A New York State Department of Financial Services examination uncovered that Prospect Mortgage engaged in deceptive practices on interest rates that harmed 270 state homeowners, the agency says.

The DFS’ examination, which covered loans closed from January 2008 through August 2011, revealed that Prospect Mortgage charged homeowners upfront “discount fees” in exchange for lower interest rates over the life of their mortgages, but then never actually gave the borrowers the promised interest rate discounts.

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