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California-based mortgage company loanDepot has agreed to a $1 million settlement with the Massachusetts Division of Banks over allegations that it acted as a third-party mortgage servicer without registering with the state.
As part of its agreement with the DOB, loanDepot will pay $1 million to the Commonwealth of Massachusetts Mortgage Education Trust and establish internal policies to ensure that it does not engage in business activities that require licensing or registration, according to the consent order, which was dated Dec. 30.
In addition to loanDepot, the consent order referenced mello, the company’s digital-first operating unit launched in 2022, and LDWholesale, the company’s wholesale lending channel that it has since exited.
LoanDepot has been licensed in Massachusetts since 2010 for mortgage broker and mortgage lender activities.
The company has also applied to register for third-party mortgage servicing several times, according to the consent order. Each time loanDepot applied for third-party mortgage servicing registration – in 2014, 2016, 2019 and 2021 – the application was voluntarily withdrawn, usually a few months later. In one instance, 2014, it was withdrawn after a couple of weeks.
The Massachusetts DOB said in the consent order that it learned in September 2022 that loanDepot had acted as a third-party mortgage servicer in the state.
“[U]pon being made aware that a third party loan servicer registration was required to engage in its activities, loanDepot immediately cooperated with the Division’s inquiry in an effort to promptly resolve its concerns,” the consent order said.
LoanDepot waived its right to a hearing, the consent order said, and the company did not admit or deny the allegations. It also waived rights to appeal the settlement.
The company can apply for licenses in the future, and “any such application shall not be denied solely as a result of any of the issues resolved by this Consent Order or because loanDepot entered into this Consent Order,” the DOB said.
The DOB said it has no other consent agreements with loanDepot. The settlement does not prevent other state agencies from taking actions against loanDepot.
