MLN accused of failing to fund home loans in 8 states
Friday, January 19, 2007
Inman News
Connecticut authorities have issued a temporary cease-and-desist
order to Mortgage Lenders Network USA Inc., claiming the company made at least
97 loans in the state at the end of December that it did not fund or failed to
fund in a timely manner, imposed excessive charges on five loans it refinanced,
and employed at least 40 loan originators not registered with the state.
The cease-and-desist
order said that beginning in July, MLN also failed to fund 1,409 loans in
other states in a timely fashion, and said the company faces up to $7.6 million
in penalties.
The Hartford, Conn.-based lender shut down its wholesale
lending division in December after reportedly losing the lines of credit it needed to make
loans the company sold to investors in the secondary market.
Company officials said this month they had reached a deal
with Lehman Brothers Holdings Inc. to finance loans that were closed but not
funded, and were looking for a buyer for MLN's wholesale division while
continuing to operate a $19 billion servicing business and a smaller retail
lending division.
In a statement
today, Connecticut State Banking Commissioner Howard F. Pitkin said the cease-and-desist
order was issued after "days of negotiation between eight states and the
company in an attempt to have MLN fund as many outstanding loans as
possible."
Pitkin said the company was given time to fund nearly 400
loans outstanding nationwide before the cease-and-desist order was issued.
MLN senior
vice president and general counsel Steve Olearcek did not immediately return a
call for comment.
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Copyright 2007 Inman News
