Of that group, 2,201 had committed a financial crime such as mortgage fraud, money laundering, or worse, but still managed to enter the business with little or no opposition.
This could be attributed to the fact that loan originators aren’t subject to the same licensing requirements as mortgage brokers, and as such, are significantly less regulated.
The Herald found that more than half of the 120,563 “mortgage professionals” registered in Florida joined the troubled industry this decade without being state-licensed.
But even mortgage brokers managed to find work in the industry as loan originators after having their licenses stripped or denied, with some knowingly circumventing the law.
One former broker who had previously committed $4 million in mortgage fraud in the state of Maryland wittingly applied as a loan originator, knowing this would be his only way back in.
Interestingly, that broker is now in charge of compliance at the firm he works for, though he rationalizes that he’s the best man for the job because of his checkered past.
The investigation, which utilized court documents, state industry reports, police reports, and internal e-mails, found that one in five loan originators at 30 mortgage lenders that employed 50 or more workers had a criminal background.
Good to know…