The Chicago-based servicer allegedly kept customers in the dark about their loan-modification options and illegally launched foreclosure processes on borrowers who were actively seeking help
The Consumer Financial Protection Bureau has slapped a mortgage servicer with up to $1.5 million in penalties for failing to provide required foreclosure protections.
The CFPB took action against Chicago-based Fay Servicing, which services loans for customers across the country “The Bureau found that Fay violated the CFPB’s servicing rules by keeping borrowers in the dark about critical information about the process of applying for foreclosure relief,” CFPB Director Richard Cordray said.
The CFPB said it also found instances where Fay illegally launched or pushed forward with the foreclosure process on borrowers who were actively trying to save their homes.
Servicers generally have to send an acknowledgement notice when they receive an application for foreclosure relief. The notice must state whether additional documents or information are required to complete the application. Servicers also generally have to send an evaluation notice on completed applications, explaining what kind of foreclosure relief is being offered and giving a deadline to accept or reject the offer, along with a list of rights borrowers’ have to appeal a servicer’s decision. According to the CFPB, Fay failed to send both acknowledgement and evaluation notices with relevant, correct information, “putting the onus on borrowers to try to determine what else they had to do to attempt to save their homes or otherwise avoid foreclosure.”
The company also illegally launched or continued foreclosure processes against borrowers who were applying for help, according to the CFPB.
Under the agency’s enforcement action, Fay Servicing will have to pay $1.5 million in redress to consumers and offer customers who were the subject of illegal actions the opportunity to avoid foreclosure.
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The CFPB took action against Chicago-based Fay Servicing, which services loans for customers across the country “The Bureau found that Fay violated the CFPB’s servicing rules by keeping borrowers in the dark about critical information about the process of applying for foreclosure relief,” CFPB Director Richard Cordray said.
The CFPB said it also found instances where Fay illegally launched or pushed forward with the foreclosure process on borrowers who were actively trying to save their homes.
Servicers generally have to send an acknowledgement notice when they receive an application for foreclosure relief. The notice must state whether additional documents or information are required to complete the application. Servicers also generally have to send an evaluation notice on completed applications, explaining what kind of foreclosure relief is being offered and giving a deadline to accept or reject the offer, along with a list of rights borrowers’ have to appeal a servicer’s decision. According to the CFPB, Fay failed to send both acknowledgement and evaluation notices with relevant, correct information, “putting the onus on borrowers to try to determine what else they had to do to attempt to save their homes or otherwise avoid foreclosure.”
The company also illegally launched or continued foreclosure processes against borrowers who were applying for help, according to the CFPB.
Under the agency’s enforcement action, Fay Servicing will have to pay $1.5 million in redress to consumers and offer customers who were the subject of illegal actions the opportunity to avoid foreclosure.
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