California borrowers get refunds as lender pays $2.3 Million

CALIFORNIA – The California Department of Financial Protection and Innovation (DFPI) reached a $2.3 million settlement with Caliber Home Loans after finding the company overcharged thousands of borrowers in violation of state regulations.

As part of the settlement, Texas-based Caliber will pay $1.8 million in penalties and has refunded over $550,000 to California consumers.

The company will also surrender its California lending and servicing licenses.

Overcharged interest on over 4,912 loans

A DFPI investigation found Caliber overcharged per diem interest on 4,912 loans between 2012 and 2019, violating state law.

The company also failed to follow required trust accounting rules.

“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,” said DFPI Commissioner KC Mohseni.

Caliber also settled for $17 million in New York

In a separate settlement, Caliber agreed in 2020 to provide up to $17 million in mortgage loan forgiveness to customers in New York who were placed into unfair, interest-only loan modifications by the company.

The company produced $71.4 billion in volume in 2021 but only $3.5 billion last year, per Home Mortgage Disclosure Act data.

New Residential Investment Corp. (Newrez) acquired Caliber in 2021 for $1.7 billion. It’s unclear whether Newrez is covering the California settlement.

The DFPI protects consumers, regulates financial services, and promotes fair, transparent, and accountable financial practices. Learn more at dfpi.ca.gov.