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New York financial regulator Benjamin Lawsky is urging the state to make it harder for debt collectors to win court judgments using shoddy documentation.
October 18 -
At least nine lenders have halted operations in the three weeks since state regulators began pressuring banks to cut off their access to the payments system.
August 28
New York State has slapped Prospect Mortgage with a $3 million fine for misleading homeowners on their interest rates, and has cited the mortgage lender for several other violations of state law.
An examination of Prospect Mortgage conducted by the state's Department of Financial Services uncovered a handful of violations by the company, the state announced Wednesday. Prospect, which is one of the largest independent residential mortgage lenders in the country, agreed to pay $3 million to settle the allegation that it charged borrowers upfront fees in order to reduce their interest rates over the life of the mortgage, then failed to deliver the promised discounts. It will also refund $427,155 to the homeowners who were harmed.
With the fine, New York is "enforcing the law on a company that engaged in illegal practices and delivering restitution to homeowners," said Gov. Andrew Cuomo in a news release. "This action should serve as a reminder to all mortgage lenders that we will continue to root out deceptive mortgage practices."
The state claims that, in addition to the deceptive interest-rate practices, Prospect violated "numerous" other laws and regulations. The alleged violations include doing business with unlicensed loan originators and other unlicensed companies, failing to disclose origination information, failing to issue required documents to borrowers and failing to maintain proper books and records.
Prospect agreed to fix these violations and to issue periodic reports to the Department of Financial Services detailing its progress.
Prospect, based in Sherman Oaks, Calif., makes loans across the country and is backed by the private-equity firm Sterling Partners. It recorded loan volume of $7 billion last year. It bought most of IndyMac's loan-production offices in 2008 after IndyMac failed and was taken over by outside investors.
New York's Department of Financial Services, led by superintendent Benjamin Lawsky, has established itself as
