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NY Settles Probe Of Mortgage Company Discount Fees

New York financial regulators say they've settled an investigation into Prospect Mortgage discount fees with a $3 million dollar penalty.

The Department of Financial Services says the Sherman Oaks, Calif.-based company has also agreed to pay more than $427,000 in refunds to 270 New York homeowners.

Superintendent Benjamin Lawsky said Wednesday their examination showed the company charged borrowers for interest rate discounts that never materialized from 2008 to 2011.

Prospect has a nationwide network and about $7 billion in new loans last year.

The agreement also cites other violations. It says Prospect will file quarterly reports for three years showing its compliance steps.

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