Consumer complaint received 2022-10-15
Company: SELECT PORTFOLIO SERVICING, INC.
State: MD
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Struggling to pay mortgage

Complaint:
Account XXXX : XXXX Select Portfolio Servicing ( SPS ) continues to engage in fraudulent, illegal and predatory practices. Since XXXX, SPS has denied my repeated Requests for Mortgage Assistance and have ignored numerous requests to respond to Notices of Errors and Qualified Written Statements in their gross errors and omissions in servicing my account in violation of the Real Estate Settlement Procedures Act ( RESPA ) and has fraudulently initiated a foreclosure on my home which it has manufactured by refusing to receive mortgage payments, and is further refusing to offer any affordable loss mitigation options. 

Most recently, I submitted an Request for Mortgage Assistance Application. In response to that application, SPS issued to me a letter dated XX/XX/XXXX denying my modification without explanation, and offering me a Repayment Plan in its gross miscalculation in error of more than {$140000.00}. 

Specifically, the Consumer Financial Protection Bureau enacted a rule requiring early intervention and communication with delinquent borrowers. Servicers must establish or make good faith efforts to establish live contact with borrowers by the 36th day of their delinquency and promptly inform such borrowers, where appropriate, that loss mitigation options may be available. The new rules clearly implemented procedural protections for borrowers with regard to the process of obtaining an evaluation for loss mitigation options and restrictions on the foreclosure process while borrowers are being evaluated for a loss mitigation option. See 12 C.F.R. 1024.41. 

THE DENIAL OF MY APPLICATION WAS IMPROPER AS SPS FAILED TO COMPLY WITH 12 C.F.R. 1024.41 ( d ). Pursuant to 12 C.F.R 1024.41 ( d ) if the servicer denies the homeowner a loan modification, the servicer must state the specific reason each modification option was denied. Supplement XXXX to 12 C.F.R. Part 1024, Official Bureau Interpretations, provides the degree of specificity required of the servicer in denying a borrower for a loan modification. 

SPS failed to name the purported investor of my loan as required by 12 C.F.R. 1024.41 ( g ) ( 1 ). A denial for a loan modification ostensibly based on an investor restriction that does not name the investor or explain the restriction has been held to be insufficient. XXXX v. XXXX Bank, XXXX. XXXX. No XXXX, XXXX XXXX XXXX, at XXXX ( XXXX Md. XX/XX/XXXX ). SPS claims that I was denied for a Trial Modification because we are unable to offer you this program because in performing our underwriting of a potential modification we could not reduce your principal and interest payment, OR the payment reduction achieved did not meet the payment reduction that is required for your account. The first issue with this reason for a denial is that it is two reason an either/or reason. Secondly, SPS failed to provide the specific investor requirements as to the required payment reduction, or what prohibitions are as to interest rate reduction, term extension and availability for a principal reduction. The NPV inputs provided by SPS only include the value of the property, not the income, capitalized amount, interest rate or term utilized in calculating eligibility for a loan modification. SPS, you must provide the name of the purported investor of my loan as well as the specific investor restriction that prohibits my loan from being modified. 

The repayment plan offered by SPS is unattainable as it requires a balloon payment in the amount of {$140000.00} that is due at the end of the 12 payments. SPS is violating the ability to repay requirement as set out in RESPA. 

Using the criteria from RESPA, Regulation X, and the CFPB, SPS had to do three things to properly deny my loan application. First, it had to identify the owner or assignee of the loan, which it did not do. Second, it had to identify the specific requirement that I did not meet which SPS also failed to do. Third, it had to provide information and detail supporting its claim that Investor did not participate. SPS had to provide any underwriting guidelines or requirements or restrictions as well as the specifics utilized in calculating eligibility such as interest rate, term and XXXX. XXXX XXXX XXXX Bank, XXXX, XXXX XXXX, XXXX XXXX XXXX, at XXXX ( XXXX Md. XXXX. XXXX, XXXX ) ( denying defendants motion to dismiss RESPA Claim because the specific applicable requirement that was not met, the Court concludes that XXXX has adequately alleged that the Denial Letter 's explanation for denying his HAMP loan modification may lack the specificity required by 12 C.F.R. 1024.41 ( d ). ) With each loss mitigation application I submitted, SPS continues to engage in the practice of dual tracking while the loss mitigation process was under way. SPS is precluded from initiating foreclosure proceedings while a loss mitigation application is being processed. Id. at 1024.41 ( f ), ( g ) which SPS has done. 

SPS continues to charge third party and prohibited fees in violation of RESPA prohibits, specifically, 12 C.F.R. 1024.35 ( b ) ( 5 ). A servicer can not charge a borrower a prohibited fee as that is not a bona fide fee. 

Demands for SPS to provide an itemization of the fees it have charged remain ignored. 
CFPB regulations effective XX/XX/XXXX, as well as RESPA itself, require servicers, through amendments made by the Dodd-Frank Act, to take timely action to correct errors relating to avoiding foreclosure.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation