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CFPB Settles With Fay Servicing

Phil Hall
Jun 07, 2017
The Consumer Financial Protection Bureau (CFPB) has issued a proposal that would alter the reporting requirements for banks and credit unions that issue home equity lines of credit (HELOCs)

The Consumer Financial Protection Bureau (CFPB) has reached an agreement with Chicago-based Fay Servicing for $1.15 million for allegedly failing to provide mortgage borrowers with proper information and protections against foreclosure.
 
The CFPB charged the company with failing to provide borrowers with acknowledgment notices upon the receipt of a foreclosure relief application and an evaluation notice that defines the available foreclosure relief procedures to follow if the servicer accepts or denies a request. Fay Servicing was also accused of launching and, in some cases, completing foreclosure proceedings even when homeowners were being considered for options to avoid foreclosure.  
 
“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,” said CFPB Director Richard Cordray. “CFPB will continue to hold servicers accountable for violations of consumer protection laws.”
 
Fay Servicing issued a statement insisting that it "has always been committed to delivering a high-quality customer service experience to borrowers while complying with all applicable legal and regulatory requirements. The isolated claims concern a small fraction of the more than 85,000 borrowers whose mortgages Fay Servicing has serviced since it was founded in 2008. While Fay regrets any instance in which it did not comply with a regulatory requirement, we believe the affected borrowers were well-served during the loss mitigation process using Fay’s high-touch and borrower-centric approach to servicing severely delinquent loans. The company reached this agreement with the CFPB in the interest of putting this matter behind it and focusing on the needs of its clients, employees and borrowers."

 
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