Fay Servicing has reached a settlement involving $3 million in restitution and a $2 million civil penalty due to violations of mortgage servicing laws. The company failed to place foreclosure holds promptly and inadequately disclosed borrower preferences affecting loss mitigation options. Additionally, it did not cancel private mortgage insurance on time and imposed excessive late fees. Under the 2024 consent order, Fay Servicing will invest $2 million in technology upgrades and face compensation restrictions for its Chairman and CEO related to compliance failures. Affected consumers will receive the restitution payment.
Fay Servicing paid $3 million in restitution to consumers and a $2 million civil penalty after violating mortgage servicing laws, according to the CFPB.
The company has committed to invest at least $2 million to upgrade its technology and compliance management systems under the 2024 consent order.
Fay Servicing's Chairman and CEO Edward Fay faces compensation restrictions if he fails to ensure compliance with the terms of the consent order.
The CFPB confirmed that the $3 million paid by Fay Servicing will be distributed to affected consumers as part of the August 2024 settlement.
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