Mortgage CEO Barred in 21 States After Education Fraud Settlement Shakes the Industry
A multistate enforcement action has shaken the mortgage industry as Patrick Terrance Donlon, CEO of Trusted American Mortgage, agreed to a sweeping settlement that bans him from operating as a mortgage loan originator in 21 states—19 of them permanently. The Conference of State Bank Supervisors (CSBS) announced the agreement, which also includes a $31,000 penalty and strict conditions limiting Donlon’s involvement in financial services leadership roles for two years.
A Deep Dive Into the Allegations
According to settlement documents filed with the California Department of Financial Protection & Innovation, Donlon disputed the accusations but chose to resolve the matter to avoid the “time, expense, and uncertainty” of individual investigations across multiple states.
The allegations centered on a serious breach of the SAFE Act: Donlon was accused of having another person complete 22 pre‑licensing courses and three continuing education courses on his behalf—an unmistakable violation of federal and state licensing standards.
The CSBS and the American Association of Residential Mortgage Regulators coordinated the investigation after receiving a tip in early 2025, prompting a multistate response through the Nationwide Multistate Licensing System (NMLS).
Where the Ban Applies
The action involved 21 states, led by regulators in Arkansas, Colorado, Florida, Iowa, Kansas, and Texas. Other participating states include Arizona, California, Idaho, Illinois, Maryland, Michigan, Minnesota, Montana, New Mexico, Ohio, Oklahoma, Oregon, South Carolina, and South Dakota.
Donlon is permanently barred from the mortgage industry in 19 of those states. Only Colorado and Florida—where he may reapply in two years—left a pathway for reinstatement, contingent upon penalty payments and completing additional verified education.
Financial Penalties and Professional Fallout
Colorado and Florida will each receive $7,000 from the settlement, while the remaining participating states receive $1,000 each. Maryland and New Mexico—where applications were pending—are excluded from the financial distribution.
Beyond the bans, Donlon is prohibited from serving as a control person or qualified individual for any NMLS‑registered entity for two years. Trusted American Mortgage has already removed him from those internal roles.
“We require that licensed professionals complete their continuing education to ensure our licensees have the highest levels of competence and ethics,” said Susana Soriano, Acting Director of the Illinois Division of Banking. “With this action, the residential real estate market in Illinois has been protected.”
A Growing Trend of Education Fraud Crackdowns
This is not the first time CSBS has coordinated widespread actions targeting education fraud. In 2022, more than 440 loan officers settled claims with 44 state agencies for falsifying continuing education. Regulators have made it abundantly clear: education shortcuts will not be tolerated.
A Critical Reminder for Industry Professionals
For mortgage loan originators, this case reinforces the importance of legitimate education—both legally and ethically. Verified pre‑licensing and continuing education aren’t mere checkboxes; they are the cornerstone of safe, compliant lending practices.
At Cameron Academy, we understand how crucial it is for professionals to meet their education requirements truthfully and confidently. Our approved mortgage education programs are built to keep you compliant, protected, and prepared—without shortcuts or question marks.
For more details, view the original report at National Mortgage News:
Read the full article
More Articles
Getting licensed or staying ahead in your career can be a journey—but it doesn’t have to be overwhelming. Grab your favorite coffee or tea, take a moment to relax, and browse through our articles. Whether you’re just starting out or renewing your expertise, we’ve got tips, insights, and advice to keep you moving forward. Here’s to your success—one sip and one step at a time!
foreign investment in U.S. real estate has surged to unprecedented levels, surpassing 1.2 trillion dollars over the past 15 years. This influx has sparked a robust debate among scholars and policymakers about the potential threats and benefits posed by such investments.
With the rise of digital interactions, Aflac is tailoring its strategies to engage Gen Z and other demographics, focusing on seamless digital experiences and omnichannel engagement.
U.S. single-family homebuilding sector has hit an eight-month low in June, largely due to escalating mortgage rates. This downturn suggests a potential drag on the nation's economic growth during the second quarter.
As we navigate this rising tide of risk, the insurance industry must innovate and adapt to ensure that protection remains viable for those who need it most. The stakes have never been higher, and the time for action is now.
