Consumer complaint received 2025-08-04 00:00:00
Product: Debt collection — Mortgage debt
Issue: False statements or representation — Attempted to collect wrong amount
Company: Fay Servicing, LLC
State: FL

Complaint narrative:
Subject : Fay Servicing Misuse of Default Interest, Misrepresentation, and Bad Faith Servicing Loan Number : XXXX Borrower : XXXX XXXX XXXX Address : XXXX XXXX XXXXXXXX XXXX XXXX XXXXXXXX Servicer : Fay Servicing , LLC I am filing this complaint regarding Fay Servicings imposition of over {$7000.00} in default interest, following a payment I submitted on XX/XX/year>, which was later reversed despite sufficient funds and accurate account information. 

XXXX. Discretionary Default Interest Improperly Imposed According to my promissory Note ( Section XXXX " Interest on Default '' ), the application of the default interest rate is at the sole and absolute discretion of the Lender. It is not mandatory and is intended only to defray actual costs related to handling default. However, Fay Servicing imposed the maximum 24 % default interest rate on my entire principal balance despite the following facts : My payment of {$2100.00} was submitted on XX/XX/year>. 

The screenshot of my account page will also show that my account is verified in their system. 

The bank account used was a checking account, not a savings account. 

The account contained more than sufficient funds ( {$4200.00} ). 

I contacted Fay immediately when I saw the payment reversal and attempted to resolve the matter in good faith. 

This was not a willful default. It appears to be a system error. Yet, Fay Servicing exercised discretion against me rather than reviewing my circumstances, and imposed interest as a penalty, not a loss recovery. 

XXXX. Agent Misrepresentation and Refusal to Escalate The Fay Servicing representative I spoke with denied me the right to request a waiver or escalation of the discretionary default interest. She stated, It will not be removed because I said so, ignoring the Notes language that assigns such discretion only to the Lender. She refused to escalate my concerns and instead attempted to force me to pay or accept the charges. 

She also misrepresented the default interest rate as 25 %, despite the Note clearly stating the maximum is 24 %. This is a material misstatement of contract terms and reflects either a lack of training or intentional misrepresentation. 

XXXX. Inflated and Unjustified Charges The agent stated I was being charged over {$7000.00} in default interest for XXXX month. My approximate loan balance is {$200000.00}. At 24 % APR, the monthly default interest should be : {$4000.00} There is no explanation for the excess $ XXXX being charged XXXX is being over-applied or miscalculated Fees are being miscategorized as default interest, or Charges are being retroactively applied without disclosure. 

XXXX. Suspected Data Manipulation I am concerned that Fay Servicing may alter account data to protect themselves from liability. The representative claimed I used a savings account, but I used a checking account, and the account was properly funded. If they modify system records after the fact, that constitutes bad faith and a cover-up of their servicing error. 

XXXX. Repeat Pattern of Misconduct This is not my first CFPB complaint against Fay Servicing. I urge the Bureau to review my prior submissions. In previous cases, Fay Servicing has repeatedly demonstrated a pattern of refusing to acknowledge clear errors, mishandling disputes, and shifting blame onto the borrower, even when documentation proves otherwise. This appears to be a systemic issue with how they operate and handle borrower concerns. 

XXXX. Requested Relief I respectfully request that the CFPB require Fay Servicing to : Provide a complete itemized accounting of the $ XXXX interest charge, including the time period, interest rate, and any additional fees included. 

Confirm internal system logs showing whether the account submitted was checking or savings, and whether those records have been altered. 

Produce written authorization from the Lender, not an agent, for the imposition of discretionary default interest. 

Reverse the default interest charges and restore my account to good standing, with no negative credit reporting stemming from this issue. 

Restore my ability to resubmit the payment through my preferred method using my verified checking account, so this matter can be resolved and we can move on. 

Throughout this experience, I was not only financially mistreated, but also personally disrespected and demeaned by Fay Servicings representative. Rather than treating my concerns with professionalism and care, the agent spoke to me in a condescending, dismissive tone, as if I were unintelligent or incapable of understanding my own loan terms. It was clear from her attitude that she was attempting to make a mockery of me rather than assist with a legitimate servicing issue. 

Every time I called in, I was routed back to the same representative, despite asking to speak with someone else. It felt as though my account was flagged or notated in such a way that screened my calls, preventing me from receiving a fair and unbiased resolution. The agent refused to transfer me to a supervisor or another departmenteven after I requested it multiple times. 

When I attempted to explain that I submitted my payment properly and that I believed there was a system error, she repeatedly interrupted, overtalked, and accused me of being combative, simply for asking questions and advocating for myself. She never once acknowledged my concerns or attempted to resolve the situation with objectivity. Instead, she antagonized me, blamed me for a reversal that I had no control over, and insisted that nothing would be removed because she said so. 

I strongly urge the CFPB to review all recorded phone calls between myself and Fay Servicing representatives. These recordings will clearly show how I was mistreated, talked down to, and denied access to fair servicing support. My attempts to clarify the issue were met with hostility, blame-shifting, and a complete lack of empathy or accountability. 

This level of customer service is unacceptable, especially from a mortgage servicer handling loans for hardworking Americans. It reflects a pattern of bad faith, gatekeeping, and disrespect, and further supports my claim that the default interest and penalties imposed in this case were not only discretionary but also rooted in a clear abuse of power. 

I am a retired XXXX XXXX XXXX on a fixed income. I acted in good faith, followed all steps required to make my mortgage payment, and should not be penalized for what was clearly a servicing or processing error. Fay Servicings conduct is punitive, deceptive, and abusive.

Company response to consumer: Closed with explanation