Audit shows lack of oversight of mortgage companies

By Cy Ryan

Tuesday, Oct. 18, 2016 | 3:48 p.m.

CARSON CITY — A state division whose job is to regulate the mortgage-lending industry has failed to check if many of these companies are obeying state laws and regulations.

“The public is not being protected,” Assemblywoman Maggie Carlton said after a legislative audit was released today of the state Division of Mortgage Lending.

The audit found the division did not conduct the timely review of 58 percent of 238 mortgage companies. Examinations of 124 companies were past due by an average of 13 months.

The report said part of the problem was the result of turnover of employees.

Bruce Breslow, director of the state Department of Business and Industry, which oversees the division, said the commissioner of the agency left to return to his home state, and the deputy director retired after 37 years with the state.

In addition, two other positions were vacant, Breslow said.

Companies considered risky based on consumer complaints or previous investigations were not examined in the required six to 12 months, the audit said.

“Timely follow-up with licensees that receive adverse ratings is important to help ensure they implement appropriate corrective action,” Deputy Legislative Auditor Diana Giovannoni said.