The California Department of Financial Protection and Innovation (DFPI) confirmed on Monday that it has reached a $2.3 million settlement with former mortgage lender and servicer Caliber Home Loans Inc.
California regulators found that in 2016, Caliber overcharged borrowers per diem interest and later identified 4,912 affected loans between 2012 and 2019, totaling $550,316. These were deemed to be violations of California Financial Code section 50204(o) and Civil Code section 2948.5.
The lender refunded customers with 10% annual interest, according to the settlement. Caliber also corrected issues with custodial accounts and was cited again in 2020 for five similar cases.
The company settled with regulators ahead of a trial set for next week. In 2020, Caliber separately agreed to $17 million in mortgage forgiveness for New York borrowers accused of being steered into unfair loan modifications.
The company also failed to maintain required trust accounting practices under state regulations, DFPI claims.
As part of the settlement, Caliber — which was acquired in 2021 for $1.7 billion by New Residential Investment Corp. (Newrez) — will pay $1.8 million in penalties and has refunded more than $550,000 to impacted California consumers.
In addition, the company will surrender its California Financing Law license and its California Residential Mortgage Lender and Servicer license. Caliber’s origination licenses expired in 2024. Once a top retail shop, Caliber produced $71.4 billion in volume in 2021 but only $3.5 billion last year, per Home Mortgage Disclosure Act data.
It remains unclear whether Newrez is covering the settlement costs. Newrez did not immediately respond to HousingWire‘s requests for comment on Monday.
“This penalty holds Caliber accountable and returns interest to California borrowers. It is an example of DFPI’s strong regulatory oversight in California’s mortgage industry and its commitment to protect California consumers,” DFPI Commissioner KC Mohseni said in a statement.
