Allegations that Fay Servicing LLC illegally moved forward with foreclosures on distressed borrowers who were actively seeking help have been settled.
The Chicago-based organization is accused of keeping borrowers in the dark about the process of applying for foreclosure relief.
In addition, Fay allegedly initiated or moved forward with the foreclosure process against borrowers who were already applying for help.
Those allegations were made by the Consumer Financial Protection Bureau, which claims the actions violated its servicing rules.
An announcement Wednesday from the CFPB said that Fay
has agreed to a consent order to resolve the issue.
The agreement requires the servicer to pay up to $1.15 million to borrowers who were impacted by its actions.
Fay must also reach out to impacted borrowers to offer them options, where possible, to avoid foreclosure. Fay cannot take any foreclosure actions if the borrower responds within 60 days.
In addition, Fay must stop the illegal practices and create
policies and procedures that bring its operations into full compliance with the law.
