Monday, July 19, 2010

Servicers Refund Prepayment Penalties In Maryland

Maryland's Department of Labor, Licensing and Regulation (DLLR) has obtained for consumers about $246,000 in refunds related to a series of regulatory examinations of mortgage 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 DLLR's Office of the Commissioner of Financial Regulation that uncovered previous violations of Maryland law, primarily related to restrictions on the imposition of prepayment penalties.

The refunds relate to violations of prepayment restrictions in effect prior to the 2008 Maryland mortgage and foreclosure regulatory reforms, Bloom Raskin said. In 2008, Gov. Martin O’Malley signed into law a prohibition against prepayment penalties in connection with 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.