The Consumer Financial Protection Bureau (CFPB) ordered Fay Servicing to pay a multi-million-dollar penalty for violations of mortgage servicing laws, as well as violations of a past enforcement order.
In 2017, the CFPB issued an order against the company for taking prohibited foreclosure actions against borrowers requesting mortgage assistance. The company also failed to offer borrowers mortgage assistance options available to them and overcharged for private mortgage insurance.
However, the CFPB said the company failed to implement the order’s requirements and continued to break the law.
“Fay Servicing ignored a law enforcement order by taking steps to foreclose on homeowners who are shielded by housing protection laws,” CFPB Director Rohit Chopra said. “The CFPB’s order will put the CEO’s pay at risk if Fay continues to break the law.”
In addition to a $2 million civil money penalty, the CFPB’s order requires Fay Servicing to pay consumer redress of $3 million and to invest $2 million to update its servicing technology and compliance management systems.
Further, the CFPB order also puts compensation limits on Edward Fay, the company’s chairman and CEO if the actions necessary to ensure compliance with the order are not taken.
Fay Servicing is a nonbank mortgage servicer, responsible for, among other things, administering foreclosure relief programs to help struggling borrowers.