CFPB Busts Fay Servicing For Unlawful Foreclosures Forces Them To Pay $5 Million Fine
The CFPB Busts Fay Servicing And Mandates A $5 million Payment. Agency Also Imposes Compensation Limits On CEO Edward Fay
The CFPB has ordered Florida-based Fay Servicing to pay a $2 million fine. The agency says Fay violated mortgage servicing laws and failing to comply with a 2017 agency order.
The 2017 order found Fay Servicing engaged in prohibited foreclosure actions. They also neglected to offer available mortgage assistance to borrowers and overcharged for private mortgage insurance. Of Course, these are violations of the CFPB’s servicing rules.
In this latest action, CFPB cited the company as having failed to implement the 2017 Order’s requirements. The order required the company not to engage in prohibited foreclosure activity. The 2017 order also required Fay to properly maintaining data about borrowers’ loss mitigation applications.
The CFPB determined that Fay Servicing violated the 2017 order. Fay also violated RESPA and TILA. Additionally, the CFPB found them in violation of the Homeowners Protection Act and the Consumer Financial Protection Act.
Announced the order last week and filed as a consent order. The CFPB not only imposed the civil money penalty but mandated an additional $3 million be paid to redress consumers. This included $2 million investment to enhance the company’s servicing technology and compliance systems. The order also places limits on CEO Edward Fay’s compensation if he does not ensure compliance.
Rohit Chopra, director of the CFPB, said in the Bureau’s press release:
Fay Servicing Chief Chief Marketing Officer Mike Wojcik told the media called the CFPB’s latest action heavy handed. He added the company agreed to settle to avoid lengthy litigation.
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