N.Y. Fines Prospect Mortgage $3M for Deceptive Sales Pitch

October 24, 2013
American Banker 
mortgage lending news

New York State's Department of Financial Services has fined Prospect Mortgage $3 million for misleading homeowners on their interest rates. Prospect -- one of the largest independent home mortgage lenders in the United States -- agreed to the penalty, which settles allegations that it failed to lower borrowers' mortgage interest rates after charging upfront fees to do so.

Prospect also will refund $427,155 to affected homeowners. The state claims that Prospect violated "numerous" other laws, including doing business with unlicensed loan originators, failing to disclose origination information, failing to issue required documents to borrowers, and failing to keep proper records. Prospect has agreed to fix the violations and to issue periodic reports to the Department of Financial Services on its progress. "This action should serve as a reminder to all mortgage lenders that we will continue to root out deceptive mortgage practices," Gov. Andrew Cuomo declared in a statement to the press.

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