Consumer complaint received 2018-07-22
Product: Mortgage — Other type of mortgage
Issue: Struggling to pay mortgage — 
Company: SELECT PORTFOLIO SERVICING, INC. (CA)

TO : Consumer Financial Protection Bureau ( CFPB ) RE : Select Portfolio Servicing Errors and Pending Wrongful Foreclosure Dear Sir or Madame, Your attention is kindly requested regarding the serious error that was made by Select Portfolio Servicing ( SPS ) and the dishonest practices and delaying tactics used by the prior servicer of my XXXX  Option Arm mortgage loan, XXXX XXXX XXXX.

A Select Portfolio Services representative has claimed that my Request for Modification Application was never received during or after the servicing transfer of my mortgage loan account to them, but refuses to correct their servicing transfer error in light of this fact. Their claim is also highly implausible and demonstrably untrue. In fact, my Mortgage Relief Modification Applicaton was under submission at the time of the servicing transfer to SPS.

Therefore, the only explanation for this error is that SPS either ignored or lost my applicaton in the servicing transfer. The claim that they did not receive it is dubious for the following reasons : 1. It is my understanding is that banks and servicers are legally required to review home retention applications that are already under submission, even if the account is transferred from one servicer to another. Therefore, the original servicer was legally bound to transfer my pending modification application to SPS along with my account records and the servicing duties of my account.

2. Moreover, I mailed a duplicate copy of my submitted application directly to SPS, after the servicing of my account was transferred from XXXX XXXX to SPS.

3. It is also my understanding that servicers are legally required to render a determination and provide notice to the borrower regarding whether they are or are not considered eligible for a modification and servicers must also provide required disclosures along with their determination. To this date, I have received nothing of substance from SPS regarding my pending application that was transferred to them.

4. Therefore, since no determination was ever received from the prior servicer before they transferred servicing of my mortgage loan to SPS, logically, my pending application would have remained legally active and would have been transferred to SPS along with the servicing records and responsibilities. 
5. Furthermore, servicers are required to render a decision prior to taking steps to foreclose. Therefore, I believed this requirement would be a deterrent, because any steps SPS would take toward a foreclosure sale without providing a determination on my application would be a violation of law and would result in Wrongful Foreclosure.

6. Lastly, because the application was still pending and no required determination or response was provided, it is highly implausible that the application was not transferred and SPS did not receive copies of my application. The implausibility is even more evident, since I also directly mailed another copy of my application to SPS myself.

On a related matter, In my effort to prevent further Errors and Wrongful Foreclosure, I phoned SPS on XX/XX/2018 to inquire regarding my Notice of Errors and request for a brief sale postponement I sent, since I have not received a response from SPS regarding their errors to this date and my concern that the upcoming trustee sale is in only a matter of days.

During the phone call, I, again, requested that SPS temporarily postpone the XX/XX/2018 trustee sale of my home, so that the errors can be corrected regarding my pending application that was under submission at the time of servicing transfer, especially since there was an error, as they claim it was never received. 

At this point, a brief postponement of the trustee sale would be mutually beneficial and would allow time to resolve the outstanding issues, ( e.g. SPS failure to review my pending application, subsequent unwillingness to engage in loss mitigation or allow me to re-submit the [ allegedly ] missing application, their wrongful dual tracking and other errors that I recently complained about in my RESPA, Notice of Errors letter sent XX/XX/XXXX, sent again XX/XX/XXXX and, a third copy sent on XX/XX/XXXX ). 

Also, a brief postponement of the sale and a mutual resolution would also provide another benefit. It would prevent the necessity for further litigation and new lawsuit for Wrongful Foreclosure. Unfortunately, however, during my XX/XX/XXXX phone call to SPS, I was informed, verbally, that SPS refuses to postpone the trustee sale and continues to refuse to assist in reaching a resolution to the errors. 

I have also not received a reply to my earlier Notice of Errors, Requests for Information, and Qualified Written Requests to this date, XX/XX/XXXX, and the pending sale is extremely near. 

Regarding the transfer and timeline, when the original servicer transferred my account to SPS, it was my reasonable belief that my Application for Loan Modification ( that was under submission with the prior servicer at the time of the transfer ), would also be transferred with my account and would be reviewed by SPS. I also believed SPS would ultimately render a determination, as required.

However, in light of the unexpected servicing transfer and the preventive safeguards I took, I was willing and accommodating to SPS by patiently waiting for them to follow through with a determination. I courteously allowed them more than ample time to acclimate themselves to to the mid-stream transfer of my account, and was considerate of their late-coming to new, incoming accounts and servicing responsibilities.

Also, since I have never experienced a servicing transfer before, especially during the active process regarding a loan modification application, I was unfamiliar with the transfer and processing timeline. Therefore, when SPS took a long time, I reasonably believed the excessive delay was due to the unexpected transfer.

Further, the delay did not seem abnormal regarding my pending application, since, in my experience with the prior servicer, they had caused a significant delay in the processing of my application over a lengthy period of time. In fact, the original servicer took long periods of processing time and would sometimes make intermittent requests to re-submit same or similar documents that were already submitted for varying and questionable reasons.

However, after diligently providing my last submission in full compliance with the servicers stated requirements, my application was complete. In addition, with no further revisions or requests for information forthcoming thereafter and, in particular, because no final determination had been rendered on the submitted application by either servicer, based on the foregoing facts, it strongly indicated to me that my last submission was, in fact, complete and I did not worry that it would not ultimately be reviewed by SPS at some point in time after the transfer.

Also, due to the fact my application was provided to both servicers and in light of the significant legal requirements placed on servicers, I was more than confident that my pending application was being handled properly and would ultimately be processed. Therefore, I reasonably believed SPS received and would review my pending application at some point in time after the transfer.

After patiently waiting for SPS to review my application and provide me with the required determination regarding my eligibility, in accordance with RESPA and California HBOR Civil Code requirements after the transfer, ultimately, no determination was ever forthcoming and that is when the transfer error came to light When the error was, in fact, discovered some months after the transfer, I then requested that I be allowed to continue the home retention loss mitigation and re-submit the allegedly lost application. However, SPS wrongfully refused to allow me to re-submit my ( missing ) application and, in light of their claim of never receiving it, their refusal to correct the transfer error constitutes a violation of the Dodd-Frank Act provisions and California State Law, Civil Code - CIV 2924.11 ( a ). 

Their earlier refusal, also, caused the unnecessary burden of having to seek and hire an attorney in XX/XX/XXXX and to file suit. However, during the litigation, my attorney told me that SPS continued to refuse to allow me to re-submit my application or any home retention options. The lawsuit wasted even more time. 

Although I dismissed the attorney for reasons of impropriety, it appears SPS now continues their wrongful refusal to correct the transfer error and loss of my pending application and is unwilling to seek a mutual resolution, which will now cause further litigation and a repeated necessity to hire another attorney. 

Also, I was told verbally that SPS also refuses to postpone the sale to allow time to affect a mutual resolution, in spite of the fact that the upcoming sale will, further, result in new litigation for Wrongful Foreclosure.

Regarding my current Qualified Written Requests, Notice of Errors and Request for Information submitted on XX/XX/XXXX to SPS in accordance with RESPA, Section 6 of the Real Estate Settlement Procedures Act ( 12 U.S.C. 2605 ), the letter also included some previously ignored and unanswered questions. The XX/XX/XXXX QWR letter also pointed out the servicing transfer error and SPS 's failure to properly review my active application that was or should have been transferred to them. 

To be doubly prudent, I sent a duplicate copy of the QWR, Notice of Errors and Request for Information by two methods, regular and Certified Mail, and in accordance with the law and the requirements under RESPA, and Reg. X, 12 C.F.R. 1024.35 ( d ) and ( e ). 2 Reg. X, 12 C.F.R. 1024.35 ( e ) ( 3 ) ( i ) ( B ) and 1024.35 ( f ) ( 2 ) ; Reg. X, 12 C.F.R. 1024.35 ( f ) ( 2 ).

Since I have not received a reply to my Notice of Errors to date and considering the trustee is in a matter of days, I am very concerned and believe that a grievous error may, possibly, occur regarding SPSs lack of compliance with the law regarding transfer and processing of home rentention loss mitigation applications and for the Wrongful Foreclosure and sale prior to correction of this error.

This has brought to the forefront my unfortunate understanding and realization that the transfer error phenomenon is widely known as Mod in Flight in the mortgage industry and is a common business practice. The entire servicing transfer debacle, that is allowed to take place during an active process for loan modification, seems highly strategic and unfair and is very detrimental to struggling homeowners. 

Furthermore, there is a great need for legislation to prevent such servicing transfers, during and while banks or servicers are mid-stream in a pending loss mitigation process for mortgage relief for homeowners. 

In fact, so long as a modification application has been timely submitted, as requested by the servicer, and no determination, either way, has yet been rendered on the application, absent extreme extenuating or emergency reasons, ( e.g. the dissolution of the bank or servicing company ), the practice of mid-stream servicing transfers should be banned. In fact, the Mod in Flight errors and servicing transfer practices are a fundamental injustice and should never be allowed.

Your attention and assistance in this matter will be greatly appreciated.