this Consumer Financial Protection Bureau (CFPB) has reached a settlement with the State of Florida Fay Maintenance Regarding the illegal conduct of foreclosure. The deal includes a $2 million penalty and potential restrictions on CEO compensation.
A company spokesperson wrote to house line “Fay continues to strongly disagree with the CFPB’s assertions in this matter, but we have made the business decision to settle.”
The spokesperson added: “While we disagree with the CFPB’s position, we are pleased to put this matter behind us so that we can continue to focus on what we do best: supporting homeowners across the country, including during these difficult economic times. .
An order issued by the CFPB on Wednesday cited violations of the mortgage servicing law, as well as a previous 2017 order addressing the same issues. The CFPB alleged that Fay Servicing “failed to enforce the 2017 measures and continued to violate the law.”
The company was also ordered to pay $3 million to customers, invest at least $2 million to update its technology and compliance management systems, and limit the pay of Chairman and CEO Edward Fay if he fails to ensure compliance current command).
In 2017, the CFPB accused Fay Servicing of failing to provide borrowers with protection against foreclosure and leaving them “in the dark” about key information about the foreclosure relief application process. At the time, the CFPB ordered the company to cease illegal practices and pay $1.15 million to affected customers.
However, the current order notes that Fay Servicing failed to promptly suspend foreclosures and failed to establish written policies and procedures to ensure compliance.
It also cited how Fay Servicing’s failure to inform borrowers of their preferences limited the company’s ability to evaluate their options when they sought loss mitigation options.
Additionally, the company failed to stop collecting private mortgage insurance on time and charged late fees that were higher than allowed under the mortgage contract.
“Fay Servicing ignored enforcement orders and took steps to foreclose on homeowners covered by the Housing Preservation Act,” CFPB Director Rohit Chopra said in a statement. “If Fay continues to violate the law, the CFPB’s order will make the CEO wages are at risk.”
A spokesman for the company said Fay has helped “thousands of homeowners across the country stay in their homes using borrower-friendly processes that were at the heart of this matter, which was disclosed to the CFPB as early as 2017.” Condition.
“However, after a decade of cooperation and transparency with the CFPB, including throughout this investigation, we are faced with a choice: engage in lengthy litigation proceedings to defend our records, or agree to a settlement without recognizing the CFPB’s assertion that will allow us to move forward. We have chosen to resolve this case so that we can focus our time and efforts on supporting our borrowers.
The spokesperson added, “The Consumer Financial Protection Bureau’s heavy-handed tactics are a practice our industry is all too familiar with, and in this case it does nothing to help borrowers or the industry as a whole. At the same time, the CFPB is proposing in this resolution and our CEO’s decision is a strategy based on agenda items that include the CEO, although this strategy appears to apply disproportionately to smaller companies.
