Illinois Joins Multistate Action Against Mortgage Loan Originator for Education Fraud (Chicago, IL) – Illinois regulators have joined a multistate enforcement action against a mortgage loan originator accused of falsely claiming credit for mandatory education courses, a violation of federal and state consumer protection laws.
The Illinois Department of Financial and Professional Regulation, along with financial regulatory agencies in 20 other states, reached a settlement with Patrick Terrance Donlon, a mortgage loan originator formerly employed by Trusted American Mortgage LLC. Regulators alleged Donlon directed another individual to complete required education courses on his behalf and then claimed the credit as his own.
Under the settlement, Donlon will pay a total of $31,000 in fines and faces widespread restrictions on his ability to practice. He agreed to surrender his Illinois mortgage loan originator license and is permanently barred from holding such a license in the state. He is also prohibited from serving as a control person for an Illinois residential mortgage licensee for two years.
“The Department takes misconduct by licensees very seriously and will act to ensure Illinois residents are protected from unlawful practices,” IDFPR Secretary Mario Treto Jr. said in a statement. “When individuals misrepresent their qualifications or evade required standards, the Department will hold them fully accountable.”
Mortgage loan originators are licensed through the Nationwide Multistate Licensing System, which is operated by the Conference of State Bank Supervisors on behalf of state financial regulators. At the time of the violations, Donlon was licensed in 19 states and had pending license applications in two others.
State regulators said Donlon’s actions violated the Secure and Fair Enforcement for Mortgage Licensing Act, known as the SAFE Act. Congress enacted the law to reduce fraud and strengthen consumer protections by establishing minimum education and licensing standards for mortgage loan originators. Under the act, originators must complete at least 20 hours of pre-licensing education and eight hours of continuing education annually.
Division of Banking Acting Director Susana Soriano said the enforcement action underscores the importance of those requirements.
“We require that licensed professionals complete their continuing education to ensure our licensees have the highest levels of competence and ethics,” Soriano said. “With this action, the residential real estate market in Illinois has been protected and consumers can continue to expect the highest levels of professional service from their licensed mortgage loan originators.”
Regulators in Arkansas, Colorado, Florida, Iowa, Kansas and Texas led the investigation. In addition to Illinois, states participating in the settlement include Arizona, Arkansas, California, Colorado, Florida, Idaho, Iowa, Kansas, Maryland, Michigan, Minnesota, Montana, New Mexico, Oklahoma, Ohio, Oregon, South Carolina, South Dakota and Texas.
Under the agreement, Colorado and Florida will each receive $7,000 in fines, while most other participating states will receive $1,000. Maryland and New Mexico will not receive fines because Donlon only had pending license applications in those states.
Donlon is permanently barred from licensure as a mortgage loan originator in all participating states except Colorado and Florida, where he may reapply after two years if he satisfies additional education requirements and pays all administrative penalties. He is also barred for two years from serving as a qualified individual or control person for any financial services entity registered with the Nationwide Multistate Licensing System and has been removed from those roles at Trusted American Mortgage LLC.
The Illinois Department of Financial and Professional Regulation oversees licensing and regulation for more than 1.2 million professionals across 120 industries, while the Conference of State Bank Supervisors represents state financial regulators nationwide and operates the Nationwide Multistate Licensing System.
Illinois Joins Multistate Action Against Mortgage Loan Originator for Education Fraud
