Fay Servicing, LLC is a mortgage servicer that at times also acts as a debt collector. This class action brings suit against Fay, alleging that it has a “pattern and practice of failing to provide homeowners with an accurate statement regarding the mortgages that it services.”
The allegations include violations of the Real Estate Settlement Procedures Act (RESPA), the Truth in Lending Act (TILA), and the Fair Debt Collection Practices Act (FDCPA).
RESPA provide rules for servicers answering customer correspondence about mortgages. Borrowers may submit a qualified written request (QWR) to ask for information related to servicing or to claim that the borrower’s account is in error.
Regulation X also provides rules for mortgage markets. It specifies two additional categories of correspondence, Requests for Information (RFIs) and Notices of Error (NOEs). Although these overlap with QWRs, they are not identical. For example, they do not require that RFIs relate directly to servicing. Also, Regulation X provides additional rules for responses.
In this case, plaintiff John E. Mobley bought a property in June 1979. In January 2007, he took out a mortgage on it for $137,507.11. Because of financial hardship, he eventually defaulted. Foreclosure proceedings were begun in May 2019.
In June 2021, he sent a written request to Fay, the servicer, for a payoff statement. Fay received it on July 6, 2021 and sent an answer entitled “Payoff Statement” around July 13, 2021.
The complaint alleges that the payoff statement was inaccurate because it contained a line item of more than $15,000 identified only as “Recoverable Corporate Advances.” The individual items and amounts making up this charge are not disclosed and no explanation is provided. The figures in the statement differed from those in the October 2020 final judgment.
The complaint alleges that estimated amounts and items that have not yet been incurred cannot be charged in reinstatements of loans. It quotes the findings of a previous court case as supporting this. According to the complaint, the charges also violate the mortgage loan agreement with Mobley.
Because Mobley did not consider the statement to be accurate or sufficient, he sent another letter to Fay, and eventually a third letter.
The complaint alleges that Fay “fail[ed] to provide [Mobley] with the information and documentation requested, or an explanation why the information sought was unavailable” during the time frame specified by RESPA and Regulation X.
The class for this action is all persons in the US who (1) sent Fay a notice or request, in the form of a QWR, RFI, NOE, or another covered inquiry, (2) to whom Fay did not provide a complete response to the information requested or for whom it did not perform an investigation into the errors asserted, based upon an exception not authorized by RESPA or Regulation X, and (3) who were charged for fees that were not itemized or explained on a payoff statement, within a category identified only as “Recoverable Corporate Advances.”
Article Type: LawsuitTopic: Loans
Most Recent Case Event
Fay Servicing Payoff Inquiries Regulation X, RESPA Complaint
December 13, 2021
Fay Servicing, LLC is a mortgage servicer that at times also acts as a debt collector. This class action brings suit against Fay, alleging that it has a “pattern and practice of failing to provide homeowners with an accurate statement regarding the mortgages that it services.”
Fay Servicing Payoff Inquiries Regulation X, RESPA ComplaintCase Event History
Fay Servicing Payoff Inquiries Regulation X, RESPA Complaint
December 13, 2021
Fay Servicing, LLC is a mortgage servicer that at times also acts as a debt collector. This class action brings suit against Fay, alleging that it has a “pattern and practice of failing to provide homeowners with an accurate statement regarding the mortgages that it services.”
Fay Servicing Payoff Inquiries Regulation X, RESPA Complaint