Movement Mortgage overcharged mortgage borrowers and operated in the state of California without a license, the California Department of Business Oversight said on Monday.

The CDBO announced Monday that it reached a $1.1 million settlement with Movement Mortgage to resolve allegations that the company serviced loans without a California state license and violated the state’s per diem interest rules.

California law prohibits lenders from servicing residential loans without first obtaining servicing authority from the CDBO.

The CDBO said that its investigation found that Movement serviced loans in California without being properly licensed.

The settlement requires Movement to refrain from loan servicing activities until licensed by the state.

Movement will also pay $1 million in penalties to the DBO for past violations and $125 for each additional violation identified by an independent audit.

As part of the settlement, Movement agreed to an independent auditing of its loan originations and to implement revised policies and procedures to prevent future violations of California law.

The company was also found to have violated the “per diem” stipulation in California law, which states that lenders cannot start charging interest on mortgages prior to the business day before the loan proceeds are disbursed and may not charge fees that exceed actual recording costs.

According to the CDBO, an investigation found that Movement Mortgage violated the state’s per diem interest rules on at least 1,347 borrowers.

As part of the settlement, Movement Mortgage will refund the affected borrowers. The total refund is expected to total more than $141,000.

The settlement resolves violations discovered in a 2016 regulatory examination conducted by the CDBO.

Movement becomes the latest in a string of mortgage companies fined for violating California’s per diem rules. Exactly one week ago, Nationstar Mortgage, the nonbank also known as Mr. Cooper, reached a $9.2 million settlement with the CDBO for various servicing issues, including per diem violations.

And in just the last few years, Prospect MortgagePrimeLending, and United Shore Financial Services, the parent company of United Wholesale Mortgage, all reached settlements with the CDBO over similar issues.

This was also the second time in five years that Movement has run afoul of the CDBO.

In 2012, California examiners found per diem overcharges in Movement’s loans. After that examination, Movement refunded nearly $7,300 to 65 customers. No penalties were assessed at that time, according to the CDBO.

“This closes the second and I hope the last action the DBO is forced to take against Movement Mortgage,” DBO Commissioner Jan Lynn Owen said. “I am pleased with the settlement, which compensates borrowers for the financial harm they suffered and requires the firm to take steps to prevent this from happening again.”

In a statement provided to HousingWire, Movement Mortgage Communications Director Adam O’Daniel said that the company does not foresee any future issues with the CDBO after this settlement. In fact, O'Daniel said that the CDBO approved Movement's servicing application as part of the settlement.

“We are pleased to resolve the per diem interest matter with the California Department of Business Oversight in order to prevent future errors from occurring," O'Daniel said. “The state of California’s audit and our internal review resulted in preventative measures put in place to ensure compliance. We are also pleased to announce the state of California has agreed to approve Movement Mortgage’s residential mortgage loan servicing application as part of today’s settlement.”

[Update: This article is updated with a statement from Movement Mortgage.]