Long Beach Mortgage Sued for $9 Million
California regulators said Thursday that they have sued Long Beach Mortgage Co., seeking $9 million in fines from the big sub-prime unit of Washington Mutual Inc. for alleged repeat violations of lending laws.
State law bars mortgage lenders from charging interest until one day before loans close. Long Beach Mortgage, based in Orange, was found to be breaking that law in 1999, and kept doing so despite pledging to repay overcharged borrowers and change its policies, the Department of Corporations said.
After reviewing loans originated from December 1999 to January 2002, Long Beach Mortgage admitted charging $625,000 in excess interest on 3,618 loans, Corporations Commissioner Demetrios Boutris said.
Boutris said his department ordered repayment of the overcharges in June and was pursuing the $9-million penalty in court because the case involved the “nickel and diming of financially disadvantaged Californians.”
Washington Mutual officials could not be reached for comment on the suit, filed Nov. 21 in Sacramento County Superior Court.