Consumer complaint received 2023-01-31
Product: Debt collection — Mortgage debt
Issue: False statements or representation — Attempted to collect wrong amount
Company: Fay Servicing, LLC (FL)

RESPONDENTS  FAILURE TO COMPLY WITH 12 C.F.R. 1006.18 ( b ) ( 2 ) 12 C.F.R. 1006.18 ( b ) ( 2 ) False, Deceptive, or Misleading Representations provides that : * ( b ) ( 2 ) A debt collector must not falsely represent : ( i ) The character, amount, or legal status of any debt; and ( ii ) Any services rendered, or compensation that may be lawfully received, by any debt collector for the collection of a debt.

On XXXX XXXX XXXX a final judgment of foreclosure was entered in favor of RESPONDENT, Fay Servicing , LLC ( XXXX  or FAY ) in the total amount of {$370000.00}. Paragraph XXXX ( XXXX ) of the XX/XX/XXXX final judgment provides in relevant part as follows : XXXX. On filing the Certificate of Title, the Clerk shall distribute the proceeds of the sale to XXXX XXXX XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX so far as they are sufficient, by paying : ( a ) All of Plaintiffs cost ; ( b ) Plaintiffs attorneys fees ; and ( c ) The total sum due to Plaintiff as set forth above, less the items paid, with interest at the current statutory interest rate from the date through which interest is calculated in paragraph 1 above to the date of the sale. If, subsequent to the date of the Plaintiffs Affidavit of Indebtedness and prior to the sale contemplated in paragraph 5 hereof, the Plaintiff has to advance money to protect its mortgage lien, including but not limited to post judgment advances for property taxes and insurance, property preservation costs, posts judgment attorneys fees and costs and post judgment bankruptcy attorney fees and costs, the Plaintiff or its Attorneys shall certify by affidavit to the Clerk and the amount due to Plaintiff shall be increased by the amount of such advances without further order of the Court. 
Therefore, according to paragraph eight ( 8 ) of the final judgment, XXXX   and/or its principles ability to advance post-judgment fees and cost, are not triggered until if, and when a Certificate of Title is filed in the underlying foreclosure case. In fact, paragraph 8 ( c ) of the final judgment specifically states that : if prior to the sale..the Plaintiff has to advance money such as post judgment advances for property taxes and insurance to protect its mortgage the Plaintiff or its Attorneys shall certify by affidavit to the Clerk and the amount and the amount due to Plaintiff shall be increased by the amount of such advances ( Emphasis added ). However, as of the date of this Complaint, NO sale has occurred and NO Certificate of Title has been filed by the Clerk. Additionally, RESPONDENT  ( through its agent attorney ), has not certified the amount due by affidavit to the Clerk. Therefore, on XX/XX/XXXX, RESPONDENTs  demands for said advance money, was clearly premature. A copy of the XX/XX/XXXX final judgment, is attach hereto as Exhibit A. 

However, on XX/XX/XXXX, XXXX  sent us a letter showing the total amount we ( or someone on our behalf ) needed to pay, in order to pay off the balance of the subject mortgage loan. XXXX  XX/XX/XXXX collection letter is misleadingly false, as it appears to be based totally on a Total Unpaid Principal Balance amount of {$190000.00} and not on the XX/XX/XXXX final judgment amount of {$370000.00} - that fact alone, renders the XX/XX/XXXX payoff demand inaccurately misleading and false. A copy of RESPONDENTs  XX/XX/XXXX payoff demand is attached hereto as Exhibit B. 

Nevertheless, it is clear on the face of its XX/XX/XXXX collection letter, that RESPONDENT  is demanding additional expenses other than the {$51000.00} interest charges thats authorized by the XX/XX/XXXX final judgment. Certainly, such a demand on the part of RESPONDENT is falsely representing the true character and amount of the alleged debt, and therefore, does not comply with 12 C.F.R. 1006.18 ( b ) ( 2 ). 

As of the date of this Complaint, NO foreclosure sale of the subject property located at XXXX XXXX XXXX XXXX XXXX XXXX XXXX has occurred. Therefore, RESPONDENTs XX/XX/XXXX letter is clearly an unfair attempt to collect additional expenses that ( according to the final judgment ), it is not yet entitled to collect. Thus, RESPONDENTs XX/XX/XXXX demand/collection letter is in violation of this Bureaus Rules under 12 C.F.R. 1006.18 ( b ) ( 2 ). 

Based on paragraph XXXX ( XXXX ) of the XX/XX/XXXX final judgment, RESPONDENT, through the letter, is falsely representing the true character of the {$390000.00} total payoff amount, because said payoff amount prematurely includes post judgment expenses other than post judgment interest. As a result, our ability to determine the validity of the total amount allegedly owed, has been impaired by the RESPONDENT. The XX/XX/XXXX letter is indeed false and misleading under 12 C.F.R. 1006.18 ( b ) ( 2 ), and is an unfair attempt to collect unauthorized fees and expenses.

To begin correcting the above stated error, we are hereby requesting that FAY provide us with a detailed explanation of why it included post judgment fees and cost prior to filing a motion to amend the final judgment, and prior to the sale of the subject property. Additionally, we are requesting that FAY correct the above violations by providing us with an undated payoff statement that does NOT include post judgment fees and cost other than post judgment interest as authorized by the XX/XX/XXXX final judgment. 

CONCLUSION The above violations on the part of RESPONDENT, are preventing, hindering, and/or delaying us, or someone on our behalf, from confidently making a final payment that would pay off the correct balance of the subject mortgage loan. Moreover, FAYs misleading and unfair pre-mature demands for post judgment fees and cost, is preventing us from selling the subject property, and extinguishing the alleged debt and to do, before the property is lost in a foreclosure sale.