Fay Servicing to Pay $5 Million for Violating CFPB Settlement

A Tampa, Fla.-based mortgage servicing company will pay a total of $5 million and its CEO faces potential compensation limits for failing to comply with a 2017 enforcement action from Consumer Financial Protection Bureau.

Fay Servicing, a unit of Fay Financial LLC, didn’t make changes to its loss mitigation programs aimed at making it easier for struggling homeowners to avoid foreclosure—such as putting immediate holds on foreclosure upon receipt of mitigation applications—as required by the CFPB’s previous order, the agency said in a Wednesday enforcement action.

Fay’s failure to update those programs meant borrowers weren’t informed about the process ...