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SMALL BUSINESS; DiTech Offers to Pay $250,000 in Alleged Gouging; Lending: But state regulators say that's not enough to settle the case involving the mortgage firm's interest billing.
[Home Edition]
Los Angeles Times - Los Angeles, Calif.
Subjects: Settlements & damages; Interest; Mortgage companies; Regulation
Author: Strickland, Daryl
Date: Aug 19, 1998
Start Page: 1
Section: Business; PART-D; Financial Desk
Abstract (Document Summary)

But the offer, which came hours after the state Department of Corporations ordered the Irvine lender to reimburse customers and stop violating state law, falls short of what regulators were seeking.

The department accused DiTech in November of breaking state law by overcharging customers on first mortgages 29% of the time, and nearly 80% of the time on second mortgages. But DiTech disagreed, saying it should be allowed to chalk up interest when events beyond its control, such as pauses in recording loans with local governments, delayed the funding of loans. The company said it was simply passing on costs it incurred to the borrower.

In March, DiTech agreed to repay customers a total of $80,000 for overcharges on second mortgages, sending checks ranging from $3 to $219, (Dan) Baren said. "We've made a good-faith process to comply with their interpretation of the rules and we will continue to do so," he said. "As far as I'm concerned, {Tuesday's offer} puts an end to our dispute with the Department of Corporations."

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