Smart Rate, an online mortgage broker operating in Illinois, has recently secured a temporary stay on its suspension of license for soliciting loans without a mortgage license in the state of Illinois. Michael Strauss, the founder and CEO of Smart Rate, successfully argued before an administrative court that his business is not subject to state regulation due to the nature of its services as an online broker.
Smart Rate specializes in connecting borrowers to lenders via its proprietary web platform. Unlike traditional mortgage brokers, Smart Rate does not take on loans, nor does it broker directly or participate in the underwriting of mortgages. The company provides borrowers with a low rate guarantee, meaning that if the borrower’s loan is not at or below the guaranteed rate, Smart Rate will reimburse the borrower up to one percent of the loan amount.
At the time of the suspension of Smart Rate’s license, Strauss maintained that his company did not require a mortgage license as it was not an 84 Illinois administrative code broker. He argued that his services were better described as a technology provider and that his platform actually facilitated the electronic transmission of applications and closing documents between lenders and borrowers.
The court agreed with Strauss and found in favor of Smart Rate. As a result, the company’s license has been temporarily reinstated and Smart Rate is now allowed to continue to do business in Illinois. This is a major victory for Strauss and Smart Rate and is likely to open up new opportunities for the company in other states. In addition, this ruling could set a precedent for other online brokers and lenders operating in Illinois who may currently be subject to similar regulations.
You can read this full article at: https://www.housingwire.com/articles/michael-strauss-smart-rate-appeal-license-suspension-in-illinois/(subscription required)
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