Consumer complaint received 2024-02-01
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — Trying to communicate with the company to fix an issue related to modification, forbearance, short sale, deed-in-lieu, bankruptcy, or foreclosure
Company: SN SERVICING CORPORATION (NY)

I am writing to bring to your attention a matter of grave concern regarding a potential violation of Regulation X by SNSC SERVICING CORP. I represent the homeowners XXXX and XXXX XXXX in the aforementioned case as the short sale negotiator. It has come to our attention that a foreclosure auction has been scheduled for XXXX XXXX despite the fact that a short sale review was currently in process and acknowledged by SNSC SERVICING CORP. In my communication with the servicer back on XX/XX/year> I was advised that the short sale file would be reviewed and I was given a list of documents to be submitted for the review. After we received an offer on the property I submitted the contracts and HUD on XXXX XXXX. I was asked for an explanation of certain figures on the HUD by the SNSC representative ( XXXX XXXX ). I advised her that we were only waiting for the full title report to come back so we can have the exact tax figures to put on the HUD. All the while that these negotiations and communications were ongoing SNSC was planning the foreclosure auction and continued the court case and failed to inform their Bank Attorney ( XXXX XXXX XXXX ) that they are in negotiations and to place a hold on the case. Instead they took it upon themselves to clearly violate Section 1024.41 of Regulation X. As you can see from the emails communications attached, the fact they were in negotiations on the short sale request is not in doubt. What is baffling is the fact that they were being lied to and led to believe that there were actual negotiations when in all essence SNSC had planned all along to auction the home and not act in good faith. 
1. XX/XX/year> my 3rd party authorization emailed to SNSC with Acknowledgement of receipt by XXXX XXXX XXXX XXXX. XXXX XXXX XXXX advised what was needed for short sale review 3. XX/XX/year> Short Sale documents submitted ( contracts, HUD, MLS ( Listing agreement ) 4. XX/XX/XXXX SNSC indicated that the short sale offer was going to be submitted 5. XX/XX/XXXX short sale rejected by investor as per XXXX XXXX 6. XX/XX/XXXX Advised by XXXX XXXX that I could appeal to her supervisor XXXX XXXX 7. XX/XX/XXXX Appeal email sent to XXXX XXXX who acknowledge receipt and that she would reach out to the investor for a 2nd review. 
8. XX/XX/XXXX XXXX XXXX advised that investor is staying with the denial. 
9. XX/XX/XXXX NOTICE OF SALE is uploaded by court to the STATE UNIFIED COURT 10.XXXX XXXX homeowners call me to tell me that they received in the mail a NOTICE OF SALE and were actually in shock All events above documented via emails attached to this complaint. From XXXX XXXX to XXXX XXXX we were actively engaged in a short sale review at the same time SNSC and their attorneys were still filing motions and judgments of foreclosure and sale submitted on XX/XX/year>. 

As you can see from the above chain of documented events SNSC was in clear violation of Regulation X dual Track Foreclosure laws in that they were secretly scheduling the auction of this properly all the while giving us false and misleading information as if they were in fact negotiating with us in good faith. I would ask the court to impose severe sanctions against this servicer as a means to deter them from this illegal act to other homeowners. To not impose heavy sanctions upon SNSC would give them free rein to continue with this illegal act and to steal homeowners homes with no recourse. I would also ask for your honor to also order them to conduct a meaningful short sale review and to actually submit documents to the investor. 

The offer that was submitted to the SNSC was rejected and the SNSC agent indicated that they wanted an amount that was in excess of fair market value. The agent from SNSC indicated that they do not go by appraised value. The submitted offer was only $ XXXX under the attached independent appraisal report. After the rejection on XX/XX/year> we offered to come up in price the extra $ XXXX to give them full market value to match the independent appraisal report. Again XXXX XXXX advised that the offer would still be rejected without ever going back to the investor with that new higher offer amount. 
We have been processing this short sale in excess of the 30 or 35 days prior to the sale as required under dual track foreclosure laws. 

Regulation X, implemented by the Consumer Financial Protection Bureau ( CFPB ) pursuant to the Real Estate Settlement Procedure Act ( RESPA ), governs the handling of mortgage servicing, including loss mitigation and foreclosure proceedings. It establishes certain rights and responsibilities for both borrowers and servicers, with the objective of promoting fair and transparent practices in the mortgage industry. RESPA supersedes state law via the Supremacy Clause of the United States. 

Section 1024.41 of Regulation X specifically addresses the procedures and requirements for evaluating and responding to borrowers loss mitigation applications. It stipulates that once a complete application is received, the servicer must acknowledge the receipt in writing within five business days. Furthermore, the servicer is required to exercise reasonable diligence in obtaining all necessary documents and evaluating the application for a loss mitigation option. During this review process, foreclosure proceedings, including the scheduling of an auction date must be stayed. 

These actions by SNSC SERVICING is the textbook scenario why Dual Track Foreclosure laws were enacted. To stop banks from selling a homeowners home while at the same time reviewing them for work out options. 

The failure to cancel the auction and to complete the short sale review directly contradicts the spirit and intent of Regulation X, which aims to provide homeowners with a fair opportunity to explore loss mitigation options before facing the dire consequences of a foreclosure auction. 


I write this letter in a good faith attempt to have the foreclosure auction date removed and for the short sale to be reviewed again in a fair and amicable manner