DFI Interpretations of Mortgage Broker Practices Act Strain Credulity
DFI Interpretations of Mortgage Broker Practices Act Strain Credulity
Several months ago I wrote that the Department of Financial Institutions was erroneously asserting that it has regulatory authority over staff employed by attorneys who are exempt from the MBPA if those staff persons are not themselves exempt attorneys. General legal opinion for years is that staff of attorneys share the status of the attorney they work for. The meaning of the relevant section of the MBPA is plain upon its face, necessarily exempting staff of attorneys. To hold that the staff of an exempt attorney is themselves not exempt, as the Department does, would lead to a ridiculous result, where attorneys could not utilize their own staff to assist them in their endeavors, ranging from paralegals to legal secretaries and other lay people.One instance of that erroneous interpretation by DFI has led to others. DFI has now charged other staff of exempt attorneys with unlicensed activities. In one recent instance, DFI is investigating a licensed real estate broker who was acting as a consultant to the exempt attorney. That real estate broker neither met with nor received any money from clients of the attorney. Further, the attorney had contacted DFI prior to retaining the consultant and was told that the consultant should surrender her mortgage loan originator license in order to fulfill the consulting role. Once she did so, she was investigated for unlicensed activity!The other interesting aspect to this bizarre regulatory action is that the charges do not seem to be initiated by consumer complaints. Rather, it appears that a Seattle based real estate attorney has been active in “turning in” her competitors to her associates at DFI.You should seek legal representation immediately if you receive a statement of charges or notice of investigation from the Department of Financial Institutions, the Department of License, or the Department of Health. The attorneys at the Rosenberg Law Group, PLLC offer a free consultation and are experienced at negotiating with regulatory bodies and litigating in administrative hearings.Call now for a free consultation at (206) 407-3300 or write to us at info@rosenberglawgroup.net
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