1 minute read
A California regulator has revoked the residential mortgage lending license of LoanSnap, the latest in a series of difficulties for the fintech lender.
According to a filing from the California Department of Financial Protection and Innovation dated Oct. 18, LoanSnap had its license revoked after it failed to renew its surety bond. That policy, which is designed to protect consumers from lender fraud and financial risk, expired in early August.
The department said it issued documents to LoanSnap within two weeks of that date, stating that the license would be revoked, and the company has yet to respond to request a hearing.
LoanSnap did not immediately respond to HousingWire‘s request for comment.
The company — which is headquartered in Costa Mesa, California — also lost its mortgage lender license in Connecticut earlier this month. The fintech was first licensed to do mortgage business in Connecticut in January 2021 and applied for a renewal in December 2023. The request was pending, but the license was suspended in July.
A consent order signed by a Connecticut banking commissioner said that LoanSnap failed to notify the Nationwide Multistate Licensing System (NMLS) that its main address had changed. The company was evicted in May from its office in Southern California, with the landlord seeking unpaid rent of more than $530,000.
The Connecticut consent order also noted that the firm didn’t provide a surety bond and falsely reported that it did not have any unsatisfied judgments or liens against it. But LoanSnap has been the target of several lawsuits in the past year.
These actions include a Wells Fargo suit filed in Minnesota, where the bank sought more than $430,000 over an alleged breach of contract. LoanSnap also faced civil actions from Mortgage Capital Trading, South Street Securities, Anderson Tax and Optimal Blue, with the total judgment in these cases topping $1.1 million.
HousingWire also reported in January that LoanSnap was hit with a cease-and-desist order in Connecticut due to allegations of unlicensed origination activity that took place during a period of several months in 2022. The state’s banking commission also charged the firm with violations of the Truth in Lending Act and the Fair Credit Reporting Act.
Founded by Karl Jacob and Allan Carroll in 2017, LoanSnap raised $100 million in seed funding from investors such as Richard Branson’s Virgin Group; former NFL star Joe Montana’s Liquid 2 Ventures; and LinkedIn co-founder Reid Hoffman.
The firm offers “smart loans” using artificial intelligence and developed a cloud-based portal, LoanFlow, that aims to give mortgage brokers and loan officers the ability to originate loans anytime, anywhere.
