• Key Insight: Learn why California regulators are moving to suspend Wallick & Volk's lending license.
• Supporting Data: 12 months of license suspension sought by California regulators against the lender.
• Forward Look: Get ready for state regulators to continue pursuing enforcement.

Overview bullets generated by AI with editorial review. 

A nonbank lender and servicer is facing suspension of its California license for purported escrow violations, as state regulators continue to signal their intent to pursue enforcement. 

The California Department of Financial Protection and Innovation issued an order to discontinue violations and a notice to suspend the license of Cheyenne, Wyoming-based Wallick & Volk. State officials accused the lender and servicer of commingling funds meant for borrower escrow with its own general account, along with other violations that have previously landed numerous mortgage businesses in legal hot water.

The move is the latest enforcement action against a mortgage company to come out of the Golden State this year, with the notice underscoring the severity of escrow violations in the eyes of regulators and the necessity for lenders to ensure appropriate accounting oversight. 

"The department took this action last month after the firm violated the laws from California Residential Mortgage Lending Act, specifically regarding the company's escrow account violations, not providing written loan-brokerage agreements to clients and other allegations of shoddy bookkeeping," a DFPI spokesperson said in a statement sent to National Mortgage News. 

Claims were filed following a mid-2025 examination of Wallick & Volk's business transacted over the prior three-year period. The state is seeking suspension of the company's license for up to 12 months and a financial penalty of at least $200,000. 

Wallick & Volk had not responded to an inquiry sent by National Mortgage News prior to publication. 

The company is licensed in 12 states, with the majority located in the Western U.S. In 2025, Wallick & Volk produced nearly $57 million in originations, with $8.5 million coming within California, according to Home Mortgage Disclosure Act data.

The alleged violations

In the examination, California officials found Wallick & Volk could not provide a final settlement or money trail for one particular file that would show movement of escrow monies from funding date through to purchase. 

"Wallick & Volk improperly held the borrower funds in its operating account until the loans were sold to the investor instead of depositing the borrower trust funds in the designated California trust bank account," DFPI claimed in filing documents. 

Upon submission of examination review findings, Wallick & Volk agreed with the determination of commingling.

The mortgage firm also improperly maintained records for a total of five loans and failed to locate initial applications submitted in two cases, the department said. For one of those originations, it did not file a signed loan-brokerage agreement as required. 

A previous regulatory examination in 2021 uncovered similar breaches of bookkeeping and broker-disclosure rules.

Prioritizing escrow compliance

Regulatory actions in the past have put a spotlight on how seriously officials view noncompliance with borrower escrow agreements and recordkeeping, whether or not they involve any clear evidence of intentional commingling of funds.  

In one of the highest-profile cases in recent history, scores of federal and state regulatory bodies  took action against Ocwen Financial Services for improper bookkeeping and handling of escrow accounts among other servicing violations. Subsequent penalties later restricted the company's ability to service. The company later rebranded itself to Onity Group.

The now-defunct servicer Ditech Funding ran into significant financial and legal trouble over its misconduct and mishandling of escrow, which was uncovered over a decade ago, eventually leading it to declare bankruptcy and liquidate its assets in 2019.