On April 10, 2017, the California Department of Business Oversight (CDBO) announced that it had reached a settlement with mortgage lender and servicer United Shore Financial Services, LLC. The settlement resolves allegations that United Shore overcharged thousands of California borrowers for interest.
United Shore is a Michigan-based residential mortgage lender and servicer. According to the CDBO, regulatory examinations conducted in 2011 and 2013 found that United Shore had overcharged per diem interest to California borrowers. Specifically, United Shore had allegedly been charging interest on mortgage loans prior to the business day preceding the day of loan disbursement. Under California law, lenders cannot begin charging interest on mortgage loans prior to the business day that immediately precedes the day the loan is funded.
In order to avoid potential suspension or revocation or their license, United Shore agreed to cooperate with requests for audits and refunds for interest overcharges.
Under the terms of the settlement, United Shore will pay over $1.4 million in refunds and penalties and will discontinue violations.
The settlement includes $293,127 in refunds to affected borrowers that United Shore has already paid as a result of self-audits submitted to the CDBO in 2015 and 2016. In addition to the $293,127 in restitution already remitted, United Shore will pay $1.1 million in civil money penalties for the interest overcharges already identified. United Shore also agreed to conduct additional self-audits of its loan information and will pay another $125 for each additional violation identified through those ongoing self-audits.
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