The California Department of Financial Protection and Innovation has reached a $2.3 million settlement with Caliber Home Loans, Inc., after finding the Coppell, Texas-based company overcharged nearly 5,000 borrowers in the state and failed to maintain proper trust account practices.
By the numbers:
- Caliber returned $550,316.46 to 4,912 California borrowers, including 10% annual interest, stemming from per diem interest overcharges between 2012 and 2019.
- The company will pay an additional $1.8 million in administrative fines.
- Caliber has agreed to surrender its California Financing Law and Residential Mortgage Lender and Servicer licenses, effectively exiting the state’s regulated mortgage lending and servicing market.
Background:
- A 2016 DFPI examination uncovered multiple violations, including failures to properly reconcile escrow accounts and charging borrowers excess per diem interest beyond what state law allows.
- In 2019, the DFPI directed Caliber to conduct a self-audit, which revealed thousands of loans with improper charges.
- A follow-up 2020 examination found additional per diem interest overcharges on new loans, prompting regulators to issue formal administrative actions in 2024.
- A hearing was scheduled for this month, but the settlement resolves the matter before trial.
What they’re saying: “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.
Why it matters: The case underscores California’s aggressive oversight of financial institutions and highlights how state regulators are holding lenders accountable for long-running compliance failures. For the credit and collection industry, it signals the DFPI’s continued focus on consumer protection and willingness to impose significant penalties when violations persist over time.
