Consumer complaint received 2019-04-30 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: Fay Servicing, LLC
State: CA

Complaint narrative:
Please make this a rush as I have a sale scheduled for my property on XX/XX/XXXX and Im under a loan modification review. They have not removed the foreclosure sale. I sent Fay Servicing a new request for mortgage assistance packet, they advised me they have a full one and its in review but nothing is happening. 
Hi, my name is XXXX XXXX. I have some very bad issues going on right now with my servicer FAY SERVICING , LLC Investor XXXX XXXX XXXX XXXX. and about my previous banks. I'm having a very hard time dealing and working with my servicer FAY SERVICING , LLC. I have mailed and faxed over all documents for a loan modification but they are still proceeding with the foreclosure sale scheduled for XX/XX/XXXX. If they proceed with the sale they will be in violation of the CALIFORNIA HOMEOWNERS BILL OF RIGHTS and other laws as well. 

When I opened my loan from XXXX XXXX XXXX my monthly payment was {$1300.00}. I couldnt pay them anymore due to my divorce my husband left me and left me in the waters. I applied for a Loan Modification and they told me to make some trial period payments of {$1500.00}. I paid all three times for the three months, on time. After the payments were done they transferred me to XXXX XXXX XXXX. I had the same story with them, they asked for trial period payments and so I had no other choice I paid {$1900.00} for three months, on time. XXXX  XXXX XXXX transferred me to Fay Servicing , LLC who is now my current servicer. I paid a total of around {$10000.00}. 
I understand Fay Servicing is saying they do not see my TRIAL PAYMENTS that I have made to all previous servicers and banks in their payments histories but that was their plan all along to not input all payments made towards the TRIAL PAYMENTS so that there would not be any record of my payments being made and no way to track them. I know I made payments and I have paid way too much into someone elses pocket just for my loan to be transferred to the next servicer to get the same thing happen over and over again. I make a TRIAL PAYMENT I get no receipt of that, I get told that all is ok and next thing I know im transferred to another servicer and redoing the process all over again, sending them Request for Mortgage Assistance, all my documents and forms, then getting pre-approved for a loan modification but before it can get finalized I have to make 3 TRIAL PERIOD PAYMENTS which now seems that no one has record of these payments being made and once I make the 3 payments ( someone got a good bonus from my payments before transferring me to another servicer ) and next thing I know my loan is with another servicer. This now puzzles me that Fay Servicing is saying they have no record in the payment histories of the payments being made. Where did the payments go to? Who received the payments? Did the payments actually do towards my TRIAL PERIOD PAYMENTS? Did someone at all the banks and servicers receive a good bonus? Did the banks and servicers themselves receive these payments but did not document them in the payment histories? All of these questions puzzle me and have me thinking that there is a lot of fraud going on with banks and servicers together to try to milk out as much TRIAL PAYMENTS from borrowers as possible. 
As part of this bailout, on XX/XX/XXXX, the United States Government took over XXXX XXXX   and pumped XXXX, which in XX/XX/XXXX, then Treasury Secretary XXXX XXXX said as much as {$200.00} XXXX 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. 


HAMP 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 XXXX 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. 

I now have a foreclosure sale for XX/XX/XXXX. I have sent them all documents but they still have not offered me anything. I have sent them documents again. I dont want them to ask for a trial period payment and then transfer me to another servicer and then go through the same thing the banks have been doing to me twice. I dont even know if those trial period payments I have paid when towards anything like my loan or did they just take it. I want to keep my home and pay a reasonable amount. 
I have a sale coming up on XX/XX/XXXX.

Company response to consumer: Closed with explanation