Consumer complaint received 2016-06-02
Company: SELECT PORTFOLIO SERVICING, INC.
State: TX
Product: Mortgage
Sub-product: Home equity loan or line of credit
Issue: Loan servicing, payments, escrow account

Complaint:
We are threatened with foreclosure. 

We took out a ARM home equity loan in XXXX in Texas with XXXX. Prior to that time, we had always been on time with our mortgage payments, having bought our home inXXXX at a foreclosure bank auction with 25 % down but an interest rate of 10.75 %. 

We paid at that interest rate until our first home equity loan in XXXX when Texas citizens voted to change the Texas constitution and allow home equity loans in Texas by using the Texas Home Equity Instrument. The Texas Home Equity Instrument was signed by ourselves as borrowers and the lenders, XXXX at the closing for our XXXX home equity loan. 

The Texas Home Equity Instrument required lenders had to apply payment to principle and interest first and late fees last ( on page XXXX of the Texas Home Equity Instrument ). I did not discover that lender requirement until XXXX when I notified XXXX attorney XXXX XXXX of that requirement by certified mail as required in the Texas Home Equity Instrument on page XXXX of the XXXX pages. Because XXXX did not correct the problem in how our mortgage payments were applied in 60 days, also per the Texas Home Equity Instrument on page XXXX, our mortgage loan should have been voided. That protection was never enforced in all the legal proceedings we have had since. 

In XXXX XXXX XXXX bought XXXX and refused to give us a payoff amount when we had lenders for a fixed rate mortgage ready provide a home equity loan at a lower rate. From that point on, I saw mortgage servicing irregularities such as using payments we submitted for bank fees ( such as {$3000.00} in late fees in XXXX ) and not principal and interest payments which of course made us look further and further behind in our mortgage payments and ruined our credit to take out any another home equity loan to replace the ARM loan with XXXX. 

In XXXX IRS recommended recommended we file for Ch XXXX to get some of our IRS tax debt dismissed. However, XXXX used that opportunity to claim that we were 3 months behind in our mortgage payments. The Ch XXXX judge spread out what we owed over 3 months in XXXX payments. The payments were mailed on time but had to be mailed to a XXXX XXXX in Florida so overnight delivery was not available. Even when I went to a local XXXX bank branch here in XXXX, Texas ready to pay cash for our payment due, the payment was refused. XXXX constantly reported these payments 4-7 days late and when we reported as making these catchup payments late 3 times, the Ch XXXX judge dismissed our Ch XXXX case and XXXX began to move towards foreclosing on us in XXXX. We stopped making mortgage payments at that time because foreclosure on our house appeared inevitable. XXXX at that point claimed we owed {$57000.00} in back payments owed. Our credit was too poor to find any other home equity lender. 

We filed for Ch XXXX again to protect our house in XXXX to protect our home. We were not aware that XXXX had sold our mortgage as good quality mortgage loan bundled with XXXX of other quality mortgage loans as a securitized bundled mortgage instrument. Back mortgage payments we were paying as part of our monthly Trustee payments that should have gone to XXXX as interest and principle payments were kept by XXXX, now the mortgage servicer, and applied to other fees that XXXX kept as profit. The XXXX attorney at our XXXX/XXXX/XXXX Ch XXXX hearing bragged that XXXX did not have to cooperate with state law requirements and XXXX had no idea of what was going on in our mortgage loan as well as the XXXX of other mortgage loans in the bundled mortgage security instrument XXXX had purchased. 

Ultimately, XXXX lost the paper records of our mortgage loan along with thousands of other paper records in XXXX when the records were shipped to from XXXX to XXXX and never arrived at the warehouses in XXXX.

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