Prospect Mortgage reached an agreement with the California Department of Business Oversight, which included refunds to more than 12,000 Californians totaling approximately $1.33 million.
The department began an enforcement action seeking penalties and suspension of Prospect’s residential mortgage lender license and finance lender license after discovering multiple violations of the California Residential Mortgage Lending Act.
Following a regulatory examination by the department, a high number of per diem interest violations were discovered. The lender was ordered to complete a thorough self-audit covering the period of Aug. 10, 2006 to June 28, 2013.
As a result, Prospect agreed to settle the department’s ensuing enforcement action and agreed to refund 12,580 California customers approximately $1.33 million, pay administrative fees of approximately $1.8 million, and make significant changes to its policies and procedures to comport with California law.
“The Department of Business Oversight enforces laws to protect all Californians from unfair business practices that hurt consumers and the mortgage lending industry,” said Commissioner Jan Lynn Owen.
“This settlement resolves past violations and notices all licensed residential mortgage lenders and servicers that full compliance with the law is non-negotiable,” Owen added.
