Consumer complaint received 2019-06-19
Company: Fay Servicing, LLC
State: OH
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
TO : Consumer Financial Protection Bureau RE : Fay Mortgage Services a division of Fay Servicing LLC Borrower Account Number - XXXX Regulated by Colorado Division of Real Estate CC : Colorado Division of Real Estate XXXX XXXX XXXX XXXX XXXX, Co XXXX XXXX CC : Fay Servicing , LLC XXXX XXXX XXXX XXXX, XXXX   XXXX XXXX, IL XXXX Attention : XXXX XXXX XXXX and XXXX XXXX General Counsel Facsimile : ( XXXX ) XXXX and ( XXXX ) XXXX XXXX XXXX : Fay Servicing LLC NMLS # XXXX Dear CFPB Complaint Department, I am writing to request your assistance on a serious issue Im facing with Fay Servicing LLC. Attached below this cover letter is a detailed letter that outlines the issues surrounding my complaint. This letter was sent directly to Fay Servicing on XX/XX/XXXX. As of this date I have received no response from Fay Servicing. This lack of response has been a typical experience regarding my numerous requests ( over 26 times ) on this matter over the last few years. 



Specifically, the issue concerns my payoff balance which is being incorrectly calculated by Fay Servicing who purchased the loan from XXXX as an in-flight modification in XXXX. This was the second modification that XXXX completed for me after my suffering a XXXX XXXX and the global financial crisis which had cost me a very high paying job and thereby impacting my ability to pay my mortgage. The deferred balances on the deferral was then written off as a cancellation of debt by XXXX which you will find proof as an attachment from the IRS below. All of this has been shared with Fay Servicing over the years on multiple occasions. In an effort to resolve this issue, I repeatedly requested copies of modification documents, the amount that Fay Servicing ( or their investor client ) had paid for the mortgage loan they acquired from XXXX ( which would provide an insight into the balance question and the simple math calculation which I explain in detail in the letter below ) and requesting the amount Fay ( or their investor client ) had paid for the payoff deferral, if any, which is the major source of the problem. Thus far, they have been unable to provide this information. 



The real estate crisis also negatively impacted the value of my home from $ XXXX appraisal in XXXX to less than $ XXXX at the height of the financial crisis. After the loan was purchased by XXXX, I leveraged all my assets to bring the loan current and avoid foreclosure in XXXX. Although I realize I became delinquent in my payments, I feel my personal commitment to not walk away from my obligations has not been embraced or respected ; rather has been met with multiple difficulties from financial institutions. This includes an interest rate increase ( per the modification ) in XXXX to 5.75 % which was well above the market at that time ( in the 3.5 % range ) because lenders ( including Fay Mortgage XXXX would not allow me to refinance a previously modified loan. 



For 4 years I have been trying to sell my home believing that the market would recover my lost equity. On XX/XX/XXXX, I completed the sale of the home for $ XXXX and paid off the balance that Fay Servicing provided the Title Company. The payoff balance Fay provided was {$110000.00} above what I thought the payoff would be ; in addition, they also charged me multiple late fees totaling over $ XXXX which Ive explained below. I requested help from Fay to resolve this issue, or at a minimum provide me with a reconcilement proving the higher payoff balance was correct. I was concerned if I did not close on the sale of the property it might be a long wait to find another buyer. I paid off the loan on XX/XX/XXXX to include the additional {$110000.00} and $ XXXX in fees. In addition to the incorrect calculation of the deferred balance of {$110000.00}, as stated above Fay Servicing also charged me multiple late fees totaling over $ XXXX. Upon paying the back payments in XXXX I was told by a representative from Fay Servicing that as long as my payment was received in the current month they would not be charging the late fees ( Ive asked XXXX to check their phone recordings to find these conversations for validation ) and given my limited income I informed them I would need to pay at the end of the month rather than the beginning. In full transparency, I was told by a representative in XXXX XXXX that this procedure for late fees was being changed and from that time forward the fee would be charged if not received before the XXXX. I requested that they then waive the previous fees ( approx $ XXXX ) and I would be responsible for all late fees after that time. Fay ignored my numerous requests to address this issue as well, and at closing Fay Servicing charged me the entire $ XXXX amount. 



Please provide assistance to resolve this issue. I do have legal counsel to recover the estimated {$130000.00} ( {$110000.00} deferred amount + {$21000.00} in late fees ) as well as any punitive damages possible. Due to cost of lawyers I am hoping your organization can assist before I fully engage counsel. While I appreciated the assistance XXXX gave me with the modifications to keep me and my family in our home during those tough years, the circumstances that resulted after the sale of my mortgage to Fay Servicing have been highly stressful and in my opinion unfair and illegal. Fay has taken advantage of my hard work to resolve my obligations by overcharging me at every opportunity and compounding the issue by ignoring my numerous efforts for resolve. 



Thank you, XXXX XXXX XXXX COMPLAINT LETTER TO FAY BELOW Re : Borrower -  Loan # XXXX Fay Servicing XXXX XXXX XXXX XXXX XXXX XXXX, XXXX XXXX XXXX copies to CFPB Error Resolution notice under 12 C.F.R 1024.35 Fay Servicing and cc 'd XXXX XXXX CEO Fay Servicing XXXX XXXX XXXX XXXX IL XXXX XXXX : Mortgage Loan # XXXX This letter provides information that Fay Servicing is relying on incorrect payoff balance data with the request to release the Title for the property at XXXX XXXX XXXX XXXX XXXX XXXX and causing me unjust and unfair damages accordingly. Since XXXX I have inquired over 26 times both by phone and in writing that the payoff on my loan is incorrect and have sought help from a supervisor or manager to resolve the matter ( you will hear my request on the dozens of recorded phone calls with 17 different Fay representatives during the timeframe of XXXX to present ). Your website does not allow me to look at statement history for previous years nor does it allow a detailed look since loan inception of amortization history so much of the details I provide here were given to me directly by your reps who apparently can see more than the website than borrowers can see. 



As background, Fay Servicing acquired my loan from XXXX ( XXXX was also my former employer ) in XXXX as an in flight modification loan. XXXX had modified the loan twice since the original loan for {>= $1,000,000} due to my suffering a serious health issue, losing my income and coinciding with the global financial crisis beginning in XXXX. The second modification by XXXX occurred just prior to the time that Fay purchased the loan in XXXX ( in flight ). Prior to Fay taking over the loan and under the terms of the modification, XXXX wrote down {$400000.00} of principal and sent me a tax filing notice ( see attached ) of that amount. The {$400000.00} write-down was the combined amount of the two previous modification agreements and deferred balances that XXXX completed on my loan. 



In XXXX Fay began Foreclosure proceedings against me for delinquent payments during the negotiation of the second modification and subsequently to Fay taking over the loan. Because my financial situation had improved, and because I believed the house had potential to recover from the financial meltdown that had impacted both my income and value of my property, I paid a large sum of money to Fay to stop the Foreclosure. ( Note-The procedures applied by Fay during this pre-foreclosure period will also be investigated as part of this complaint as I now better understand the laws protecting consumers and I question the way in which this was completed by Fay Servicing ). 



Shortly after paying the large sum to stop the foreclosure, and under the terms of the second modification, the interest rate reset to a higher rate ( 5.75 % ) further adding to my already strained income. I began seeking refinance options as the current market rate at the time was in the 3.4 % -3.75 % range but was told by numerous banks, including the Fay Mortgage team, that we could not refinance because the loan was a previously modified loan. 



We decided to sell the property and listed it with a realtor in XX/XX/XXXX at a price of {>= $1,000,000}. At that time, we provided our realtor with a recent monthly statement from Fay Servicing showing principal balance of approximately {$890000.00} ( Note : at that time the monthly statement was reporting the correct payoff ). A potential buyer presented an offer for the house at {>= $1,000,000} and the realtor requested that we seek a formal payoff at that time. Fay provided a payoff balance {>= $1,000,000} which included an additional deferred amount of {$110000.00} plus late penalties. It was at this time we realized that Fay was incorrectly calculating the pay-off balance on our loan by erroneously adding back the original deferred balance that XXXX had previously written off as part of the second modification ( and during the time Fay acquired the loan ). Applying simple math tells the story : Original Loan {>= $1,000,000} XXXX XXXX write down ( {$400000.00} ) Principal Paid since origination ( {$110000.00} ) Payoff estimate {$830000.00} Recognizing the error and believing it to be based on incorrectly interpreting the modification documents ( we believe Fay reps were looking at the original deferral {$110000.00} from the first loan modification at XXXX and applying it to the current payoff when that amount had already been written off by XXXX ) I vigorously began to request assistance to correct the error, speaking almost monthly to Fay reps requesting assistance of a supervisor and proof of the original documentation ( or any documentation ) to settle this dispute. During this time the prospective buyer rescinded the offer because we were not able to negotiate a price given the misinformation that Fay was relying on as payoff. 



Over the last few months we have again been approached by a potential buyer. I requested payoff information and received the same incorrect result. Fay has not provided me with proof in writing of how, and why, they are calculating this amount and have told me that Fay does not have any original XXXX documentation only various scanned copies to a computer. I was told by your rep Ms. XXXX that she had called XXXX to request more information but has not been able to speak with anyone, but that she was satisfied that Fay is correct in its calculation. This is completely unacceptable, and I believe illegal, and I intend to seek all my options to resolve this matter. 



Fay Servicing has caused me harm in multiple ways by denying contact for years with supervisors, neglecting call backs and not providing requested supporting documentation for their erroneous mistakes. Unless Fay provides immediate response along with the corrected payoff information to the XXXX XXXX listed below immediately, I will instruct my counsel to begin rigorous legal action on multiple complaints. 



Sincerely, XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Attn : XXXX XXXX XXXX XXXX Co. 

XXXX XXXX XXXX XXXX XXXX XXXX Co XXXX Fax XXXX

Company response to consumer: Closed with explanation