The Consumer Financial Protection Bureau issued a consent order against Fay Servicing, LLC, a residential mortgage servicer based in Tampa, Florida, on 21 August 2024, finding that the company had violated a prior enforcement order issued by the Bureau in June 2017 as well as multiple federal consumer protection statutes. The order requires Fay Servicing to pay a combined $7 million across consumer redress, civil penalties and compliance investment, and includes a provision restricting the compensation of chief executive Edward Fay if the company fails to satisfy its remedial obligations.
The CFPB found that Fay Servicing had violated Regulation X under the Real Estate Settlement Procedures Act, the Homeowners Protection Act, Regulation Z under the Truth in Lending Act, and the Consumer Financial Protection Act. These statutes govern how mortgage servicers must handle loss mitigation applications, escrow account management, private mortgage insurance cancellations, billing statements and borrower enquiries.
PENALTY STRUCTURE COMBINES REDRESS, CIVIL FINE AND COMPLIANCE INVESTMENT
Under the consent order, Fay Servicing is required to pay $3 million in consumer redress to borrowers harmed by its non-compliant servicing practices, $2 million as a civil money penalty to the CFPB victims relief fund, and a further $2 million directed specifically towards upgrading the company's mortgage servicing technology and compliance management systems.
BREACH OF THE 2017 ORDER
The 2024 consent order stems in part from findings that Fay Servicing did not fully comply with obligations it accepted under the 2017 CFPB order.