On July 1, the Consumer Financial Protection Bureau under acting director Russell Vought dropped its consent order against mortgage servicer Fay Servicing and waived any alleged noncompliance.
The company has a criminal history that reads like a laundry list.
According to the order, the company violated mortgage servicing laws, including failure to place foreclosure holds in a timely manner and inadequate disclosures regarding how borrower preferences could affect eligibility for loss mitigation options.
In addition, the company allegedly failed to cancel private mortgage insurance (PMI) on time and charged late fees exceeding what was permitted under borrowers’ mortgage contracts.
The CFPB also said Fay Servicing violated a 2017 consent order that addressed similar issues, claiming the company “continued to break the law.”
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Vought justified the termination of the order by stating that Fay Servicing fulfilled “several” of its obligations under it. The company paid $3 million in compensation for the consumers that it scammed and a mere $2 million civil money penalty. The company effectively had to be monitored by the CFPB to prevent it from breaking the law time and again; it had to invest at least $2 million to keep its technology and compliance management systems up to date, and the Chairman and CEO, Edward Fay, had his compensation restricted if he did not comply.
Without a functional CFPB, it remains to be seen if Fay Servicing will exploit the privation of any meaningful consumer enforcement.
