Executives at a mortgage banking firm are accused of collecting information about test exams and passing them on to loan originators. A multi-million-dollar, multi-state settlement includes the ouster of the chief operating officer.
New Day Financial LLC has reached a settlement with 43 state regulators. In addition, it was hit with a consent order.
The
Fulton, Md.-based company, which does business as NewDay USA, is accused of impermissible sharing of test information for mortgage professionals.
In addition, according to the
Multi-State Mortgage Committee, several NewDay employees are accused of a practice of completing continuing education requirements for other employees.
A former employee of the company filed a complaint with the
State Regulatory Registry LLC in October 2013 alleging violations of the Nationwide Mortgage Licensing System’s rules of conduct.
“Specifically, the complainant alleged that the director of training for New Day encouraged MLOs to report information that they acquired while taking the SAFE mortgage loan originator test for the purpose of updating New Day’s internal test preparation materialsm,” the settlement states. “Additionally, the complainant alleged that a senior vice president and account executive at New Day shared with MLOs employed at New Day the answers to quizzes and/or tests that are included in the NMLS approved pre-licensure and continuing education courses. Sharing this information allowed those MLOs to more quickly complete the courses and to circumvent the intent of the courses.”
An examination by the state of New Hampshire prompted a subsequent investigation coordinated by the
Multi-State Mortgage Committee and conducted the by the Maryland Commissioner of Financial Regulation.
The investigation found “pattern of inappropriate conduct,” Karyn Tierney, who is chair of the committee and deputy commissioner of the Arkansas Securities Department, said in the announcement.
Tierney explained that the settlement enables NewDay to continue compliantly operating.
But the cost to NewDay was a $5.28 million administrative penalty.
In addition, the company’s COO was fired and replaced.
NewDay will hire an independent auditor to evaluate its policies and procedures. The auditor has 270 days to report findings.
The auditor will also review the company’s training and education
programs to determine whether additional remedial action is needed.
NewDay, itself, will be required to provide a report within 270 days detailing how it intends to improve corporate management and government structures.
NewDay declined to appeal the review committee’s determinations in May 2014.
In February, the Consumer Financial protection Bureau
issued a consent order against NewDay Financial LLC for allegedly deceiving consumers about an endorsement it received from a veterans’ organization and participating in a scheme that paid kickbacks for referrals — in violation of the Real Estate Settlement Procedures Act.
