Fay Servicing, a Florida-based company, recently settled a case with the Consumer Financial Protection Bureau (CFPB) over foreclosure violations, resulting in a $2 million fine and potential constraints on the CEO’s compensation. Despite disagreeing with the CFPB’s claims, the company made a strategic decision to settle, allowing them to refocus on supporting homeowners facing financial difficulties.
Violations and Consequences
- Violations of mortgage servicing laws and a prior 2017 order were cited by the CFPB, alleging non-compliance and disregard for legal measures.
- Fay Servicing was ordered to pay $3 million to customers, invest $2 million in updating technology and compliance systems, and restrict the CEO’s compensation if non-compliance persists.
Past vs. Current Issues
- In 2017, the CFPB accused Fay Servicing of foreclosure protection failures, leading to a settlement of $1.15 million and a cessation of illegal practices.
- The recent order highlighted failures to suspend foreclosures promptly, lack of compliance policies, and negligence in informing borrowers of loss-mitigation consequences.
Future and CEO Involvement
- The CEO’s pay is at stake if Fay Servicing continues to breach the law, emphasizing the importance of adherence to the current order.
- Despite past accomplishments and help provided to homeowners, a settlement was seen as the most viable option to move forward and prioritize borrower support.
In conclusion, while disputes and disagreements exist, prioritizing borrower interests and industry standards should be the focus. Fay Servicing’s willingness to settle signifies a commitment to move past legal entanglements and concentrate efforts on aiding borrowers in need.
