Consumer complaint received 2018-03-05
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: SELECT PORTFOLIO SERVICING, INC. (CA)

I have been working with The XXXX XXXX XXXX XXXX XXXX XXXX in its capacity as a Housing and Urban Development ( HUD ) approved housing counseling agency to assist us to resolve a servicing error that was committed by Select Portfolio Servicing ( SPS ). SPS 's failure to timely respond to a demand statement request from Keep Your Home California ( KYHC ), caused us to be denied the {$10000.00} under the KYHC Principal Reduction Program. We were relying on this KYHC benefit in order to reinstate the loan. 

In order to prevent foreclosure, we applied for and were approved for the KYHC Principal Reduction Program. This approval was completed on or about XX/XX/XXXX. On or about XXXX XXXX XXXX, KYHC submitted a notice of approval to SPS. The KYHC request was submitted to the SPS Escalated Customer Service Department to request a demand statement, which would confirm the total amount to reinstate the loan. This request was submitted directly to XXXX XXXX, who has confirmed that he was responsible for processing this request. 

As you know, the Real Estate Settlement Procedures Act, states that " servicers must provide an accurate payoff balance to a consumer no later than 7 business days after receipt of a written request from the consumer for that information. However, after XXXX XXXX SPS failed to respond to multiple KYHC request dated XXXX XXXX and XX/XX/XXXX. This delay in over 30 days to provide a reinstatement quote was a clear violation of RESPA guidelines. In addition, I was refused in a form of a letter by SPS, to provide me with a written reinstatement amount. 

On or about XX/XX/XXXX, SPS finally issued a reinstatement quote, which was good through XX/XX/XXXX. The total figure provided to reinstate the loan was {$100000.00}. This amount exceeded the KYHC guidelines by {$4700.00}. 

In an attempt to resolve this issue, we contacted SPS Home Retention Department. I spoke with XXXX XXXX, who was the assigned SPOC. XXXX XXXX stated that we could remit {$4700.00}, as a onetime irregular lump sum payment. Once applied to the loan, the amount due to reinstate the loan would be lowered to meet the KYHC XXXX program guidelines. This then would allow us to continue with the KYHC program. XXXX XXXX agreed to accept the funds and apply the funds to our loan. During this taped telephone conversation, XXXX XXXX obtained permission from his supervisor to complete the transaction. I agreed to remit the funds the next day. 

Please note here that XXXX XXXX wand the department he works in were assigned by SPS to serve as our Single Point of Contact in accordance with RESPA, ( " the single point of contact shall remain assigned to the borrower 's account until the mortgage servicer determines that all loss mitigation options offered by, or through, the mortgage servicer have been exhausted or the borrower 's account becomes current. '' California Civil Code 2923. ( 7 ). However, each member of the team must be " knowledgeable about the borrower 's situation and current sttus in the alternatives to the foreclosure process ''. California Civil Code 2923. ( 7 ). This guideline was in part created to avoid possible miscommunication between the borrower and the lender. 

On XXXX XXXX, I wired SPS funds in the amount of {$4700.00}. ( Attached ). On the same day I spoke with SPS and confirmed where the funds could be wired and subsequently were received. In addition, that XXXX XXXX had noted the agreement in the loan servicing notes on our loan. 

From XX/XX/XXXX, through XXXX XXXX, I spoke with multiple representatives at SPS in an attempt to have SPS issue an updated reinstatement quote in order to submit this updated amount to the KYHC program, before the KYHC application would be closed. Regrettably, although the funds were confirmed received, held and applied to the loan, SPS refused to issue an updated reinstatement quote as was previously agreed. 

On XX/XX/XXXX, I spoke with a XXXX XXXX, a representative of SPS Escalated Customer Service Department. XXXX XXXX confirmed that she did in fact see the the agreement was noted to our loan, and that the funds were received and applied to the loan. I again requested that an updated reinstatement quote be issued to KYHC to allow me to qualify for the program and save my home. Although XXXX XXXX agreed with me that I fulfilled my obligation under that agreement, Ms.Pierro failed to issue an updated reinstatement quote. 

Please note that under the XXXX XXXX XXXX XXXX ( CFPB ) Mortgage Servicer Guide,  because the {$4700.00} payment was agreed to under a loss mitigation option, and the borrower submitted payment sufficient to cover principal, interest and escrow for a given billing cycle, under the modified loan contract, the servicer should have treated the payment as a periodic payment and not as a partial payment. As such, our payment should have been applied to my account within 5 days of receipt. Yet, by XXXX XXXX, the funds had been held for ten ( 10 ) days and therefore were beyond the five day threshold. At this point, SPS was obligated by RESPA to apply these funds, and reissue the reinstatement quote with the lower amount. The failure of SPS to follow this guideline is another violation of the RESPA guidline. Again, even if the funds were applied to suspense any updated reinstatement figure should have included the remitted payment held in suspense. 

Again, please note that we had been approved by KYHC and once the clients assigned SPOC agreed to accept the payment, this obligated the servicer to KYHC loss mitigation process. 

FInally, on XX/XX/XXXX, my HUD Foreclosure Counselor and I spoke with SPS 's XXXX XXXX, the supervisor of the Escalated Customer Service Department. During this conversation, XXXX XXXX explained the situation to XXXX XXXX. He advised him of the agreement that was reached and executed. He also confirmed with XXXX XXXX that SPS SPOC supervisor approved the payment to lower the total amount due to bring the loan current. XXXX XXXX confirmed the accuracy of the agrement ntoed and confirmed that our funds were still being held by SPS. XXXX XXXX also stated that his department handles the KYHC processing. My counselor asked XXXX XXXX to comply with RESPA guidelines and fulfill SPS 's obligation to issue an updated reinstatement quote, which included the payment which SPS had already received. Although XXXX XXXX acknowledged the error, and all of the underlying facts, he refused to make the needed correction and comply with the law. 

Morever, XXXX XXXX then stated that he had a new updated reinstatement figure of {$110000.00}. XXXX XXXX refused to provide a breakdown of this amount or an explanation of what it included. He refused to include the payment that was being held by SPS towards the reinstatement figure. When XXXX XXXX was advised by the Counselor, that if he did not make the correction, the Counselor would have no choice but to reach out to a governing agency regarding the issue, XXXX XXXX was dismissive and unconcerned. When the Counselor asked XXXX XXXX about other contact information, he refused to provide any additional information. 

In conclusion, SPS acted incompetently in the servicing of our loan. Further more, once SPS became aware of the servicing issue and acknowledged its error, SPS again failed to fulfill their own proosed resolution. SPS also failed to adhere to RESPS guidelines, apply funds to our loan, and follow the single point of contact negotiation process. 

Issue # 1- LetteXXXX issued by Select Portfolio Servicing stated they would not provide me with the payoff information requested.. Letter dated XX/XX/XXXX Violation of RESPA guidelines. The requirements set forth in 12 CFR 1024.36 Issue # 2 According to RESPA a person should serve as the Single Point of Contact in accordance with RESPA ( t ) the single point of contact shall remain assigned to the borrowers account until the mortgage servicer determines that all loss mitigation options offered by, or through, the mortgage servicer have been exhausted or the borrowers account becomes current. California Civil Code Ss 2923.7 ( c ). However, each member of the team must be knowledgeable about the borrowers situation and current status in the alternatives to the foreclosure process. California Civil Code Ss 2923.7 ( e ). This guideline was in part created to avoid possible miscommunication between the borrower and the lender..

Issue # 3 Under the Consumer Financial Protection Bureau ( CFPB ) Mortgage Servicer Guide, the {$4700.00} payment as was agreed to under a loss mitigation option, and we submitted a payment sufficient to cover principal, interest and escrow ( if applicable ) for a given billing cycle, under the modified loan contract, the servicer should have treated the payment as a periodic payment and not as a partial payment. As such, the payment should have been applied to the account within 5 days of receipt. However, by XX/XX/XXXX, the funds had been held for ten ( 10 ) days and therefore were beyond the five day threshold. At this point, SPS was obligated by RESPA to apply these funds, and reissue the reinstatement quote with the lower amount. The failure of SPS to follow this guideline is another violation of the RESPA guideline. Again even if the funds were applied to suspense any update reinstatement figure should have included the remitted payment held in suspense.

KYHC submitted a letter to us stating SPS would not accept the program.