Danny Yen, the mortgage educator who orchestrated a scheme that helped more than 600 originators flout continuing education laws on the state and federal levels, has settled with regulators in exchange for a $75,000 fine and a lifetime ban on teaching mortgage-related courses.
Multiple agencies, spearheaded by the California Department of Financial Protection and Innovation (DFPI), launched a multiyear investigation after software found that hundreds of loan originators who claimed to have fulfilled their annual continuing education requirements had not actually done so. At the center of the probe was Yen’s company — Carlsbad, California-based Real Estate Educational Services (REES). Through REES — which the settlement named as a “fictitious business” — Yen was found to have either given originators credit for classes they hadn’t actually taken or, in some cases, to have taken classes with other education providers.
In exchange, Yen received undisclosed amounts of monetary payments through various methods. Now, in addition to accepting financial penalties and teaching restrictions, Yen and his family — including wife Wendy and father Dat, both of whom were named as directly participating in activities through REES — have agreed to cooperate with all ongoing investigations by the various state mortgage regulators still working the case.
While more than 400 originators have signed settlements for their participation in the scheme, many others have not. These individuals remain under investigation by several state agencies and may face further penalties of their own.
Yen also is banned from completing mortgage education courses on behalf of any other individual. Failure by Yen or his family to abide by the terms of the settlement would result in a steep noncompliance penalty of $15 million.
“This settlement will allow California and other regulators to discipline the remaining loan originators, while the lifetime teaching restrictions send a strong message that we will not allow fraud,” said Clothilde Hewlett, commissioner of the California DFPI.
