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.

Participating state regulators map

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!

Global Capital Is Reshaping Real Estate for 2026

Investors worldwide are redeploying capital, embracing more active deal structures, and expanding into new regions as the 2026 market takes shape. Data centers, revived office demand, and global diversification are driving a major shift—creating fresh opportunities for real estate, mortgage, and finance professionals who understand where capital is heading next.

Florida’s Home Insurance Crisis Hits Breaking Point as Premiums Soar and Claims Go Unpaid

Florida homeowners now pay an average of $5,838 per year for insurance—about $3,000 more than the national average—pushing many families to the financial brink. Residents report premiums tripling, claims being severely underpaid, and insurers dropping policies at one of the highest rates in the country. As frustration mounts, lawmakers and industry experts are calling for sweeping reforms to curb rising costs, increase accountability, and stabilize a market that’s reshaping real estate decisions across the state.

Citizens Insurance Steps Back as Florida’s Private Market Surges

Florida’s insurance market has hit a major turning point. Citizens Property Insurance—once the state’s largest insurer with 1.4 million policies—has shed more than 900,000 policies as private insurers return in force. Driven by Florida’s depopulation program and the arrival of 17 new companies, nearly 200,000 policies shifted to private carriers in October alone, with about 40 percent offering lower premiums. The shift signals rising competition, stabilizing rates, and new opportunities for homeowners and industry professionals navigating Florida’s evolving insurance landscape.

NAR Unveils Biggest MLS Policy Overhaul in 20 Years, Effective 2026

The National Association of REALTORS® has approved 18 major updates to modernize its MLS policies—the largest overhaul in two decades. Announced at NAR NXT in Houston and set to take effect in January 2026, the changes aim to streamline MLS operations, improve enforcement clarity, and better align policies with how today’s real estate professionals actually work.

Inhabit Unveils New AI and Fraud Prevention Tools Transforming Property Management

Inhabit has rolled out a powerful lineup of AI-driven leasing, marketing, fraud prevention, and compliance tools designed to streamline operations and protect property teams from growing risks. From hybrid AI leasing assistants to instant income verification and upcoming portfolio-wide lease audits, these innovations aim to cut costs, eliminate inefficiencies, and strengthen regulatory confidence across the multifamily industry.

Florida’s Insurance System Is Shifting Again—But Are Homeowners Still in the Danger Zone?

Florida’s latest round of insurance reforms was meant to calm a volatile market, yet many experts warn the same deep structural problems remain. Homeowners are being pushed from Citizens into higher‑priced, lightly capitalized private insurers, ratings agencies face scrutiny for inflated grades, and political influence clouds oversight. For real estate and insurance professionals, these trends signal ongoing risk, rising costs, and a market in need of a complete rebuild.