A mortgage servicer will pay $3.2 million in fines and restitution to settle an enforcement action with the Attorney General of Massachusetts, which accused the company of engaging in unfair and deceptive conduct by “harassing” individuals with excessive debt collection calls, among other claims.
A copy of the assurance of discontinuance in the action against Fay Servicing can be accessed by clicking here.
The company was also accused of failing to take required steps to help homeowners avoid foreclosure, failing to inform borrowers of their right to request verification of the amount of their debt, unfairly charging foreclosure-related fees before first obtaining the authority to foreclose, and failing to send required debt validation notices.
Under state law in Massachusetts, collectors and creditors are limited to making two calls in a seven-day period. Fay Servicing called individuals “multiple times, at multiple phone numbers and on multiple days in a seven-day period,” in excess of the two-calls-per-week restriction, according to the AOD.
“Mortgage servicers are required to make a good faith effort to help prevent unnecessary foreclosures and keep Massachusetts families in their homes,” said Maura Healey, the Attorney General of Massachusetts, in a statement. “This settlement will help put money back in the pockets of borrowers who were harmed and ensure that this company complies with the law.”
Fay Servicing will pay borrowers $2.7 million in the form of principal forgiveness on eligible loans and pay a fine of $500,000. The company also agreed to “make significant changes” to its business practices.
The company was also accused of violating state law in Massachusetts by offering loan modifications to borrowers that required large, up-front “good faith down payments” which were not subject to an affordability analysis.