The Consumer Financial Protection Bureau (CFPB) has ordered mortgage servicer Fay Servicing to pay up to $1.15 million in redress to borrowers for “failing to provide mortgage borrowers with the protections against foreclosure that are required by law.”
The bureau claims that Fay Servicing violated the CFPB’s servicing rules “by keeping borrowers in the dark about critical information about the process of applying for foreclosure relief,” according to a press release.
More specifically, the bureau says Fay Servicing “failed to send or timely send both acknowledgment and evaluation notices with the 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 bureau also accuses Fay Servicing of “illegally moving forward with the foreclosure process while borrowers were actively seeking help to save their homes.”
“When borrowers timely submit a complete application during certain time periods, a servicer is prohibited from starting or moving forward with various aspects of the foreclosure process for prescribed periods of time,” the bureau says in its release. “Fay Servicing began, and in some cases completed, foreclosure proceedings even when homeowners were being considered for options to avoid foreclosure.”
In addition to paying redress to borrowers, Fay Servicing must also “solicit consumers who were the subject of illegal actions to offer them the opportunity to pursue options to avoid foreclosure, to the extent possible.”
The company is also prohibited from taking any foreclosure actions against the consumers during the outreach and solicitation process, as prescribed in the servicing rules.
If a consumer responds to Fay Servicing’s solicitation within 60 days, the company must not take any foreclosure actions against that consumer.
To read the full release, click here.