New Day Financial LLC has settled with mortgage regulators in 43 states over allegations they helped employees with some major cribbing on critical professional licensing procedures. The Multi-State Mortgage Committee (MMC) of the Conference of State Bank Supervisors announced the consent order and settlement under which New Day will pay a $5,280,000 administrative penalty.
The case arose as a result of an examination by the state of New Hampshire followed by another conducted by the Maryland Commissioner of Financial Regulation regarding the impermissible sharing of test information for mortgage professionals as well as the practice of several New Day employees who apparently completed continuing education (CE) requirements for numerous fellow employees.
"The MMC coordinated the investigation of this matter, identifying a pattern of inappropriate conduct, and negotiated, on behalf of the participating state regulators, a resolution that will permit the company to continue to operate while ensuring compliance with all state and federal laws," said Karyn Tierney, MMC Chairman and Deputy Commissioner of the Arkansas Securities Department. "This case demonstrates the manner by which state mortgage regulators cooperate to more efficiently and effectively supervise mortgage companies, including resolving compliance issues through a coordinated enforcement action."
In addition to the financial penalties the consent order requires the removal and replacement of New Day's Chief Operating Officer; hiring of an independent auditor to evaluate the company's policies, procedures, and training and education programs, and a report from New Day within 270 days identifying the manner in which the company proposes improving its corporate management and governance structures, with an eye to best business practices for a mortgage company of its size and scope of business.