Impose the appropriate sanctions, after a thorough investigation is completed, to Fay Servicing, a mortgage servicer, for its willful misconduct that 
has been harming several homeowners

Department of Business Oversight Commissioner Jan Lynn Owen

Friends,

Many of you remember how I championed as mayor of Richmond an innovative program, seeking to reduce principals on underwater mortgages by utilizing the city’s power of eminent domain to keep homeowners in their homes. Well, today sadly we see the continuation of balloon payments and rising interest rates on mortgages, bringing about more foreclosures and often by way of illegal actions. We cannot stand silent as homeowners’ rights continue to be ignored.

My campaign for Lt Governor is stating loud and clear that the State of California needs to protect homeowners!

There is an especially egregious situation that has come to light that involves a State of California Department not doing its job. The California Department of Business Oversight (DBO) has the responsibility to protect the rights of homeowners. Instead of adhering to this obligation, it has been turning a blind eye to illegal actions on the part of loan servicers - entities they are responsible for overseeing! In particular, a servicer by the name of Fay Servicing, has recently been charged with major violations in regard to their abusive practices harming homeowners.

In response to this, the Consumer Financial Protection Bureau (a Federal agency) has invoked its authority “to take action against institutions engaged in unfair, deceptive, or abusive acts or practices, or that otherwise violate federal consumer financial laws.” They have ordered Fay Servicing to pay $1.15 million to injured borrowers, to offer them foreclosure relief, and to bring its practices into compliance with the law.   You heard that right…this deceptive and abusive loan servicer was caught red-handed and is being forced to pay $1.15 million!

So this is good news and some borrowers will be getting some relief. However, it is imperative that the California DBO start enforcing its own regulations, or more and more homeowners will be facing foreclosure through deceptive and illegal practices of loan servicers.

I am seeking your help today with reversing this pattern of non-enforcement. Below is a letter to Jan Lynn Owen, Commissioner, California Department of Business Oversight seeking that DBO start enforcing its own regulations, conduct a thorough investigation of Fay Servicing, and start protecting homeowners rather than loan servicers. And here is the press release (click here) regarding the mandate to Fay Servicing to pay a million plus dollars to injured borrowers. Please add your name to make it clear that the Department of Business Oversight needs to start living up to its responsibility and obligation as an California oversight body and stop serving the interests of the loan servicers.

People first!

Gayle McLaughlin for Lt. Governor of California
gayleforcalifornia.org

To: Department of Business Oversight Commissioner Jan Lynn Owen
From: [Your Name]

We, the following petition signers, and the American tax-payers, believe that the California Department of Business Oversight (DBO) should thoroughly investigate Fay Servicing, a mortgage servicer, for its willful misconduct that has been adversely affecting current homeowners, in addition to the numerous victims already harmed by its unlawful foreclosures.

Considering that on the Federal level, the Consumer Financial Protection Bureau (CFPB) already took action on June 7, 2017, against Fay Servicing for failing to provide mortgage borrowers with protections against foreclosure, it is a must that on the State level, the DBO do a thorough investigation on the wrongful actions of Fay Servicing, as well as impose the appropriate sanctions.

And since your State Agency, DBO, and CFPB, were provided the same factual information and evidence proving the wrongdoings of Fay Servicing, a thorough investigation needs to be done soon, given that your State Agency did not find any violations, while CFPB has determined that Fay Servicing has indeed made violations.

Please note that the CFPB’s investigation found that Fay Servicing violated federal rules, while borrowers were attempting to save their homes or find another alternative to foreclosure.

Specifically, Fay Servicing kept borrowers in the dark about critical information regarding applying for foreclosure relief, and they illegally launched or moved forward with foreclosure process against borrowers who were applying for help.

For more information, please see attached press release from CFPB titled: Consumer Financial Protection Bureau Takes Action Against Fay Servicing for Failing to Provide Mortgage Borrowers with Protections Against Foreclosure.​ Fay Servicing to Pay up to $1.15 Million to Borrowers Harmed by Illegal Servicing Practices.

Moreover, in light of the fact that a homebuyer has the right to choose the mortgage lender but once the mortgages are bundled together, the homeowner/mortgager has no right to choose his/her mortgage servicer, it is necessary for DBO to protect the California homeowners and not protect the mortgage servicers.

Therefore, we ask your State Agency, DBO, to act as a true California Regulator by enforcing your authority to halt Fay Servicing from its wrongful servicing procedures that have been leading to more foreclosures.

It is imperative to also note that more foreclosures would indeed result in more decline in values of real estate. This then would ultimately magnify the liquidity problems, leading to a continuous economic crisis in California. Hence, it is a must that the laws under the California Homeowners Bill of Rights (HBOR) be adhered to by mortgage servicers, as well as banks, to stop the tide of foreclosures in California.

Also, should your State Agency, DBO, continuously accept at face-value the misleading information provided by Fay Servicing, homeowners who are seeking to save their homes from Fay Servicing’s unlawful foreclosures would not attain the justice they deserve and Fay Servicing would continue to engage in mortgage servicing practices that are not in compliance with the law. Fay Servicing would continue to be acting above the law.

In addition, more unfavorable consequences will happen if DBO continues to turn a blind-eye to all the willful misconduct being done by Fay Servicing, since more homeowners who are attempting to save their homes would lose their homes as Fay Servicing has perfected the process of providing misleading statements in order to defend their unlawful foreclosures.

Thank you for your attention and concern to this urgent matter.