Consumer complaint received 2018-12-24
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: Fay Servicing, LLC (WA)

Please make this a RUSH I have sale scheduled for my property on Friday XX/XX/XXXX and Im under a loan modification review. 

1st Bank : XXXX XXXX XXXXXXXX they proposed me monthly 3 time trial period payment of {$1700.00}. I was very excited for this and was ready to pay my monthly mortgage to keep my home. After I made those trial payments XXXX XXXX XXXX transferred my loan to a company called XXXX. 
2nd Bank : XXXX started a foreclosure process on my home right away. I was very surprised they did that as I was under a loan modification and have already paid the trial period payments in total of {$5100.00} for the three months time to the previous bank, XXXX XXXX XXXX I then contacted them asking why they said you are past due for a long time and we will sell your home. They told me I could apply for loan modification and maybe I can be reviewed. After a couple of months sending them all requested documents I have finally approved for a loan modification. They offered me another 3 month trial period payment in the amount of {$2400.00}. I was very shocked to see that the amount went up from the previous offer I received from XXXX XXXX XXXX. I was very unhappy to the increase in the payment but I had no other option because XXXX said if I did not pay and agree to this amount they will foreclosure on my home. So I paid the 3 months trial period payments in total amount of {$7400.00}. And once again after paying I got transferred to another servicer Fay Servicing, who is doing the exactly the same thing. 
3rd Bank ; Fay Servicing is my current company now. Same story as with the other banks. I have to redo the loan modification process all over again. I have submitted all documents to them but they still have me under foreclosure which is set for XX/XX/XXXX, XX/XX/XXXX. I just do not want to be on the streets with my family. Ive paid out of pocket 2 times already to XXXX XXXX XXXX  and XXXX in total of {$12000.00}. I dont want to pay out of pocket again just to be scammed for my money that does not go towards anything. 
I have given Fay Servicing all required documentation and they have agreed that they have a complete RMA packet they have sent my RMA packet to underwriters for review but the sale is still scheduled. Fay Servicing will be in violation of the Homeowners Bill of Rights Act if they proceed with the sale. 
As part of this bailout, on XX/XX/XXXX, the United States Government took over XXXX XXXX and pumped billions, which in XX/XX/XXXX, then Treasury Secretary XXXX XXXX said as much as {$200.00} billion would be pumped into XXXX XXXX and XXXX XXXX, each, which was separate from the {$700.00} in TARP funds given out to other lenders. 

1. The guidelines issued by the United States Treasury set forth a detailed process whereby a participating servicer, either action or not acting through its subsidiary, must : a. identify loans that are subject to modification under the HAMP program, both through its own review and in response to requests for modification from individual homeowners ; b. collect financial and other personal information from the homeowners to evaluate whether the homeowner is eligible for a loan modification under HAMP ; c. institute a modified loan with a reduced payment amount as per a mandated formula, that is effective for a three-month trial period for borrowers that are eligible for a modification ; and d. provide a permanently modified loan to those homeowners who comply with the requirements during the trial period. Whether the homeowner qualifies for a modification or not, participating servicers are also required to provide written notices to every mortgage borrower that has been evaluated for a loan modification, whether or not the borrower has been found eligible.

H

AMP and its associated directives also set prohibitions against certain conduct including demanding upfront payments in order to be evaluated for a loan modification, instituting or continuing foreclosures while a borrower is being evaluated for a loan modification, assigning a single point of contact, maintaining an adequate level communication with borrowers, maintaining proper caseload to ensure HAMP objections are met, and restrictions on the way a servicer may report the borrower to credit reporting agencies. All servicers have systematically failed to comply with the terms of the HAMP directives and has regularly and repeatedly violated several of its prohibitions. Now that HAMP is over and expired due to servicers prolonging these modifications they are now proceeding with other alternatives. Under HAMP, the federal government incentivizes participating servicers to make adjustments to existing mortgage obligations in order to make the monthly payments more affordable. Servicers receive at least {$1000.00} for each HAMP modification. However, this incentive is countered by a number of financial factors that make it more profitable for a mortgage servicer avoid modification and to continue to keep a mortgage in a state of default or distress and to push loans toward foreclosure. This is especially true in cases where the mortgage is owned by a third-party investor and is merely serviced by the servicer. However, this incentive is countered by a number of financial factors that make it more profitable for a mortgage servicer such as Fay Servicing , LLC to avoid modification and to continue to keep a mortgage in a state of default or distress and to push loans toward foreclosure. This is especially true in cases where the mortgage is owned by a third-party investor and is merely serviced by Service companies because Service companies do not carry a significant risk of loss in the event of foreclosure. 

California Business and Professions Code 17200 et seq., also known as the California Unfair Competition Law ( UCL ), prohibits acts of unfair competition, including any unlawful, unfair, or deceptive business act or practice as well as unfair, deceptive, untrue or misleading advertising. Fay Servicing and all other previous servicers and their Investors conduct was unlawful in that : They illegally began and prosecuted the non-judicial foreclosure based on the lien to the 1st Deed of Trust, despite i was not in breach of payments on said lien ; They engaged in the uniform practice of requesting unnecessary documentation, seeking repetitive submissions of the same documents, and never rendering a decision, and in doing so, such activity provides the basis for an unfair inquiry and could deceive the public because it places burdensome requirements on me hat served no purpose but to provide a basis for either engaging in Dual Tracking by selling my home and by denying loss mitigation options, such as loan modifications ; They failed to properly consider loan modification applications before trying to sell my home. 

1. On information and belief, Fay Servicing , LLC does not own a significant majority of the loans on which it functions as servicer.

2. Economic Factors that discourage Fay Servicing , LLC from meeting its obligations under HAMP by facilitating loan modifications include the following : a. Fay Servicing , LLC may be required to repurchase loans from the investor in order to permanently modify the loan. This presents a substantial cost and loss of revenue that can be avoided by keeping the loan in a state of temporary modification or lingering default.

b. The monthly service fee that Fay Servicing , LLC, as the servicer, collects as to each loan it services in a pool of loans, is calculated as a fixed percentage of the unpaid principal balance of the loans in the pool. Consequently, the modifying of a loan to reduce the principal balance results in a lower monthly fee to the servicer. 


c. Fees that Fay Servicing , LLC charges borrowers that are in default constitute a significant source of revenue to it. Aside from income Fay Servicing , LLC directly receives, late fees and process management fees are often added to the principal loan amount thereby increasing the unpaid balance in a pool of loans and increasing the amount of the servicers monthly service fee.

d. Entering into a permanent modification will often delay a servicers ability to recover advances it is required to make to investors of the unpaid principal and interest payment of a non-performing loan. The servicers right to recover expenses from an investor in a loan modification, rather than a foreclosure, is often less clear and less generous.

e. Fixed overhead costs involved in successfully performing loan modifications involve up-front costs to the servicer for additional staffing, physical infrastructure, and expenses such as property valuation, credit reports and financing costs.

3. Rather than allocating adequate resources and working diligently to reduce the number of loans in danger of default by establishing permanent modifications, Fay Servicing , LLC has serially strung out, delayed, and otherwise hindered the modification processes that it contractually undertook to facilitate when it accepted billions of dollars from the United States. Fay Servicing , LLC delay and obstruction tactics have taken various forms with the common result that my loan serviced by Fay Servicing , LLC, in which im eligible for permanent loan modifications, and have met the requirements for participation in HAMP, have not received permanent loan modifications to which iam entitled.

4. By failing to comply with the California Homeowner Bill of Rights ; specifically, by engaging in the unlawful practice of Dual Tracking, Fay Servicing , LLC has left me in a state of despair and panic as I seek a loan modification from Fay Servicing , LLC, only to have my home wrongfully, oppressively and illegally sold out from under my feet.