Taking prohibited foreclosure actions against borrowers requesting mortgage assistance, and other deficiencies, have resulted in $5 million in redress and penalties ordered by the federal consumer financial protection bureau against a Tampa-based mortgage servicer, the agency said Wednesday.
In a release, the Consumer Financial Protection Bureau (CFPB) said it ordered Fay Servicing, a Delaware company with principal offices in Tampa, to pay a $2 million civil money penalty (CMP) for violations of mortgage servicing laws, as well as for violations of a 2017 agency order that addressed its illegal foreclosure practices. The agency also ordered the firm to pay consumer redress of $3 million and to invest $2 million to update its servicing technology and compliance management systems.
The bureau’s order also places compensation limits on the firm’s board chairman and CEO, Edward Fay, if he does not take actions necessary to ensure compliance with the order.
According to the CFPB, the firm failed to implement the requirements of a 2017 order against it by the bureau that addressed its illegal foreclosure practices. The CFPB said the company failed to implement the order’s requirements and continued to break the law. That included, the agency said, taking the prohibited foreclosure actions against borrowers requesting mortgage assistance, failing to offer borrowers mortgage assistance options available to them, and overcharging for private mortgage insurance.
More specifically, the CFPB said, the firm harmed consumers by:
- Flouting a law enforcement order and violating rules that protect borrowers from prohibited foreclosure activities.
- Failing to provide full information to borrowers about their loss mitigation options.
- Overcharging for private mortgage insurance and late fees.