Consumer complaint received 2024-07-10 00:00:00
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — Applying for or obtaining a modification, forbearance plan, short sale, or deed-in-lieu
Company: Fay Servicing, LLC
State: NJ

Complaint narrative:
The Single Point of Contact, XXXX XXXX and his immediate leadership are denying me loss mitigation without submitting my documents to an underwriter. My authorized third party, XXXX XXXX, spoke with XXXX XXXX on XX/XX/XXXX, and he advised her the reason my loss mitigation application was being denied was because {$0.00} was being used for income, because my income documents were insufficient. 

XXXX XXXX gathered all my income documents, award letters, benefit statements and bank statements, and submitted my loss mitigation package to XXXX on XX/XX/XXXX. 

On XX/XX/XXXX, Fay Servicing mailed me a denial letter. 

On XX/XX/XXXX, XXXX XXXX contacted XXXX XXXX who informed her my application was denied. She was concerned that the application was denied one day after Fay Servicing acknowledged receiving the documents via XXXX. She wanted to know how it was possible to receive a denial when I never got an acknowledgement letter. She wanted to know what was still insufficient about the income since all income documents were submitted. 

XXXX XXXX had not even seen the updated documents, which means an underwriter did not deny the application on XX/XX/XXXX. XXXX XXXX and his immediate leadership are seeing my name and immediately generating a denial letter, thus intentionally blocking my access to loss mitigation. 

XXXX XXXX mentioned multiple times that I failed a previous trial modification and maybe that is why I was denied, yet the underwriter is not documenting this on the denial letter, they are merely stating income. XXXX XXXX alluded to me not deserving access to loss mitigation because I failed the trial and stated I was just trying to push things through to stop foreclosure. He stated that I spend too much, and that the DTI is off, without an underwriter calculating DTI with my credit report. As explained in my hardship letter, it took months from my XXXX to actually begin receiving benefits, and once they were received, I had to catch up on what I could. I'm asking for help catching up on my home loan. 

XXXX XXXX advised XXXX XXXX, that an acknowledgement letter should be generated and mailed, and the new package should be submitted to the underwriter, so they can use investor guidelines to determine if I qualify for loss mitigation. XXXX XXXX told her she did not know what she is talking about and that she is just saying stuff. He became combative and seemed to have a personal stake in me trying to come out of foreclosure and keep my home. Rather than give me benefit of doubt because I do not know how this works, and help me, he is effectively denying me loss mitigation. 

XXXX XXXX said that I failed the trial when I made a payment at the end of the month that was dishonored and if I hadn't waited until the end of the month, he could have called and reset the payment for me. He is trying to punish me for failing a trial modification, so once he sees my name, he just prints a denial letter himself. 

The email confirmation from XXXX are enclosed as well as the denial letter, which was generated one day later. 

Lastly, when XXXX XXXX was asked why the loan is not being serviced as an FHA loan, even though Fay Servicing acknowledged it closed as an FHA loan, he stated that the loan converts to a conventional loan after mortgage insurance premiums are no longer paid. I was advised by a HUD counselor ; this is in fact untrue. The loan was originated in XXXX, before the current MIP rules were established. In XXXX, once your loan reached 78 % LTV and you had been paying for at least 5 years, MIP would be removed, however that does convert the loan to conventional. In addition, the loan was modified, which can change the type from ARM to fixed, it can change the rate, it can extend the term, but it can not change the original note from FHA to conventional, so the loan should be serviced as such. 

I believe there is a gross lack of knowledge by the person handling my loss mitigation application, with respect to loss mitigation rules and mortgage servicing. There is a lack of oversight in that he can just generate and mail a denial letter without submitting my application to an underwriter. I believe this is happening to many people because equity has increased in properties, and it now benefits the servicer to foreclose. If I owed more than my home is worth, XXXX XXXX would surely follow the rules once a negative NPV was generated.

Company response to consumer: Closed with explanation