A Southern California mortgage brokerage has reached a settlement with four states over claims of wrongdoing that included several allegations of unlicensed lending activity.
E Mortgage Capital, based in Irvine, California, agreed to settle with banking supervisors of Hawaii, Idaho, Oregon and Texas in late September following a multistate investigation that began in late 2023.
In their examinations, regulators determined E Mortgage allowed unlicensed loan officers in their states to originate and earn commissions on 50 different transactions. The alleged violations took place between 2021 and 2023. Idaho and Texas officials also claimed unlicensed loan processors performed functions that should have been prohibited in their states in over 125 instances.
Other infractions spelled out by examiners include E Mortgage’s failure to cooperate or respond to inquiries, and Texas officials’ assertions of “improper and deceptive or dishonest dealings.” Regulators in Oregon also cited the brokerage’s remote work-from-home plan, which it said lacked adequate inspections and insufficient supervision of loan officers.
With the settlement, E Mortgage will pay financial penalties totaling $669,000. The brokerage also agreed to cease mortgage originations coming via unlicensed loan officers and processing activity involving ineligible employees.
The company neither admitted nor denied liability or fault through the agreement, which was signed as a compromise “to avoid the cost, burden, disruption, and uncertainty of further proceedings,” according to the legal documents signed by E Mortgage on Sept. 22.
In a statement sent to National Mortgage News, company leadership emphasized the changes, including enhanced systems and compliance protocols, that the brokerage had implemented in the years since the allegations surfaced.
“While we may not necessarily agree with every finding, we view this as an opportunity to keep improving,” wrote E Mortgage Capital Chair and President Sam Hijazin.
“We take our responsibility to our clients and to our regulators very seriously. We fully respect the important role that state regulators play in protecting consumers and upholding the integrity of the mortgage industry, and we remain committed to full compliance with all applicable laws,” Hijazin added.
In May, the mortgage broker celebrated its growth this year in a press statement, pointing to its partnership with 80 different wholesale lenders and $470 million in April volume. The company also said it had added 41 loan officers, including some new to the industry.
Regulatory focus turns toward states
The settlement comes as the mortgage industry’s eyes carefully at scrutiny and enforcement coming out of state regulators as federal oversight eases under the current Trump administration.
Earlier this year, Washington State officials fined Xpert Home Lending for violations of its consumer banking laws following the company’s failure to license five branches. Regulators threatened to rescind Xpert’s authorization to conduct business in the state on the grounds of any future noncompliant activity.
Last month, Connecticut’s banking commissioner also revoked the mortgage lending licenses belonging to a suburban Hartford brokerage and its two leaders after evidence of shoddy recordkeeping and misleading statements were uncovered. Unlicensed origination activity was not a factor in the Connecticut case.
