used these mortgage loan originators that their mortgages are valid and in force, as the violations did not affect the integrity of the mortgages.”

U.S. Congress enacted the Secure and Fair Enforcement for Mortgage Licensing Act, also known as the SAFE Act, to improve consumer protection and reduce fraud through the minimum standards for licensing and registration of state-licensed mortgage loan originators. It requires originators to have a least 20 hours of pre-licensing education and eight annual hours of continuing education.

Through the settlements, the loan originators agreed to surrender their licenses for three months, pay a fine of $1,000 for each state in which they hold a license and take continuing education beyond SAFE Act requirements.

The irregular education activity was discovered through an authentication tool called BioSig-ID, which is used to monitor the online courses approved under the SAFE Act.