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State regulators settle with mortgage loan originators

For Immediate Release

LITTLE ROCK—The Arkansas Securities Department (ASD) and financial regulatory agencies from 42 states have reached settlements with 441 mortgage loan originators nationwide. These mortgage loan originators deceptively claimed to have completed annual continuing education as required under state and federal law.

“We have over 9,000 mortgage loan originators licensed in Arkansas who are responsible for guiding consumers through the single largest financial transaction in their lifetime, and the actions of these individuals had the potential to harm their clients, the public and the mortgage industry as a whole,” ASD Commissioner Eric P. Munson said. “Public trust in the mortgage industry is essential and this settlement shows our commitment to holding licensees accountable and protecting Arkansas consumers.”

Through the settlements, the mortgage loan originators agreed to surrender their licenses for a period of three months, pay a fine of $1,000 for each state in which he or she holds a license and take continuing education beyond Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) requirements.

“In Arkansas, consumers can be assured that their mortgages are being handled by loan originators who follow the law and are up to date in their education requirements,” Munson said.

Congress enacted the SAFE Act to enhance consumer protection and reduce fraud through minimum standards for the licensing and registration of state-licensed mortgage loan originators. The law calls on the states to implement and enforce these standards, and every state has enacted its own version of the SAFE Act that requires mortgage loan originators to have at least 20 hours of pre-licensing education and an annual eight hours of continuing education.

Danny Yen, owner of Carlsbad, Calif.-based course provider Real Estate Educational Services, is facing administrative enforcement actions for both providing false certificates and taking courses on behalf of mortgage loan originators through other education providers in violation of the SAFE Act.

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

The Staff of the Arkansas Securities Department participated in the nationwide investigation and entered into consent orders with five different mortgage loan originators for violations of the education requirements in the Arkansas Fair Mortgage Lending Act. Copies of these five orders ((C-21-0030-21-OR01, C-21-0030-21-OR02, C-21-0030-21-OR03, C-21-0030-21-OR04, C-21-0030-21-OR05) may be found on the Department’s website at www.securities.arkansas.gov.

For more information, call Karyn Tierney at (501) 324-8671.

The ASD cautions citizen investors of all ages and experiences to thoroughly scrutinize and research any investment opportunity or offer. Contact the ASD at 1-800-981-4429 to check out any person or financial professional offering an investment opportunity or investment advice for a fee and the products they offer for proper registration. Contact the ASD to report suspected fraud, inappropriate securities business practices, or to obtain consumer information. The ASD provides free investor education and fraud prevention materials in print and through educational presentations upon request.

Media Contact:

Jeanni Brosius

Public Information Coordinator

501-683-3623 desk


About Arkansas Securities Department

Charged with implementing and overseeing the Arkansas Securities Act, Arkansas Fair Mortgage Lending Act, the Arkansas Money Services Act, Arkansas Savings and Loan Act, and the Arkansas Credit Union Act, the Department regulates the sale of securities, securities brokerage firms and their agents, state-registered investment advisers and their representatives, mortgage loan companies and their loan officers, money services companies, as well as state-chartered credit unions and savings & loans. Our activities include registration, compliance, investigation of customer complaints, and consumer education.

About Arkansas Department of Commerce

The Arkansas Department of Commerce is the umbrella department for workforce and economic development drivers. Its divisions and regulatory boards include Division of Aeronautics, Waterways Commission, Wine Producers Council, Division of Workforce Services, Office of Skills Development, State Bank Department, Insurance Department, Securities Department, Economic Development Commission and Development Finance Authority. It was established July 2019 as part of Governor Asa Hutchinson’s wide-sweeping efficiency and transformation efforts to reduce 42 cabinet agencies to 15 while maintaining services for all Arkansans.

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