CFPB Enters Consent Order with Mortgage Servicer Fay Servicing
On June 7, 2017, the Consumer Financial Protection Bureau announced entry of a consent order against mortgage servicer Fay Servicing, LLC for alleged violations of the Bureau’s 2014 mortgage servicing rules.
The CFPB alleged that Fay Servicing failed to provide timely notices to delinquent borrowers acknowledging that their loss mitigation applications were complete or incomplete, and failed to provide timely notices to delinquent borrowers of the foreclosure mitigation options available to them. The CFPB further alleged that Fay Servicing proceeded with foreclosure actions against borrowers who had applied for loss mitigation options while their applications were under consideration. According to the Bureau, these issues constituted violations of multiple rules under the 2014 mortgage servicing rules.
The order requires Fay Servicing to set aside $1.15 million for the purpose of providing redress to affected borrowers. The company must provide affected customers with notice of the funds and with certain protections from foreclosure actions during the company’s redress efforts. The CFPB will collect any unclaimed redress payments and may at its discretion use the remainder to provide additional redress or may deposit the remaining funds in the U.S. Treasury as disgorgement. The order also requires Fay Servicing to implement compliance policies and procedures and to comply with federal law.
In a press release, Fay Servicing stated that “any instance in which it did not comply with a regulatory requirement” relates to a “small fraction” of the company’s borrowers and that affected borrowers were assisted by the company’s loss mitigation process.