This is the regulator’s second action against the company
Movement Mortgage has agreed to pay more than $1.1 million in penalties and refunds to customers to settle findings by the California Department of Business Oversight (DBO) that it overcharged borrowers and serviced loans without a state license.
“This closes the second and I hope the last action the DBO is forced to take against Movement Mortgage,” DBO Commissioner Jan Lynn Owen said. “I am pleased with the settlement, which compensates borrowers for the financial harm they suffered and requires the firm to take steps to prevent this from happening again.”
Under the settlement, the South Carolina-based mortgage lender is required to stop servicing California loans until it obtains a license. Additionally, the company will refund per diem interest to at least 1,347 borrowers, totaling more than $141,000.
The company also agreed to submit its loan originations to independent auditing and implement revised policies and procedures to prevent future violations. Movement will pay $1 million in penalties for past violations and $125 for each additional violation identified by the independent audit.
The settlement stems from a regulatory examination conducted by the DBO in 2016, which found that Movement violated the statutory limits on per diem interest and serviced loans without proper licensure. California law prohibits lenders from charging interest on mortgage loans until the last business day before the loan proceeds are disbursed. Additionally, lenders cannot service residential loans without first obtaining servicing authority from the DBO.
The DBO said that this is the second time in the past five years that examiners found per diem overcharges in Movement’s loans. An examination in 2012 resulted in the company refunding almost $7,300 to 65 customers. However, no penalties were assessed at that time.
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“This closes the second and I hope the last action the DBO is forced to take against Movement Mortgage,” DBO Commissioner Jan Lynn Owen said. “I am pleased with the settlement, which compensates borrowers for the financial harm they suffered and requires the firm to take steps to prevent this from happening again.”
Under the settlement, the South Carolina-based mortgage lender is required to stop servicing California loans until it obtains a license. Additionally, the company will refund per diem interest to at least 1,347 borrowers, totaling more than $141,000.
The company also agreed to submit its loan originations to independent auditing and implement revised policies and procedures to prevent future violations. Movement will pay $1 million in penalties for past violations and $125 for each additional violation identified by the independent audit.
The settlement stems from a regulatory examination conducted by the DBO in 2016, which found that Movement violated the statutory limits on per diem interest and serviced loans without proper licensure. California law prohibits lenders from charging interest on mortgage loans until the last business day before the loan proceeds are disbursed. Additionally, lenders cannot service residential loans without first obtaining servicing authority from the DBO.
The DBO said that this is the second time in the past five years that examiners found per diem overcharges in Movement’s loans. An examination in 2012 resulted in the company refunding almost $7,300 to 65 customers. However, no penalties were assessed at that time.
Related stories:
Movement Mortgage launches new down payment program
Movement Mortgage reports successful 2016
