Mortgage lender settles California case for $2.3 million in fines and refunds
A former Texas mortgage company will stop doing business in California and pay $2.3 million in fines and homeowner refunds under a settlement announced Monday by state consumer protection officials.
Caliber Home Loans, which has since been absorbed into the Pennsylvania mortgage servicer Newrez, overcharged about 5,000 California borrowers for the interest that must be paid in advance of their first regular mortgage payments, the settlement agreement released by the California Department of Financial Protection & Innovation says.
The overcharges were discovered during an audit of about 65,000 loans made from 2012 to 2019 that the state ordered the company to conduct, the settlement said.
For a time, the company also failed to follow state regulations for the escrow accounts kept for consumers who are paying taxes, insurance and other fees and charges through their mortgages, the settlement agreement said.
As part of the settlement, the company has agreed to pay $1.8 million in fines, as well as refund $550,000 in overcharges to the consumers involved, the settlement said.
The company will also give up two licenses that allow it to operate in California — a California Financing Law license and the California Residential Mortgage Lender and Servicer license — the agency said in a news release.
“This penalty holds Caliber accountable and returns interest to California borrowers,” agency Commissioner Khalil “KC” Mohseni said in the statement. “It is an example of DFPI’s strong regulatory oversight in California’s mortgage industry and its commitment to protect California consumers.”
Monday’s settlement was not the first for Caliber. The Coppell, Texas-based company was accused of overcharging Minnesota consumers who paid their mortgages by phone, settling a federal class-action suit on that issue for $5 million in 2021.
The lender was acquired by New York-based New Residential Investment Corp. in 2021, and its mortgages are now serviced by a division of that company called Newrez. The parent company changed its name to Rithm Capital in 2022.
The new company will still serve California customers, even as the Caliber licenses are ended, a Newrez spokesperson said in an email. Caliber itself has already been dissolved and absorbed into an affiliate of Newrez, the spokesperson said.
“’The California DFPI matter referenced relates to activity that occurred prior to the acquisition and is part of the final legal resolution of Caliber’s dissolution,” the company said. “This settlement does not affect Newrez’s operations in California.
This story was originally published August 18, 2025 at 12:32 PM.
