Press Release - August 10, 2017: Veterans United Home Loans to Pay $604,000 in Restitution to New York Consumers and a $500,000 Fine to DFS for Retention of Surplus Lender Credits

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Press Release

August 10, 2017

Contact: Richard Loconte, 212-709-1691


Financial Services Superintendent Maria T. Vullo today announced that Mortgage Research Center, LLC, doing business as VAMortgage Center and/or Veterans United Home Loans, will pay approximately $604,000 in restitution to New York consumers, primarily veterans, as part of a consent order entered into with the Department of Financial Services (DFS).  The agreement stems from an examination of Veterans United that found, in at least 322 cases, that the company did not refund surplus “lender credits" to New York borrowers who had obtained from Veterans United a credit to cover estimated closing costs by agreeing to a higher interest rate (known as a “lender credit”), when the ultimate closing costs were lower than such estimated costs, (resulting in what is known as a “surplus lender credit”).   Veterans United did not adjust down the interest rate, reduce the principal balance of the loan, reduce the down payment, provide a cash refund, or pursue any other means of refunding the surplus to the borrower.

“While we appreciate Veterans United’s willingness to make its customers whole, we emphasize that lenders must not take advantage of the moving parts of the loan origination process in order to obtain hidden profits at their customers’ expense.  New York borrowers – and New York veterans in particular – must be confident that they will get what they pay for from their mortgage lenders,” said Financial Services Superintendent Maria T. Vullo.  “Mortgage lenders have a responsibility to make sure their borrowers receive the full benefit of their agreements with their lenders.  DFS will continue to take aggressive action to protect consumers in their financial services needs.”

As part of the settlement, Veterans United will pay full restitution to all known affected consumers via check, including 9% interest, estimated restitution to consumers whose records have been lost, as well as a penalty to the State in the amount of $500,000.  Veterans United also will ensure that in the future any surplus lender credit is immediately returned to the borrower via cash payment or reduction in the principal balance of the loan.

Consumer Tips Regarding Lender Credits

  • If purchasing a lender credit, ask for a copy of the rate sheet, describing the amount of lender credit to which the lender has agreed, or other materials used by the mortgage lender to calculate the amount of closing costs the lender credit is to cover.
  • Compare the total amount of closing costs at the closing of your mortgage loan to the amount of closing costs your lender credit was to cover.  If the total amount of closing costs your lender credit was to cover exceeds your actual closing costs, make certain the surplus is being paid to you by check, or is being used to reduce your principal balance or interest rate.

New York borrowers of other lenders who purchased lender credits that exceeded closing costs, but did not receive a reduction in principal balance, interest rate, or check for the surplus amount, may request assistance from DFS by calling (212) 480-6400 or toll-free (800) 342-3736 (Monday through Friday, 8:30 a.m. to 4:30 p.m.), or by filing a complaint at


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