When an individual or a family is faced with serious financial problems, few things are more stressful than the risk of losing their home. In many cases, home ownership was a long-held goal, and achieving that goal was a significant source of pride, and a realization of the American Dream for Connecticut residents. When it appears that foreclosure is imminent, many people will go to great lengths to avoid that outcome. Unfortunately, that leaves them vulnerable to a number of questionable business actions in addition to downright scams.
The Consumer Financial Protection Bureau (CFPB) has fined Fay Servicing more than $1 million. That fine is intended as a response to what the CFPB calls "illegal foreclosure practices" that harmed borrowers that the company claimed to have served. Specifically, the company was found to have kept borrowers in the dark regarding information about how they could apply for foreclosure relief. Fay Servicing was also found to have moved forward with foreclosing against borrowers who were in the process of seeking and applying for assistance. In certain cases, the company pushed foreclosures through to completion even as the homeowners were actively pursuing options to allow them to keep their homes.
Of course, Fay Servicing takes a different view of these actions taken by the CFPB. In a statement issued by the company's CEO, issue was taken with the characterization of the required $1.15 million payment as a "fine." Ed Fay also points out that the CFPB did not issue a penalty, and is not requiring a monitor of the company's actions moving forward. He asserts that the payments that will be made to consumers represent only a small portion of the total number of borrowers that the company has serviced over the past decade.
While there may be different ways to view the settlement made between the CFPB and Fay Servicing, the fact remains that an investigation revealed actions and practices that were against the rules laid out for mortgage servicing. As a result, affected borrowers will receive a total of $1.15 million in redress, and will be given an opportunity to pursue foreclosure avoidance options. That is a good outcome for homeowners in Connecticut and across the nation.
Source: housingwire.com, "CFPB hits Fay Servicing with $1.15 million fine for illegal foreclosure practices", Ben Lane, June 7, 2017