Prospect Mortgage Hit with $10.1 Million Fine by State Regulators

Prospect Mortgage, a Sherman Oaks, Calif., nonbank lender, has agreed to pay $10.1 million in borrower restitution and penalties for violating federal and state laws, California’s Department of Business Oversight said Thursday.

Prospect inflated settlement service fees charged to more than 70,000 borrowers during a four-year period, the state agency said. Beginning in late 2009, Prospect collected $202.50 in settlement service fees from each borrower, which exceeded the actual cost of the services by an average of $37.50, the agency said.