Flag of the District of Columbia (Courtesy of dpw.dc.gov)
Flag of the District of Columbia (Courtesy of dpw.dc.gov)

The D.C. Department of Insurance, Securities and Banking (DISB), joining 41 states with similar agencies, has reached settlements with 441 mortgage loan originators throughout the country that the department said deceitfully claimed to have completed annual continuing education classes as required by state and federal law.

“I am pleased that DISB was able to work collaboratively with its fellow regulators from across the country to reach this settlement,” said DISB Commissioner Karima M. Woods. “As regulators, it is imperative that we take every action necessary to protect consumers, ensure their financial well-being, and hold the mortgage industry to the highest ethical standard.”

Congress enacted the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act to increase consumer protection and reduce fraud through minimum standards for the licensing and registration of state-licensed mortgage loan originators. The law empowers states to implement and enforce those standards.

The District and all states have enacted their own version of the SAFE Act mandating mortgage loan originators to have at least 20 hours of pre-licensing education and an annual eight hours of continuing education.

Specifics of the settlement include the mortgage loan originators agreeing to forfeit their licenses for three months, pay a fine of $1,000 for each state in which he or she holds a license and takes continuing education courses beyond the SAFE Act requirements.

An example of the fraud is the Real Estate Educational Services, a California-based course provider, that provided false certificates to mortgage loan originators who had never attended nor completed the in-person and online continuing education course that they enrolled in. As a result, REED is facing administrative penalties.

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