Consent Order  Consent Order: Michael Rakeman

Date:	01/03/2022
Organization:	Division of Banks

WHEREAS, Michael Rakeman (“Respondent”) is engaged in the activity of a mortgage loan originator and assigned an NMLS identifier number of 40481.

WHEREAS, the States, Commonwealths, and/or Territories of Arizona, California-DFPI, Connecticut, District of Columbia, Illinois, Indiana-DFI, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Jersey, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina-BFI, Texas-SML, Washington, and Wisconsin (individually, a “Participating State,” and collectively, the “Participating States”) have each agreed, through its respective state mortgage regulatory agency, to negotiate and enter into this Settlement Agreement and Consent Order (hereinafter referred to as the “Agreement” or “Order”).

WHEREAS, the state mortgage regulators of the Participating States(hereinafter referred to individually as a “State Mortgage Regulator,” and collectively as the “State Mortgage Regulators”) are respective members of the Conference of State Bank Supervisors(“CSBS”) and the AmericanAssociationof Residential Mortgage Regulators (“AARMR”) and have agreed to address enforcement concerns with Respondent in a collective and coordinated manner, pursuant to their respective statutory authorities, and in accordance with the protocols established by the CSBS/AARMR Nationwide Cooperative Protocol for Mortgage Supervision as well as the Nationwide Cooperative Agreement for Mortgage Supervision (collectively, the “CSBS/AARMR Protocol and Agreement”).The State Mortgage Regulators and Respondent are collectively referredto herein as the (“Parties”).

WHEREAS, Respondent is licensed as a mortgage loan originator under the respective laws of each Participating State, or, where applicable, has obtained an endorsement from a Participating State to engage in loan origination activity as part of Respondent’s pre-existing authority to engage in regulated activity under a different licensing regime (“MLO Activity Endorsement”).

WHEREAS, the State Regulatory Registry LLC (“SRR”), a wholly owned subsidiaryofCSBS,ownsandoperatestheNationwideMultistateLicensingSystem& Registry (“NMLS”).SRR administers pre-licensure (“PE”) and continuing education (“CE”)andUniform State Test protocols.Title VofPublic Law110-289,the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the “SAFE Act”), requires that state-licensed mortgage loan originators (“MLOs”) complete PE prior to initial licensure andannualCEthereafter.InordertomeetPErequirementscontemplatedundertheSAFE Act,state-licensedMLOsmustcomplete20hoursofNMLS–approvededucation.Inorder to meet CE requirements contemplated under the SAFE Act, state-licensed MLOs must complete eight hours of NMLS approved education.

WHEREAS, the Mortgage Testing and Education Board (“MTEB”), which was created by SRR, has approved “Administrative Action Procedures for S.A.F.E. Testing and Education Requirements” and NMLS-Approved course providers (“AAP”), which extends administrative authority to the MTEB to investigate alleged violations of the NMLS Rules of Conduct (“ROC”).The AAP also extends administrative authority tothe MTEB/SRR to investigate alleged violations of the NMLS Standards of Conduct (“SOC”), which apply to all NMLS-Approved course providers.

WHEREAS, in late 2020, MTEB obtained information concerning suspicious activity and that information identified a possible MLO education cheating scheme coordinated by and implemented through Danny Yen, d/b/a Real Estate Educational Services,anNMLS-ApprovedcourseproviderthatisassignedanNMLS-Approvedcourse provideridentifiernumberof1405046(“REES”).Basedonthatinformation,andpursuant totheAAP,theInvestigativeReviewCommittee(“IRC”)approvedopeningandpursuing an investigation into this matter.

WHEREAS,SRR’sIRCissuedamemorandumreportonitsinvestigationintothe REEScoordinatedMLOeducationfraudscheme.TheIRCfoundthatREESfraudulently providedcoursecredittoMLOswhohadneverattendedandcompletedREES’seight-hour in-personCEcourseinWestminster,California(the“In-personEducationScheme”).The IRC also found that REES helped MLOs cheat on online PE and/or CE courses by taking those courses on behalf of those MLOs (the “Online Education Scheme”).In eachof the schemes orchestrated by REES, the MLOs accepted credit for SAFE-Act-required education courses that they had either not taken or completed on their own behalf in violationoftheROC,andstateandfederallaw(collectively,the“MLOEducation Schemes”).

WHEREAS,basedontheinitialfindingsoftheIRC,pursuanttothe CSBS/AARMRProtocolandAgreementthismatterwasreferredfromthe IRCforfurther investigation and possible enforcement action, and to which the CSBS Non-DepositorySupervisory Committee authorized the creation of a regulator taskforce to coordinate the multi-stateinvestigationandenforcementactivityinthismatter(“REESRegulatory Taskforce”).Specifically, the REES Regulatory Taskforce adopted the work of the IRC investigation and engaged in additional investigatory work that included a demand from Respondentforastatementinwritingunderoathastoallthefactsandcircumstances concerningtheMLOEducationSchemescoordinatedbyandimplementedthroughREES. WHEREAS,asaresultoftheREESRegulatoryTaskforceinvestigationasit pertainstoRespondent,thefollowingrelevantfactsanddeterminationsweremade, including,butnot limited to:

1)That Respondent admitted being a knowing and active participant inthe MLO Education Schemes coordinated by and implemented through REES;

2)That Respondent in fact had PE and/or CE requirements completed by REES on Respondent’sbehalfin violation offederaland statelaw.Specifically,that Respondenthad42PEand/orCEcompletedbyREESonRespondent’sbehalf under the In-person Education Scheme and 26 PE and/or CE completed by REES on Respondent’s behalf under the Online Education Scheme;

3)That by participating in the MLO Education Scheme coordinated by and implemented through REES, Respondent had in fact violated the ROC; and

4)That by participating in the MLO Education Scheme coordinated by and implemented through REES, Respondent violated state and federal laws concerning competing certain PE and/or CE requirements as a mandatory qualification for licensure.

WHEREAS, Respondent enters into this Agreement solely for the purpose of resolving disputes with the State Mortgage Regulators, including concerning the conduct describedinthisAgreement,anddoesnotadmittoordenyanywrongdoing,allegationsor implications of fact and does not admit to or deny any violations of applicable laws, regulationsand/orrulesgoverningtheconductdescribedherein.Respondent acknowledges that the State Mortgage Regulators have and maintain jurisdiction over the underlyingdispute,includingallmattersreferredtointheserecitals,andthereforehavethe authority to fully resolve the matter.

WHEREAS, Respondent represents to the State Mortgage Regulators that Respondent will comply with Respondent’s obligations under this Agreement, and that Respondentwillhereaftercontinuetocomplywithallregulatoryrequirementsimposedby each State Mortgage Regulator.

WHEREAS, Respondent acknowledges that the State Mortgage Regulators are relying,inpart,uponRespondent’srepresentationsandwarrantiesstatedhereininmaking theirdeterminationsinthismatter.RespondentfurtheracknowledgesthatthisAgreement may be revoked and the State Mortgage Regulators may pursue any and all remedies availableunderthelawagainstRespondentiftheStateMortgageRegulatorslaterfindthat Respondent knowingly or willfully withheld information from the State Mortgage Regulators.

WHEREAS, the State Mortgage Regulators have legal authority to initiate administrativeactionsbasedon theconductidentifiedbythe REESRegulatory Taskforce investigation as described in herein.

WHEREAS, the intention of the State Mortgage Regulators in effecting this settlement istofullyresolve theviolationsandmisconductdescribedhereinpertaining to Respondent’s participation in the MLO Education Scheme coordinated by and implemented through REES. The State Mortgage Regulators reserve all of their rights, duties, and authority to enforce all statutes, rules, and regulations under their respective jurisdictions against Respondent regarding any mortgage loan origination activities outside the scope of this Agreement. Additionally, a State Mortgage Regulator may consider thisAgreementandthe factssetforthhereininconnection with,and in deciding, any action, or proceeding under the jurisdiction of that State Mortgage Regulator, if the basis of such action, or proceeding is not a direct result of the specific activity identified herein;andthatthisAgreementmay,ifrelevanttosuchactionorproceeding,beadmitted into evidence in any matter before a State Mortgage Regulator.

WHEREAS, Respondent hereby knowingly, willingly, voluntarily, and irrevocablyconsentstotheentryofthisOrder,whichisbeingenteredpursuanttothe authorityvestedineachStateMortgageRegulatorandagreesthatRespondentunderstands all of the terms and conditions contained herein.Respondent acknowledges that RespondenthasfullknowledgeofRespondent’srightstonoticeandahearingpursuantto thelawsoftherespectiveParticipatingStates.ByvoluntarilyenteringintothisAgreement, Respondentwaivesanyrighttonoticeandahearing,andreviewofsuchhearing,andalso herein waives all rights to any other judicial appeal concerning the terms, conditions, and related obligations set forth in this Agreement.Respondent further acknowledges that Respondenthashadanopportunitytoconsultwithindependentlegalcounselinconnection with Respondent’s waiver of rights and with the negotiation and execution of this Agreement, and that Respondent has either consulted with independent legal counsel or has knowingly elected not to do so.

NOW, THEREFORE, this Agreement having been negotiated by the Parties in ordertoresolvetheissuesidentifiedherein,withoutincurringthecosts,inconvenienceand delaysassociatedwithprotractedadministrativeandjudicialproceedings,itisbytheState Mortgage Regulators listed below hereby ORDERED:

Jurisdiction

1.That pursuant to the licensing and supervision laws of the Participating States, the ParticipatingStateshavejurisdictionoverRespondentasdescribedhereinandmayenforce the terms of this Agreement thereon unless otherwise stated in this Agreement.

License Surrender

1.Surrender of License.On the Effective Date of this Agreement, Respondent agrees to the surrender of Respondent’s mortgage loan originator license or any MLO Activity Endorsement issued by each State Mortgage Regulator in the corresponding Participating State.This surrender will gointoeffect on or afterthe effective date ofthis agreement as processed and reflected through the NMLS.Respondent further agrees that Respondent willnotapplyforanewmortgageloanoriginatorlicenseor,asapplicable,petitionforthe reinstatement of any MLO Activity Endorsement in any of the Participating States for a periodofthreemonthsfromtheEffectiveDateofthisAgreement.ShouldtheRespondent applyforsuchalicenseorpetitionforthereinstatementofanMLOActivityEndorsement during that three-month period, that license application or MLO Activity Endorsement petition, as consented to by the Respondent herein, shall be deemed denied.

2.New Application for Licensure. Any time after the three-month period has lapsed from the Effective Date of this Agreement and Respondent has paid the Administrative PenaltysetforthinSectionIII,Paragraph1ofthisOrder,Respondentmayapplyforanew mortgageloanoriginatorlicenseor,asapplicable,petitionforthereinstatementofanMLO Activity Endorsement in any or all of the Participating States with the understanding that each State Mortgage Regulatorreservesthe rightsto fullyinvestigatesuchapplication for licensure or petition for reinstatement of an MLO Activity Endorsement and may either approve or deny such application or petition pursuant to the normal process for such licensing or endorsement investigations.No license application or petition described in this paragraph will be denied solely based on the facts, circumstances, or consensual resolution provided for in this Agreement.Respondent further agrees that Respondent must satisfy the Administrative Penalty provision prior to submitting an application for a newmortgageloanoriginatorlicenseor,asapplicable,petitionforthereinstatementofan MLO Activity Endorsement.

Administrative Penalty

1.AdministrativePenalty.ThatRespondentshallpayanAdministrativePenaltyof $21,000 to the Participating States to be distributed equally amongst the Participating States (the “per-state payment”).

2.ThatintheeventthatRespondentfailstosubmitanyAdministrativePenaltysetforth in this Agreement, in the amounts specified herein and in accordance with the applicable deadlines, or if any transfer of any monetary amount required under this Agreement is voided by a Court Order, including a Bankruptcy Court Order, Respondent agrees not to object to a Participating State submitting a claim, nor attempt to defend or defeat such authorized claim, for any unpaid amounts, including against any surety bond that RespondentmaymaintaininsuchParticipatingStateasaconditionofmaintainingalicense or MLO Activity Endorsement under the jurisdiction of that State Mortgage Regulator. Respondent further agrees to restrictions being placed on Respondent’s NMLS account unless and until the Administrative Penalty is paid in full.

3.That a State Mortgage Regulator may elect to have its allocation of the Administrative Penalty set forth in Paragraph 1 of this section to be applied towards the respective Participating State’s consumer relief, and/or other such alternatives authorized under therespectiveParticipating State’slaw. Should a State Mortgage Regulator electto applyitsallocationofadministrativepenaltiesinsuchanalternativemanner,solelyforthe purpose of ensuring theeffective administration of paymentspursuant to the termsof this Agreement,thatStateMortgageRegulatorshallnotifytheREESRegulatoryTaskforcein writing of such election on or before the Effective Date of this Agreement.

Mortgage Loan Originator Education

1.Prior to the submission of a new application for any new mortgage loan originator license or, as applicable, the filing of a petition for the reinstatement of an MLO Activity Endorsement in any Participating State as provided for in Section II, Paragraph 2 of this Order,theRespondentwillberequiredtocompletethefollowingmortgageloanoriginator education requirements:

a.TwentyhoursofNMLSapprovedPE,whichshallconsistof14hoursoffederal law curriculum, three hours of ethics curriculum, and three hours of non-traditional mortgage lending curriculum. None of these 20 hours of PE may be state-specific curriculum; and

b.EighthoursofCE,whichshallconsistoffourhoursoffederallawcurriculum, two hours of ethics curriculum, and two hours of non-traditional mortgage lending curriculum.None of these eight hours of CE may be state-specific curriculum.

2.Respondent may not take any of the PE or CE provided for in Paragraph 1 of this Section in an online self-study format (“OSS”).

3.For a period three years from the Effective Date of this Order, Respondent shall be required to complete any additional required PE and/or CE in a format other than OSS.

Enforcement

1.General Enforcement Authority: That theterms of this Agreement shall be enforced in accordance with the provisions, terms and authorities provided in this Agreement and under the respective laws and regulations of each Participating State.

2.No Restriction on Existing Examination and Investigative Authority. That this Agreement shall in no way preclude any State Mortgage Regulator from exercising its examination or investigative authority authorized under the laws of the corresponding Participating State in the instance a determination is made wherein Respondent is found nottobeadheringtotherequirementsoftheAgreement,otherthaninadvertentandisolated errors that are promptly corrected by Respondent, or involving any unrelated matter not subjecttothetermsofthisAgreement.ThePartiesagreethatthefailureofRespondentto complywithanytermorconditionofthisAgreementwithrespecttoaparticularStateshall be treatedasa violationofanOrderofthe State andmaybe enforcedassuch.Moreover, Respondent acknowledges and agrees that this Agreement is only binding on the State Mortgage Regulators and not any other Local, State or Federal Agency, Department or Office.

3.Information Requests.This Agreement shall not limit Respondent’s obligations, asa licensee of the State Mortgage Regulators, to cooperate with any examination or investigation, including but not limited to, any obligation to timely provide requested information or documents to any State Mortgage Regulator.

4.RevocationofLicense.TotheextenttheRespondentengagesinsimilaractivitythat was the basis for this Agreement, Respondent affirmatively consents to the immediate revocation of any impacted mortgage loan originator license.Respondent further agrees to waive his or her right to a hearing, and to any reconsideration, appeal, or other rights whichmaybeaffordedtocontesttherevocationoftheimpactedmortgageloanoriginator license under this provision.

General Provisions

1.EffectiveDate.ThatthisAgreementshallbecomeeffectiveuponexecutionbyallof the State Mortgage Regulatorsforthe ParticipatingStatesandwhenpostedonthe NMLS (the “Effective Date”).

2.PublicRecord.That thisAgreement shallbecomepublic upontheEffectiveDate.

3.Binding Nature.The provisions of this Agreement shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this Agreementshallhavebeenmodified,terminated,suspended,orsetaside,inwritingby mutualagreement ofthe StateMortgage Regulators,collectively,andRespondent.

4.Standing and Choice of Law. That each State Mortgage Regulator has standing to enforcethisAgreementinthejudicialoradministrativeprocessotherwiseauthorizedunder the laws and regulations of the corresponding Participating State.Upon entry, this Agreement shall be deemed a final order of each respective State Mortgage Regulator unless adoption of a subsequent order is necessary under the laws of the corresponding Participating State.In the event of any disagreement between any State Mortgage RegulatorandRespondentregardingtheenforceabilityorinterpretationofthisAgreement and compliance therewith, the courts or administrative agency authorized under the laws of thecorrespondingParticipating Stateshall haveexclusivejurisdiction over the dispute, and the laws of the Participating State shall govern the interpretation, construction, and enforceability of this Agreement.

5.Adoption of Subsequent Orders to Incorporate Terms. That a State Mortgage Regulator, if deemed necessary under the laws and regulations of the corresponding ParticipatingState, may issue aseparateadministrativeorderto adopt andincorporate the termsandconditionsofthisAgreement.AStateMortgageRegulatormaysuasponteissue such subsequent order without the review and approval of Respondent provided the subsequent order does not amend, alter, or otherwise change the terms of the Agreement. In the event a subsequent order amends, alters, or otherwise changes the terms of the Agreement, the terms of the Agreement, as set forth herein, will control.

6.Privilege.That this Agreement shall not constitute a waiver of any applicable attorney-client or work product privilege, confidentiality, or any other protection applicable to any negotiations relative to this Agreement.

7.Titles.That the titles used to identify the paragraphs of this Agreement are for the convenience of reference only and do not control the interpretation of this Agreement.

8.Final Agreement.That this Agreement is the final written expression and the complete and exclusive statement of all the agreements, conditions, promises, representations, and covenants between the Parties with respect to the subject matter hereof, and supersedes all prior or contemporaneous agreements, negotiations, representations, understandings, and discussions between and among the Parties, their respectiverepresentatives,andanyotherpersonorentity,withrespecttothesubjectmatter coveredherein,exceptingtherefromanyproceedingoractionifsuchproceedingoraction isbaseduponfactsnotpresentlyknowntoaStateMortgageRegulator.ThePartiesfurther acknowledge and agree that nothing contained in this Agreement shall operate to limit a State Mortgage Regulator’s ability to assist any other Local, State or Federal Agency, Department or Office with any investigation or prosecution, whether administrative, civil orcriminal,initiatedbyanysuchAgency,DepartmentorOfficeagainstRespondentorany other person based upon any of the activities alleged in these matters or otherwise.

9.Waiver.That the waiver of any provision of this Agreement shall not operate to waive any other provision set forth herein, and any waiver, amendment and/or change to the terms of this Agreement must be in writing signed by the Parties.

10.Costs.That except as otherwise agreed to in this Agreement, each party to this Agreement will bear its own costs and attorneys’ fees associated with this enforcement action.

11.Notices. That any notice to Respondent and/or the State Mortgage Regulators required orcontemplatedby thisAgreement shallbe delivered, ifnot otherwise described herein, by electronic copy to Respondent through the NMLS, or similar contact system, and to the State Mortgage Regulators by direct written notification.

12.Counterparts.That this Agreement may be executed in separate counterparts, by facsimileorbyPDF.AcopyofthesignedAgreementwillbegiventhesameeffectasthe originally signed Agreement.

13.ThatnothinginthisAgreementshallrelieveRespondentofRespondent’sobligation to comply with applicable State and Federal law.

It issoORDERED.

INWITNESSWHEREOF,inconsiderationoftheforegoing,includingtherecital paragraphs, and with the Parties intending to be legally bound, do hereby execute this Agreement.