State Regulator Squeezes Loan Servicers For $240K+ In Refunds Of Prepayment Penalties Illegally Clipped From Maryland Homeowners

From the Office of the Maryland Department of Labor, Licensing & Regulation:

• Sarah Bloom Raskin, Commissioner of Financial Regulation for the Department of Labor, Licensing and Regulation, [] announced refunds to Maryland consumers of approximately $246,000 related to a series of completed regulatory examinations of mortgage loan servicers.

• Litton Loan Servicing and Saxon Mortgage Services have each refunded approximately $71,000 to a combined total of 160 Maryland consumers, while Bayview Loan Servicing has refunded approximately $104,000 to 40 Maryland consumers.

• The refunds followed compliance examinations conducted by the Office of the Commissioner of Financial Regulation that uncovered previous violations of Maryland law, primarily related to restrictions on the imposition of prepayment penalties.

• "Maryland has provided protections related to prepayment penalties, and we are committed to making sure Maryland consumers receive those protections. We appreciate the cooperation of these firms in resolving this matter," Commissioner Raskin said. "These refunds relate to violations of prepayment restrictions in effect prior to the 2008 Maryland mortgage and foreclosure regulatory reforms. In 2008, Governor O'Malley signed into law a blanket prohibition against prepayment penalties in connection with Maryland residential mortgage loans." Maryland is one of the few states that maintain licensing and examination authority over independent mortgage servicers. The state does not have authority over those servicers owned by federally chartered banks and thrifts.

Source: DLLR Obtains Refunds for Consumers Over Improper Charges.