Consumer complaint received 2019-01-11
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: Fay Servicing, LLC (CA)

This complaint is in regard to XXXX XXXX selling my home loan to Fay servicing in the scenario of being 90 days late. This complaint pertains to a mix up on payment routing, which resulted in fay servicing misconstruing my account as being past 120 days late refusing my payment and putting me into pre foreclosure. As a result, I have to cure the loan or face the foreclosure process.

A STATEMENT FROM THE XXXX  NOTICE OF SELLING THE LOAN : If your payment is inadvertently sent to use after the transfer date, there are measures in place to help you. For the first 60 days following the loan servicing transfer date : * Payments received by XXXX XXXX will be forwarded to the new servicer or returned to you requesting that you send it to the new borrower.

* A loan payment received by your old servicer on or before it's due date may not be treated by the new servicer at late, and a late fee may not be imposed on you.

Before this loan transfer to place, I was 90-120 days late with XXXX XXXX but never past 120 days late. XXXX was not in the process of accelerating the foreclosure process on me. But, there was a mix up in the payment during the servicing transfer period that was related to the excerpt above and I found myself in pre foreclosure status with the new servicer/loan owner.

.

Between XX/XX/XXXX and XX/XX/XXXX I became between 90 and 120 days late due to the fact that I am working on a return to a previous career and I spend a lot of time learning new XXXX. I spend much of my time lXXXX XXXX XXXX  and looking for a XXXX XXXX XXXX career I work as an XXXX XXXX to support myself through this skill updating and job hunting period.

From my research of foreclosure in California, I was under the impression that most mortgage companies do not accelerate the foreclosure process before 120 days late. I thought of it as if I get past 120 days, Im in big trouble. That was the focus, do what it takes to simultaneously study, look for a software engineering job and avoid falling 120 days behind on the mortgage.

From XX/XX/XXXX through XX/XX/XXXX with XXXX XXXX, I would call on day 90 of being late and schedule a payment before day 120 or for the end of the month. My XXXX XXXX   mortgage statements would mention that Im behind but, they have not started foreclosure proceedings.

I figured that in the scenario of them saying no that I would cease my other work of studying and looking for a software engineer job and ONLY work to cure the delinquency. But, fortunately each time they would accept the payment and ask if I was interested in going through the review process to see if XXXX  could help with a modification so I would not be 90 days past due. They would also recommend calls to places like HUD and the Hardest hit fund.

I tried to get a modification with XXXX  ~XXXX or XXXX of XX/XX/XXXX. I was told no, dont make enough. But, they said that since I did apply and I was in the 90 day late category that they would not accelerate the foreclosure process and they wished me luck in getting the job I wanted. My financial situation is the same as then is why I dont try. Perhaps I should have, they said there were new programs.

Though I was typically 90-120 days late with XXXX XXXX for a while, they would still accept my payment when I would call on day 90 to schedule a payment to avoid going past 120 days late. Perhaps I could have achieved the same thing for this scenario if I simply called and made the payment ~day 120 it would have been the same affect. But, I wanted to show good faith. I let them know what I was working on. It turns out that if I went the route of simply calling ~ day 120 that I would have prevented this.

So, on XX/XX/XXXX, at 90 days late, I scheduled a payment with XXXX XXXX to draft on XX/XX/XXXX.

Then the trouble started. On XX/XX/XXXX, I received a letter from XXXX  in regard to selling the loan to Fay servicing. It said the transfer date is XX/XX/XXXX, call XXXX and Fay before the XXXX and call fay on or after XX/XX/XXXX. There were instructions of what to do for the next payment. There was information stating that if a mix up happens during this period there is a 60 day protection period. The confusion initiated for me due to the fact that I had already scheduled a payment to XXXX XXXX for XX/XX/XXXX. Having a payment scheduled with XXXX XXXX for Nov 30 and Fay taking the Loan on XX/XX/XXXX is the catalyst to getting in this situation.

Here is a chronological account of what happened between XX/XX/XXXX and XX/XX/XXXX : XX/XX/XXXX : As in the previous 10 months, I called XXXX XXXX to SCHEDULE a payment though I was 90 days past due. As in the previous 10 months payment of {$2000.00} was scheduled and accepted, no acceleration initiated.

Week of XX/XX/XXXX through XX/XX/XXXX : I received a notice from XXXX XXXX  in regard to the transfer dated XX/XX/XXXX. It was 3 pages. It said things such as XX/XX/XXXX Fay will take the loan, and XXXX wont service after that. It also said that if you dont receive instructions by next payment send to and it printed the address to Fay. It said if your payment is inadvertently sent to us after the transfer date, there are measures in place to help you for 60 days. It said to contact XXXX  before the XX/XX/XXXX.

I got a XXXX   notice that had fay in the heading.

I called both, XXXX and Fay for more information. I told XXXX, that I got these documents about a sale. They said it was typical, dont worry. I dont remember if I asked about the scheduled payment or in a subsequent call. I also called Fay, the call was a bit confusing I think I was barely in the system but they mentioned that they get the loan on the XX/XX/XXXX There was some confusion in regard to when to start paying fay in the scenario of this caveat of having a payment scheduled with XXXX.

I called XXXX  back with regard to the sale date and asked about the timing of the scheduled payment and the date with fay taking over. I asked if I things would work with the way it was scheduled or if I should cancel the payment and wait until the transfer and pay fay. The person put me on hold, them came back and said that since I scheduled the payment on XX/XX/XXXX and they accepted the payment before the XXXX, that what would happen would be that they would draft it on the XXXX, THEN pass the loan to Fay with the account credited accordingly. I admit, I was very nervous about something messing up. The instructions from XXXX was wait, let the scheduled payment take place, then deal with Fay going forward.

XX/XX/XXXX through XX/XX/XXXX : I checked my bank account on Monday XX/XX/XXXXand noticed the payment was not taken which is normal due to the fact that it takes a couple business days for me to see the payment deducted. But, on Wednesday XX/XX/XXXX, I get a voicemail from the account manager from Fay. I phoned back. He introduced himself and told me about the company etc. I mentioned that I had a payment scheduled with XXXX but they did not take it. We talked a bit about processes etc. He mentioned that XXXX  did not did not take the payment due to the fact that they did not own it after XX/XX/XXXX.

When I called XXXX  this time, they agreed, they said they did not take the payment since they did not own the loan afterXX/XX/XXXX. I told them of my previous conversation with a XXXX rep and them mentioning just leave the payment scheduled allow XXXX  to take the payment, then XXXX  would forward. They mentioned that the rep may have made a mistake.

The fay person and I had some discussion about how I became late on the mortgage. I also explained how I was making payments just before becoming 120 days past due. After that, I said ok, Ill make the payment that I scheduled for XX/XX/XXXX now. The date was XX/XX/XXXX. He said no, youre at 5 months behind and we are NOT going to accept your payment!. I said what? I have never been at 5 months until this transfer and the payment confusion. He said fay would not accept. He said the new lender will NOT let you run 90-120 days late. He said that the lenders were in the business of having things straight and making money. He said I have to apply for mitigation and if I cant afford the home do something else.

I had not received much documentation from fay, I received no payment instructions from fay by XX/XX/XXXX, and I received no information package from fay at this point. Only thing I got from them was the XXXX notice. I was instructed to go to the fay website, fill out the borrow assistance form and hope that fay would find a solution.

~XX/XX/XXXX I get a letter from the account manager with the heading ; re acknowledgement of incomplete loss mitigation application The letter was dated XX/XX/XXXX This was weird, I had not received the initial info package from Fay, I had not yet received any other docs. The letter said it was in response to a recent discussion with your account manager for a request for loss mitigation. I dont recall officially asking for this. Again it was weird I took it as a way of getting me to expedite sending in the mortgage assistance application. The letter said to send the docs in by XX/XX/XXXX ** ~XX/XX/XXXX I get an introduction package from fay .

~ XX/XX/XXXX I turned in the loss mitigation application ~XX/XX/XXXX I get a letter from fay dated XX/XX/XXXX. It was an acknowledgement of complete loss mitigation application It said we got your application on the XXXX  and you will get a response within 30 days and a bunch of other stuff.

The letter mentioned that fay could not start with acceleration while under review.

~XX/XX/XXXX I got a mortgage statement from fay ~ XX/XX/XXXX I got certified letters. One was a notice of default and intent to accelerate It had an amount to pay to cure the loan or else foreclosure. The cure date is by XX/XX/XXXX.

I also got a letter saying apply for help.

I called fay, I could not get to my account manager but I spoke with someone else. I said, Im confused why the nasty letter if Im under review? He said, its true your account is under review and there is no NOD. It must have been automatically generated it may have been a mistake.

XX/XX/XXXX Of course, I get a letter stating that I did not qualify for any loss mitigation options. It said that as of XX/XX/XXXX that I owe XXXX  to bring the loan current. It said its important to pay as ASAP. It said if youre unable to pay, we may pursue foreclosure. Then there were two more pages.

It also mentioned that I have 2 weeks to appeal the decision from the date of the letter. It said that if they decline then there are no further reviews.

XX/XX/XXXX I called the account manager from fay. He said a primary reason that you were not offered a trail is due to the fact that it appeared to the underwriters that you don't have enough assets to make a good faith initial payment. He said he did not believe that it was due to the household income .vs the XXXX  mortgage payment.

Talked to XXXX with regard to the " measures in place to help with inadvertent payment.. '' clause. I was not able to get too much out of this. They said they understood, but were not able to do anything since fay earns it post transfer date which is confusing due to the fact that the statement says there are measures in place to help when a payment is misappropriated for 60 days even after the transfer.

END OF CHRONOLOGICAL ACCOUNT : The complaint is that fay did not have any interest in evaluating the payment mix up. The just went directly to the assuming I was 120 days late and would not accept the payment. My complaint is that in this scenario, on the 8th day of fay owning the mortgage that they threw me into pre-foreclosure.

Perhaps I should have discussed the grace period that XXXX mentioned in a letter in instances of mix ups first. Perhaps I should have assumed that fay was not aware that XXXX addresses possible mix ups and not getting credited accordingly. I think fay should have understood that it was a mix up and accepted my payment which would have put me at 95 days late .vs 125 days and not thrown me into pre-foreclosure.

Things I could have done to avoid this with the exception of getting behind in the first place : Comprehended the documents accordingly though I had a payment scheduled for the XXXX with XXXX XXXX. Perhaps this would have been avoided if I understood, canceled the payment schedule with XXXX  then called fay on XX/XX/XXXX and payed them. But again, when speaking with the representative, the mentioned that I had it set up would be ok.

Perhaps I should of inquired with XXXX immediately on XX/XX/XXXX with regard to the grace period as it pertains to mix ups like this with payment crediting and timing that can occur during a sales transfer.

Questions : The mortgage was sold XX/XX/XXXX, why did XXXX NOT tell me this when I called on XX/XX/XXXX to schedule a payment for XX/XX/XXXX? Why didnt they tell me dont bother scheduling this one, the loans transfer date is XX/XX/XXXX. Just wait and pay them on the XXXX and deal with the new servicer?

Why did XXXX XXXX NOT tell me to cancel the scheduled payment and pay fay on the XXXX when I called them after I learned of the sale and initial contact with fay the week of XXXX XXXX?

What happens if servicing policies are different between the old servicer and the new servicer?

When a servicer buys a California originated mortgage in another state, does the state in which the loan was originated still apply? For example the California 120 day rule.

Why was fay not aware that there is a grace period for mistakes and confusion like this?

Why was fay not willing to accept the payment in this scenario of where there can clearly be mix ups during a sensitive transfer/sale like this?

Why didnt I get specific payment and timing information from fay before the XXXX?

BOTTOM LINE OF THE COMPLAINT : If fay would have honored or been aware of the 60 day grace period with regard to misappropriated payment, I would not be in this situation today. If they honored that, they would have accepted my payment.

If XXXX  would have specifically told or advised me to skip my scheduled payment with them and pay fay on the XXXX this may have been prevented.

If there were not holes in the process, I would have never gotten 120 days behind.

If the loan was not sold I would not have gotten 120 days behind.

If fay would have understood that errors were possible in this scenario they would not have refused payment and thrown me into pre foreclosure.

The entire process was fast, confusing left little room for error which caused this for me.

I was successfully operating on the 120 day rule with XXXX XXXX. With this sale, I found myself in the pre foreclosure pool unjustifiably.

An irony is that I dont have trouble making the MONTHLY payment as of now. I would be a challenge to pay 2 or 3 payments, but its achievable. It would be a little bit of a challenge to have brought the XXXX  current but it was achievable.

I was prepared to deal with XXXX XXXX making a demand, but I was not prepared to have XXXX  sell the loan and get into pre-foreclosure due to a glitch. Or perhaps different servicing rules.