RSSThe Consumer Financial Protection Bureau fined nonbank mortgage servicer Fay Servicing $5 million for foreclosing on homeowners who are protected by housing protection laws.
The Delaware-based LLC allegedly failed to implement a 2017 CFPB order for not providing mortgage borrowers with the foreclosure protections required by consumer financial protection laws. The 2017 order included a $1.15 million fine, and required Fay Servicing to adjust its procedures, practices and policies to protect mortgage borrowers against prohibited foreclosures.
Fay Servicing also failed to provide complete information to borrowers about their loss mitigation options, didn’t offer borrowers mortgage assistance options and overcharged for private mortgage insurance. “Fay Servicing failed to inform borrowers how the preference they indicated could end up limiting the options for which Fay Servicing would evaluate the borrowers,” according to the CFPB.
The $5 million fine included $3 million in redress to customers the company took illegal foreclosure actions from and from whom Fay Servicing received private mortgage insurance payments. The company was also ordered to invest $2 million to update servicing technology and compliance management systems.
The CFPB plans to place compensation limits on Chair and CEO Edward Fay, if he does not take actions needed to ensure compliance.
