Ryland Fined for Lending Practices

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Ryland Group Inc. has been fined by the North Carolina banking commissioner’s office for allegedly employing unlicensed loan officers and charging borrowers excessive fees.


The Wall Street Journal reported that Ryland’s affiliated mortgage company, Ryland Mortgage, agreed to a settlement in which the Calabasas-based company admits no wrongdoing but will refund 850 buyers about $250 each as well as pay a $161,000 fine.


The state’s Deputy Commissioner of Banks, Mark Pearce, said state regulators were concerned that the home builder was recouping discounts given to buyers on homes by charging them excessive closing costs and other fees on their loans.


As part of the settlement, Ryland agreed to highlight specific discounts to buyers when using its mortgage company. The North Carolina investigation also found 31 instances of unlicensed loan officers listed on loan applications which Ryland called an “unintentional oversight.”


Fellow Los Angeles County homebuilder KB Home also has come under scrutiny through its partnership with Calabasas-based lender Countrywide Financial Corp. The partnership has been accused of questionable lending as well as hiking appraisals to sell the homes at higher prices. KB and Countrywide have both denied any wrongdoing.


Shares in Ryland were up 1.4 percent to $28.20 in early trading Wednesday on the New York Stock Exchange.

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