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LoanSnap, a fintech mortgage lender that launched in 2018 promising to help consumers use their home equity to pay off high-interest debt, has had its license revoked in Connecticut and has been put on notice by California regulators that they intend to do the same.
The Costa Mesa, California-based lender — which raised millions in venture capital from funds associated with celebrities like Richard Branson, Joe Montana and LinkedIn co-founder Reid Hoffman — saw most of its business dry up last year.
LoanSnap was evicted from its headquarters in May and also faces lawsuits by creditors, according to Connecticut regulators who issued a cease and desist order against the company in January and suspended the company’s license in the state in July.
LoanSnap, which did not respond to requests for comment from Inman, entered into a consent order with the Connecticut Department of Banking on Oct. 2.
Connecticut regulators alleged that the company employed call center representatives who acted as unlicensed mortgage originators by taking loan applications, offering or negotiating loans, and denying credit to some borrowers.
Although LoanSnap entered into the consent order “without admitting or denying any allegations,” the company also agreed not to make any public statement “denying, directly or indirectly, any allegation” or to “create the impression that [the] consent order is without factual basis.”
Riding the pandemic refi boom
After acquiring an existing mortgage lender, DLJ Financial, and launching in 2018, LoanSnap’s business got off to a slow start. The company originated just 380 loans in 2019 totaling $131.7 million,…