Commissioner's Actions Require Lenders to Assess & Recover Civil Penalties

Client Need

The California Corporations Commissioner conducts periodic examinations to review lender compliance. After auditing several major lenders, the Commissioner discovered that it was unknowingly charging excessive interest for 10-15% of its borrowers. These lenders needed automated database services for confirming key input values for interest calculations, particularly funding and recording dates, in order to improve compliance and minimize penalties.

Solution

These lenders looked to First American CoreLogic to provide the necessary property and recording data. They provided First American CoreLogic a sample of questionable loans requiring review. First American CoreLogic appended the required mortgage and recording data to the loan files so the lenders could correctly compute interest calculation dates compliant with state mandates.

Results

The lenders were able to retroactively calculate and report to the Commissioner interest overcharges, and reimburse its customers accordingly, bringing them into immediate compliance for their closing processed. Proactively, they have implemented this approach to their process, resulting in hundreds of thousands of dollars savings in annual penalties and interest.