California’s financial regulator has settled with a Texas-based mortgage lender for $1.6 million to resolve allegations it wrongfully charged California borrowers interest.
PrimeLending, based in Dallas, has local offices in Sacramento, Davis and Roseville.
The Department of Business Oversight alleged that PrimeLending charged its customers interest on mortgage loans which it had not yet funded.
Included in the settlement is a total of $319,524 of refunds to hundreds of customers based on the firm’s own audit of 20,474 loan files. PrimeLending will also pay $1.3 million in penalties.
“These interest overcharges are one of the most common violations we find in our regulatory examinations of mortgage lenders,” said Jan Lynn Owen, commissioner of the Department of Business Oversight, in a news release. “We will continue to aggressively fight this unlawful nickel-and-diming of California consumers.”
California law prohibits lenders from charging interest on mortgage loans prior to the business day before loan proceeds are disbursed. PrimeLending charged per diem interest.
PrimeLending is a subsidiary of Hilltop Holdings Inc. (NYSE: HTH) of Dallas.
Article and image provided by: Sacramento Business Journal