Homeowners sought debt relief, but some were met with foreclosure
Faced with losing their home, many Tennessee residents will go to great lengths to avoid that outcome. That includes working with their loan servicer to pursue available debt relief options. In many cases, those efforts are successful. At times, however, borrowers are subjected to questionable business practices. Protecting Americans from unlawful and unfair actions is the role of the Consumer Financial Protection Bureau (CFPB,) and that entity has recently announced more than $1 million in fines directed at Fay Servicing, a loan servicing company.
According to the results of an investigation launched by the CFPB, Fay Servicing acted to keep borrowers in the dark about their foreclosure prevention options. The company was also accused of moving forward with foreclosure actions against borrowers who were actively seeking assistance with their loans. In some cases, borrowers lost their homes to foreclosure while they were trying to find a path that would allow them to repay their loans and keep their home. That is in violation of CFPB’s mortgage servicing rules.
In a statement issued by the CEO of Fay Servicing, Ed Fay, issue was taken with the use of the word “fine” in relation to the $1.15 million that his company will be required to pay to affected borrowers. Fay also asserts that no penalties were assessed, and that no monitor was assigned to keep watch over the company’s actions moving forward. He argues that very few of the borrowers that the company has worked with were affected by the claim, and that those borrowers who were affected were “well-served” by Fay Servicing.
While there seem to be two very different views on the matter, it cannot be refuted that Fay Servicing is expected to pay more than $1 million in redress to borrowers who were affected by their actions. In addition, the company will also be required to reach out to borrowers who were affected by their actions, and to assist them in searching for debt relief options. For homeowners in Tennessee whose loans are serviced by Fay Servicing, that news may come as a welcome relief.
Source: housingwire.com, “CFPB hits Fay Servicing with $1.15 million fine for illegal foreclosure practices“, Ben Lane, June 7, 2017