After the California Department of Business Oversight accused PrimeLending of overcharging hundreds of California borrowers for interest on their mortgages, the Texas-based lender agreed to pay more than $1.6 million as part of a settlement, reports HousingWire staffer Ben Lane.
Under California law, lenders are prohibited from beginning to charge interest on mortgages prior to the business day that immediately precedes the day the loan is funded. According to the CDBO, PrimeLending committed multiple violations of a statutory restriction on “per diem interest.”
According to the CDBO, its office notified PrimeLending of the per diem interest violations on two separate occasions, but said that the lender failed to respond in a timely or satisfactory manner.
Only when the CDBO informed the company it planned to file an enforcement action and suspend the firm’s license to conduct business within the state did PrimeLending begin to comply the with state’s laws, the CDBO said.