Mortgage broker with local offices to pay fines
Challenge Financial Investors Corp., a Fla.-based lender with offices in Greensboro and Winston-Salem, has agreed to pay $848,000 to settle allegations of poor supervision and controls in its mortgage operations, according to the N.C. Office of the Commissioner of Banks.
The state banking commissioner claims Challenge solicited and accepted more than 100 mortgage applications from individuals unlicensed to do business in North Carolina. The banking office also claims Challenge failed to appropriately supervise and control loan officers at some of its 19 branches in this state.
According to the banking commissioner, Challenge ran a "net branch" company, allowing loan officers to work with little supervision as long as they paid a small fee for each loan originating in the company's name. This sort of action was held in violation of the state's Mortgage Lending Act in 2003, the NCCOB reports.
As part of its settlement, Challenge will pay the state banking office $27,525 to cover investigative costs, in addition to the $848,000 civil penalty. The lender also has agreed to measures including evaluation of its branch manager and loan officers and installation of a software program to detect, identify and fine unlicensed individuals who try to originate loans.
The state investigation found no evidence that the company employed abusive loan terms.