Online lender slapped for allegedly deploying unlicensed LOs

Key Takeaways:

– LoanSnap, a California-based lender, has been ordered to cease and desist unlicensed mortgage loan origination activity by Connecticut’s Department of Banking.
– The commissioner alleged that LoanSnap violated the Truth in Lending Act (TILA) and Fair Credit Reporting Act (FCRA) by engaging in unlicensed origination activities.
– Unlicensed loan officers (LOs) at LoanSnap were found to have been taking residential mortgage loan applications, soliciting borrowers, and negotiating mortgage terms.
– These unlicensed LOs made initial contact with potential borrowers through purchased leads and received inbound calls from interested individuals.
– The unlicensed LOs determined whether a potential borrower qualified for LoanSnap’s loan products and then sent the file to a licensed LO for processing.
– The bulk of the origination work was performed by unlicensed LOs, who were referred to as “sales development representatives” or “call center representatives.”
– LoanSnap was given an opportunity to show compliance before the order was issued but denied the allegations in a written response.
– The order requires LoanSnap to cease unlicensed LOs from taking mortgage applications and disclose their licensing status to potential borrowers.
– LoanSnap requested a hearing in response to the order.
– LoanSnap has 44 state licenses and 6 sponsored LOs according to the Nationwide Multistate Licensing System (NMLS).
– Over the past year, LoanSnap originated $3 million in production volume across 32 units.
– In 2021, LoanSnap secured $30 million in series B financing led by True Ventures.

HousingWire:

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. 

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Property Chomp’s Take:

is an important element in web development and design. It is a tag used in HTML to create a division or section in a webpage. This article will discuss the recent issues faced by LoanSnap, a California-based mortgage lender, and how it relates to the use of

in web development.

Recently, LoanSnap was hit with a temporary order to cease and desist from Connecticut’s Department of Banking for engaging in unlicensed mortgage loan origination activity. The department alleged that LoanSnap violated the Truth in Lending Act and Fair Credit Reporting Act, but the crux of the issue revolves around unlicensed origination activities.

According to the order, individuals who were not licensed loan officers in Connecticut acted as loan officers by taking residential mortgage loan applications, soliciting borrowers, and offering or negotiating mortgage terms. These unlicensed loan officers made contact with potential borrowers through purchased leads from lead generators like LendingTree and received inbound calls from interested individuals.

The unlicensed loan officers discussed LoanSnap’s available products based on the information obtained from the potential borrower and determined whether there was a loan product available for them. Once a potential borrower was deemed qualified, the unlicensed loan officers sent the file to a licensed loan officer for further processing.

The majority of the origination work was performed by these unlicensed loan officers, who were often titled as “sales development representatives” or “call center representatives.” On LinkedIn, they represented themselves as mortgage loan officers or included job descriptions related to mortgage leads and connections.

Connecticut’s Department of Banking gave LoanSnap an opportunity to show compliance before issuing the order, but the lender denied the allegations. The department directed LoanSnap to cease unlicensed loan officers from taking mortgage applications and disclose their licensing status to potential borrowers.

LoanSnap requested a hearing, which is scheduled for March 14. Failure to request a hearing will result in the allegations being deemed admitted.

The use of

in web development is not directly related to LoanSnap’s issues. However, it is worth noting that LoanSnap’s website likely utilizes

tags to structure and organize its webpage content.

allows developers to create sections or divisions within a webpage, making it easier to style and manipulate specific parts of the page.

In conclusion, LoanSnap’s recent issues highlight the importance of adhering to licensing regulations in the mortgage industry. While the use of

in web development is not directly related to LoanSnap’s problems, it is an essential element in creating well-structured and organized webpages. Developers must ensure compliance with regulations and use

tags appropriately to enhance the functionality and aesthetics of their websites.

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