Product: Mortgage

We, XXXX XXXX and XXXX XXXX XXXX, are writing to formally appeal the denial of our application for home retention loss mitigation options as outlined in your letter dated XX/XX/XXXX. We believe that SPSs determination was incorrect due to procedural errors, misapplication of eligibility criteria, and failure to fully consider applicable legal protections under federal and New York State law. We request a reconsideration of our application for the SPS Trial Modification, SPS Unemployment Program, Deferral Plan, and Repayment Plan. Below, we outline the basis for our appeal, supported by evidence and legal arguments. 
Background and Request for Reconsideration Our property at XXXX XXXX XXXX XXXX, XXXX, NY XXXX, is our family residence, and we are committed to retaining it. Your letter indicates that our mortgage obligation is either discharged or subject to an automatic stay under the United States Bankruptcy Code, yet the lien remains enforceable. We acknowledge the accounts delinquency and bankruptcy status but assert that SPSs review failed to adequately account for our circumstances, applicable investor guidelines, and regulatory requirements.

Legal Basis for Appeal 1. Violation of Federal Servicing Regulations ( Regulation X, 12 CFR 1024.41 ) Under the Real Estate Settlement Procedures Act ( RESPA ), implemented through Regulation X, mortgage servicers must exercise reasonable diligence in obtaining documents and information to complete a loss mitigation application and evaluate all available options ( 12 CFR 1024.41 ( b ) ( 1 ) ). Your denial letter lists specific reasons for non-approval but provides insufficient detail on how these conclusions were reached. For example : o SPS Trial Modification ( Insufficient Payment Reduction ) : The letter states that a modification could not reduce our principal and interest payment sufficiently. However, no Net Present Value ( NPV ) calculation specificsbeyond a property value of $ XXXXare provided to justify this finding. Regulation X requires servicers to provide borrowers with a description of the inputs used in the NPV calculation ( 12 CFR 1024.41 ( d ) ( 2 ) ( ii ) ). The incomplete NPV data in your letter suggests a lack of transparency and potentially an error in underwriting. We request the full NPV inputs and methodology to verify compliance with investor guidelines ( e.g., XXXX XXXX XXXX XXXX, or other applicable standards ). 
o SPS Unemployment Program and Deferral Plan ( Account Delinquency ) : The blanket denial based on account delinquency fails to consider whether partial payment deferrals or forbearance could cure the delinquency, as permitted under federal guidelines.

2. Misapplication of Bankruptcy Protections Your letter acknowledges an active bankruptcy filing or discharge but denies the Repayment Plan explicitly due to Active Bankruptcy. This denial appears inconsistent with federal law. The automatic stay under 11 U.S.C. 362 does not preclude voluntary loss mitigation agreements, provided Bankruptcy Court approval is obtained. SPSs own letter conditions approval of a trial modification on such approval, yet no effort was made to explore this option or provide us with guidance on seeking it. This omission violates SPSs duty to evaluate all loss mitigation options under 12 CFR 1024.41 ( c ) ( 1 ). We request reconsideration of the Repayment Plan and assistance in obtaining Bankruptcy Court approval if needed.

3. New York State Foreclosure Prevention Requirements New York Real Property Actions and Proceedings Law ( RPAPL ) 1304 requires mortgage servicers to negotiate in good faith during loss mitigation reviews. The cursory denial of all home retention optionswithout exploring alternatives such as principal deferral, interest rate reduction, or extended forbearancesuggests a lack of good faith effort. Additionally, XXXX XXXX XXXX XXXX XXXX ( XXXX ) and regulations under the XXXX XXXX  XXXX XXXX ( DFS ) emphasize affordable retention options. SPSs failure to propose a viable retention plan, despite our expressed intent to retain the home, contravenes these state mandates. 
4. Potential Investor Guideline Errors SPS states that its review adhered to investor eligibility rules, yet no specific investor ( e.g., XXXX XXXX, XXXX XXXX, private investor ) or guideline is identified. For example, under XXXX XXXX XXXX XXXX program, delinquent borrowers may qualify for payment reductions even in bankruptcy, provided certain criteria are met. SPSs blanket denial based on delinquency and bankruptcy status may reflect an overly restrictive interpretation of these rules. We request clarification on the investor and a detailed explanation of how their guidelines were applied.

5. 3. Evidence of Bad Faith in XXXX Modification Process Attached documents demonstrate SPSs bad faith during a prior modification attempt in XXXX, which supports our contention that the current denial is similarly flawed : o On XX/XX/XXXX, SPS approved us for a trial period plan under the Home Affordable Modification Program XXXX XXXX XXXX XXXXth payments of {$2100.00} ( Attachment A ). We made all three required trial payments plus three additional payments through XX/XX/XXXX, totaling six payments of {$2100.00}. Before we were approved for a permanent modification in XX/XX/XXXX ( Attachment B ), SPS sent us a letter claiming that they were doing a quality control on our loan. In a coincidence with this quality control check, the XXXX era of the HAMP modifications were due to expire in XX/XX/XXXX. 
o XXXX XX/XX/XXXX, we submitted paperwork to finalize the permanent modification. However, SPS unilaterally rescinded the offer in XX/XX/XXXX, claiming it had expired, despite our compliance with all terms and an additional payment in XX/XX/XXXX ( Attachment C ). 
o On XX/XX/XXXX, SPS offered a new trial modification, after the court was notified of their bait-and-switch tactic ( Attachment D ) with payments of $ XXXXan increase of {$2600.00} over the previously approved amountwithout justification tied to any change in our financial circumstances ( Attachment E ). Our appeal letter dated XX/XX/XXXX, provided XXXX tax returns and XXXX profit/loss statements showing no material change in income, yet SPS did not revert to the original terms ( Attachment F ). 


Supporting Evidence and Arguments Hardship and Intent to Retain Home : We have faced financial hardship with COVID 19, unemployment, and medical issues, which contributed to the delinquency. However, we are willing and able to resume payments under a modified plan. SPSs assertion that income was neither required nor considered does not absolve it of the duty to assess our current capacity to sustain a modified payment, as required under federal and state law. 
Property Value Discrepancy : The NPV results list our property value at {$970000.00}, but we question whether this reflects a current, accurate appraisal. XXXX real estate values have fluctuated, and an inflated valuation may have skewed the payment reduction analysis. We request an opportunity to submit an independent one. 
Bankruptcy Status Clarification : We are prepared to work with SPS and the Bankruptcy Court to secure approval for a modification or repayment plan, contrary to SPSs assumption that bankruptcy precludes all options.