Georgia Department of Banking and Finance Announces Multi-State Settlement with Prospect Mortgage, LLC

November 19, 2015

Atlanta, Georgia – Today the Multi-State Mortgage Committee (MMC) announced a Settlement Agreement and Consent Order between 50 state mortgage regulators and Prospect Mortgage, LLC (NMLS ID 3296). A multi-state examination conducted by eight states, including Georgia, revealed a pattern of charging improperly disclosed and unsupported fees paid to the company’s affiliate, C2C Appraisal Services, LLC.

“Prospect’s past practice of charging unsupported fees is unacceptable and borrowers must be compensated for monies they paid to Prospect erroneously,” said Karyn Tierney, Chair of the MMC. “This settlement allows the company the ability to continue operating while sending a strong message to the industry that this kind of behavior must be stopped.”

The order sets forth the following main points:

  • Prospect shall pay restitution to borrowers in participating states that were assessed a C2C Settlement Service Fee in the amount of $40 with interest of 10 percent per annum from the date the fee was charged, for an estimated $2.8 million in combined restitution (affected borrowers will be contacted directly by the company);
  • Prospect shall pay an administrative penalty of approximately $7.4 million to the state mortgage regulators; and
  • Prospect must revise and submit to the MMC for review its Policy and Procedure Manuals addressing specifically the areas of mortgage operations, fees, disclosures, requirements for charging consumer credit cards, and record retention.

Mortgage regulators from the following states participated in the agreement: Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Commonwealth of Kentucky, Louisiana, Maine, Maryland, Commonwealth of Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Commonwealth of Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Commonwealth of Virginia, Washington, West Virginia, Wisconsin, and Wyoming. 

 

Contact:
Rod Carnes
Deputy Commissioner for Non-Depository Financial Institutions
Phone: (770) 986-1371
E-mail: rodc@dbf.state.ga.us

 

The Department is the state agency that regulates and examines Georgia state-chartered banks, state-chartered credit unions, and state-chartered trust companies. The Department also has responsibility for the supervision, regulation, and examination of Merchant Acquirer Limited Purpose Banks (MALPBs) chartered in Georgia.  In addition, the Department has regulatory and/or licensing authority over mortgage brokers, lenders and processors, mortgage loan originators, check cashers, sellers of payment instruments, money transmitters, international banking organizations, and bank holding companies conducting business in Georgia.

Related Files: 
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Prospect Mortgage, LLC Consent Order923.86 KB