A regulator in Illinois has suspended the MLO license of industry veteran Michael Strauss and the license of his mortgage company, smart rate mortgage, essentially preventing the company from operating in the state, as per Nationwide Multistate Licensing System (NMLS).
Thank you for reading this post, don't forget to subscribe!In Illinois, the Department of Banking at the Department of Financial and Professional Regulation issued the order on February 1. The decisions are valid until Strauss and Smart Rate respond to requests for information.
HousingWire reported in January that Strauss, the industry veteran who abruptly closed the nonqualified mortgage lender sprout mortgage Back in July, a new mortgage company called Smart Rate was set to launch.
“The Department, upon further review of Strauss’s MLO license application, became concerned that all relevant information regarding Strauss’ mortgage industry background was not disclosed,” Department Director Chase Rehwinkel wrote in the order.
Regarding the Smart Rate, Rehwinkel said the department was concerned that all pertinent information regarding the owner’s background in the industry was not provided, “which includes, but is not limited to, the owner’s experience with real estate finance.” Is.”
Strauss Registered Smart Rate, With a start date of August 1, 2022, in Florida, according to the NMLS. The company received a residential mortgage broker license in Illinois on November 1, 2022. Strauss’s MLO license in the state was issued on December 28.
However, according to Florida Limited Liability Company, the corporate entity for Smart Rate is registered in Florida for his wife, Beth Strauss. The address listed in the incorporation documents is 610 Park Avenue, New York, a residential property that Strauss is trying to sell for $26.5 million.
Illinois’ department said it sent a request for information on Strauss’ background on January 12. This included questions about his previous companies, lawsuits and orders from other state and federal agencies.
For the Smart Rate, questions included the owner’s experience with real estate finance, duties with the company, and relationship with employees and other affiliations.
The deadline for Strauss and Smart Rate to respond to the inquiry was January 19, but they failed to respond. The department issued a show cause rule on January 23, allowing it to reply till January 30. He again did not provide the information sought.
background
Strauss was accused in 2009 Securities and Exchange Commission (SEC) with accounting fraud. The SEC alleged that Strauss engaged in a pattern of false and misleading claims, causing financial losses to investors. Strauss agreed to a $2.45 million settlement in the case.
Six years later, he founded Sprout, a mortgage lender focused on nonqualified mortgages. The company had posted huge losses last year amid rising mortgage rates. Struggled to sell in the secondary market loans originating at 2-4% when investors were demanding higher premiums.
Strauss fired the employees in July 2022 without issuing severance pay or their final paychecks. He reportedly canceled his health insurance through May 2022, reportedly leaving some on the hook for substantial medical bills. The executive has been the target of several lawsuits from former employees, vendors and business partners.
