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On August 18, the California Department of Financial Protection and Innovation (DFPI) reached a settlement with a former mortgage lender and servicer to resolve allegations that, among other things, the company overcharged thousands of California borrowers in per diem interest, in violation of state financial regulations. The company was licensed as a residential mortgage lender and servicer under the authority of the California Residential Mortgage Lending Act (CRMLA) and licensed as a finance lender under the authority of the California Financing Law (CFL). Following a 2016 examination, DFPI alleged that the company failed to establish a custodial account for borrowers trust funds, failed to reconcile its escrow liability ledgers, and overcharged borrowers per diem interest. In 2020, DFPI commenced another examination and alleged that the company continued to overcharge borrowers per diem interest, which resulted in an administrative action in 2024. Under the settlement, the company agreed to pay administrative penalties in the amount of $1.8 million. The settlement also notes that the company has refunded borrowers who were overcharged per diem interest for a total amount of $550,316.46. |
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