The Consumer Financial Protection Bureau issued an order imposing new penalties on Fay Servicing for new alleged violations and issues related to compliance with a prior settlement involving
The company will pay a $2 million civil money penalty, $3 million in consumer redress and spend $2 million on technology and compliance management. Chairman and CEO Ed Fay's compensation can be temporarily withheld during any future periods of noncompliance.
"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 in a press release.
The company said it doesn't see eye-to-eye with the bureau when it comes to the claims in the settlement but agreed to enter into it without admission of wrongdoing to end the dispute, which otherwise might have dragged on longer and strained resources it preferred to devote to operations and customer service.
"Fay continues to strongly disagree with the CFPB's claims in this matter, but we made a business decision to settle," a company spokesperson said in an email.
In addition to alleging persistent dual tracking,
Laws the CFPB alleged Fay Servicing violated included the Real Estate Settlement Procedures Act, the Truth in Lending Act, the Homeowners Protection Act, and the Consumer Financial Protection Act.
Alleged violations revolve around claims Fay Servicing did things like not stopping foreclosure actions "beginning on the day the borrower submitted the documents making their loss mitigation application complete or facially complete."
In addition to disagreeing with the CFPB's findings as to whether it was in compliance with such requirements, Fay Servicing called the consent order a "heavy handed" measure that follows a long period of "cooperation and transparency" with the bureau.
"We have helped thousands of homeowners across the country stay in their homes using borrower-friendly processes that are at the center of this matter, and that were disclosed to the CFPB," the company said in its statement.
The servicer also showed concern that specifically taking actions that involve CEOs has become "an agenda" item at the bureau and "one that seems to apply disproportionately to smaller companies.
"We are proud of our record and our team's commitment to borrowers," the company's spokesperson said. "While we disagree with the CFPB's positions, we are pleased to put this matter behind us."
