On April 10, 2017, the California Department of Business Oversight (DBO) announced that it had entered into a consent order with a Michigan-based residential mortgage lender and servicer over allegations that the firm was overcharging consumers for interest on a number of loans.
The DBO brought an enforcement action against the company following two regulatory investigations, alleging that the company had violated Section 50204 of the California Financial Code and Section 2948.5 of the California Civil Code by charging excess per diem interest on loans made to California borrowers. Specifically, the firm had allegedly been charging interest on mortgage loans prior to the business day preceding the day of loan disbursement, in direct violation of California law. As a result of self-audits submitted to the DBO in 2015 and 2016, the company had already paid $293,127 in refunds to affected borrowers prior to entering into this consent order.
In addition to the $293,127 in restitution already remitted, the company agreed to pay civil penalties in excess of $1,100,000, to stop overcharging customers, and to conduct additional self-audits of its loan information (including through independent third-party audits), and to provide those audits to the DBO. The consent order further requires the company to issue additional refunds to any affected borrowers identified through additional self-audits, and to pay $125 for each additional violation identified.
The post California DBO Enters Into $1.4 Million Consent Order With Mortgage Lender Over Interest Charges appeared first on Consumer Finance Insights (CFI).