Consumer complaint received 2017-08-14
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — 
Company: Specialized Loan Servicing Holdings LLC (CT)

Specialized Loan Servicing did not follow the appropriate rules and regulations governing approving the Deed-In-Lieu of Foreclosure requested and denied the request and forcding a foreclosure on the property. We previously had to request assistance from the CFPB to assist us with SLS and the original Loan Modification. We are requesting assistance to have SLS approve the Deed in Lieu of Foreclosure request. Referenced regulations : On XX/XX/XXXX, XXXX XXXX issued an Announcement ( XXXX ) requiring servicers to protect the priority of the mortgage lien and to clear all liens for delinquent homeowners association ( HOA ) dues and condo assessments, on properties acquired through foreclosure or deed-in-lieu of foreclosure. The Policy changes specified in this Announcement are effective XX/XX/XXXX but servicers are encourages to implement them as soon as possible. Servicers must follow the policies outlined on this announcement for all conventional mortgage loans held in, or purchased from XXXX XXXX portfolio but securitized in XXXX pools, or have special or regular servicing option, or a shared-risk XXXX pool with XXXX XXXX or Servicer marketing the acquired property, or other loans sold to XXXX XXXX under recourse or other credit enhancement arrangements. XXXX XXXX XXXX are required to advance funds when notified by an HOA for a PUD or condo project that borrower is 60 days delinquent in the payments, or charges levied by association inorder to protect the priority of XXXX XXXX  mortgage lien. Reimbursements for such advances may be provided to the servicer for up to 6 months in certain states. In addition, Servicers are currently required to ensure any priority liens for delinquent HOA dues and assessments on acquired properties are cleared immediately, but no later than 30 days after the foreclosure sale or acceptance of a deed-in-lieu of foreclosure. Servicers must take steps to protect the priority of the mortgage lien for properties located in states providing priority for assessment liens over a previously-recorded mortgage document. Servicer must determine the amount to be paid in order to clear the associations claim of lien when pursuing foreclosure. The amount is generally the lowest of : The actual delinquent assessment balance and allowed costs The maximum amount due from the foreclosing first mortgage entity based on the provisions in the projects declaration, or under the relevant state statute. The servicer must pay this amount immediately following, but no later than 30 days after, the foreclosure sale date or acceptance of a deed-in-lieu of foreclosure. Clearing the priority lien within this time frame ensures XXXX XXXX lien position is preserved and costly delays are avoided when selling the property. XXXX XXXX is revising the reimbursement policy to servicers for the advances made. If an association refuses to release its claim of lien against a property for the amount determined to be the obligated amount after reasonable efforts to reach agreement, the servicer or its foreclosure attorney must contact the XXXX XXXX legal department for further guidance. All other requirements provided in the associated sections of the Servicing Guide remain unchanged. Servicer responsibilities in regards to acquired properties are outlined on the Servicing Guide and as required by applicable state law. Non-compliance with XXXX XXXX policy regarding delinquent HOA dues and assessments may result to repurchase, make whole or indemnification. Servicers should contact their Servicing Consultant, XXXX  XXXX or XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX at XXXX ( XXXX ) with any questions regarding this Announcement. As per New York Department Financial Services XX/XX/XXXX Letter, DILs are well-accepted loss mitigation alternatives to foreclosure and have been incorporated into most servicing standards. XXXX XXXX and HUD both recognize that DILs may be beneficial for borrowers in default who do not qualify for other loss mitigation options. The federal Home Affordable Mortgage Program ( HAMP ) requires participating lenders and mortgage servicers to consider a borrower determined to be eligible for a HAMP modification or other home retention option for other foreclosure alternatives, including short sales and DILs. Likewise, as part of the Helping Families Save Their Homes Act of XXXX, Congress established a safe harbor for certain qualified loss mitigation plans, including short sales and deeds in lieu offered under the Home Affordable Foreclosure Alternatives ( HAFA ) program. Nothing in this letter affects the responsibilities of a mortgage loan servicer, including one that is an Exempt Organization, with respect to residential mortgage loan delinquencies and loss mitigation efforts under Part 419 of the Superintendents Regulations ( Business Conduct Rules for Servicing Mortgage Loans ).