Consumer complaint received 2020-12-18
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: SELECT PORTFOLIO SERVICING, INC. (CA)

We submitted a Qualified Written Request ( QWR ) to Select Portfolio Servicing, Inc. ( SPS , Inc. ) on XX/XX/XXXX detailing three main questions regarding our ongoing principal balance dispute and to which we are owed a reasonable and correct explanation thereof, as per 12 C.F.R. 1024.35.

SPS, Inc. acknowledged receipt of our QWR in writing on XX/XX/XXXX, but to date has failed in their obligation under 12 C.F.R. 1024.35 ( a ) and 12 C.F.R. 1024.35 ( e ) to respond to our XX/XX/XXXX QWR. As per 12 C.F.R. 1024.35 ( a ), a qualified written request that asserts an error relating to the servicing of a mortgage loan is a notice of error for purposes of this section ( 12 C.F.R. 1024.35 ( a ) ), and a servicer must comply with all requirements applicable to a notice of error with respect to such qualified written request.

As per 12 C.F.R. 1024.35 ( e ) ( 1 ) ( i ) ( A ) and 12 C.F.R. 1024.35 ( e ) ( 1 ) ( i ) ( B ) Select Portfolio Servicing Inc. is required to correct the error or errors or conduct a reasonable investigation and ( provide ) the borrower with a written notification that includes a statement that the servicer has determined that no error occurred, a statement of the reason or reasons for this determination, a statement of the borrower 's right to request documents relied upon by the servicer in reaching its determination, information regarding how the borrower can request such documents, and contact information, including a telephone number, for further assistance. As of XX/XX/XXXX, we have not received a written or verbal response to our XX/XX/XXXX QWR which is in clear violation of 12 C.F.R. 1024.35 ( e ) ( 3 ) ( i ) ( C ) which requires the servicer to comply with the requirements of 12 C.F.R. 1024.35 ( e ) ( 1 ) not later than 30 days ( excluding legal public holidays, Saturdays, and Sundays ) after the servicer receives the applicable notice of error. 

SPS, Inc. acknowledged receipt on XX/XX/XXXX and subsequently responded to our Notice of Error on XX/XX/XXXX, but the company never responded to our XX/XX/XXXX QWR and the separate and distinct questions posed therein even though they acknowledged receipt of our QWR along with a separate acknowledgement of receipt on XX/XX/XXXX of our XX/XX/XXXX Notice of Error. The company 's subsequent response to our XX/XX/XXXX Notice of Error did not constitute an answer to or address the specific questions we posed to them in our XX/XX/XXXX QWR and the companys XX/XX/XXXX response to our XX/XX/XXXX Notice of Error is not a substitute, duplicative or simultaneous response to our XX/XX/XXXX QWR. 

Therefore, 12 C.F.R. 1024.35 ( g ) ( 1 ) ( ii ) Overbroad notice of error does not apply in this case. 

Our XX/XX/XXXX QWR is a different set of inquiries than that of our XX/XX/XXXX Notice of Error, although both the QWR and Notice of Error are regarding the same ongoing dispute with SPS, Inc. Specifically, our XX/XX/XXXX QWR is in response to SPS, Inc.s XX/XX/XXXX reply to our XX/XX/XXXX Notice of Error, one of at least other Notices of Error and Qualified Written Requests we have submitted to SPS , Inc. since XX/XX/XXXX with respect to our ongoing and as yet unresolved unpaid principal balance dispute with the company. 

Therefore, the QWR we submitted on XX/XX/XXXX concerns different and additional errors from the errors we brought forth in our XX/XX/XXXX Notice of Error, and SPS, Inc. is required to provide a response under 12 C.F.R. 1024.35 ( e ) ( 1 ) ( ii ).

Furthermore, our QWR and Notice of Error are different and separate submissions which the company has acknowledged receipt of separately. As such, the companys XX/XX/XXXX response to our XX/XX/XXXX Notice of Error does not comport to 12 C.F.R. 1024.35 ( g ) ( 1 ) ( i ) as we have provided new and material information to support the asserted error in our XX/XX/XXXX QWR that was not brought forward in our XX/XX/XXXX Notice of Error. 

Since XX/XX/XXXX we have disputed ( in writing ) to SPS, Inc.s prior explanations to our previously submitted Qualified Written Requests or Notices of Error because their replies have not been in accord with the Loan Agreement and Deed of Trust, or the company has not provided us with factual explanations, and they have used incorrect and falsified transaction records as supporting evidence and to which we have explained to them in writing and without subsequent rebuttal from the company. 

Since SPS, Inc. has not corrected their error in the unpaid principal balance or provided a correct and reasonable explanation that no error has occurred, as per 12 C.F.R. 1024.35 ( e ) ( 1 ) ( i ) ( B ), our dispute with SPS , Inc., remains unresolved.

To date, the questions we posed to SPS, Inc. in the XX/XX/XXXX and previous QWRs and Notices of Errors remain unanswered and we still await a response from the company. A summary of the questions from the XX/XX/XXXX QWR are : 1. Explain how SPS, Inc. determined the unpaid principal balance while they and the prior servicers were under the Loan Agreement ( Note ) and Deed of Trust and by following the terms and conditions of the Loan Agreement and Deed of Trust, including the loan amortization schedule and other legal obligations that SPS, Inc. is legally obliged to comply with as the loan servicer of our mortgage.

2. Explain how deferred interest was added to the principal balance ( SPS, Inc.s XX/XX/XXXX explanation ) and how all accrued interest was deferred to the end of the loan ( SPS XXXX Inc.s XX/XX/XXXX explanation ) under the Loan Agreement and Deed of Trust when : a. additions to the principal balance or deferrals from payment by the Borrowers ( us ) were not authorized by the Loan Agreement and Deed of Trust b. no loan modification was agreed to or undertaken between us and SPS, Inc. or any prior loan servicer that authorized additions to the principal balance or payment deferrals until the end of the loan. This includes the temporary forbearance agreement that was agreed between us for the period between XX/XX/XXXX and XX/XX/XXXX and which : i. we successfully completed on XX/XX/XXXX and ii. which the prior servicer ( a.k.a. the original lender XXXX XXXX XXXX XXXX , XXXX ) never recommenced foreclosure as was their obligation under the forbearance agreement if we did not fully comply with the forbearance agreement iii. did not include provisions for additions or increases to the principal balance or deferrals from payment of principal or accrued interest amounts until the end of the loan except the provision under Paragraph 4 of the forbearance agreement that described the deferral from payment to the end of the loan of the balance interest arrears that remained after the lender serviced all payments of the installments, escrow payments, legal fees and interest arrears that accrued in the suspense fund that the lender was obligated to establish under Paragraph 4 in order to hold such payments and expenses during and only during the period of the forbearance agreement and until either : 1. we successfully executed our payment obligations under the forbearance agreement at which point the lender was obligated under the Loan Agreement to service all the payments and expenses that they had accrued in the suspense fund and to reinstate the loan or 2. we failed in our obligations under the forbearance agreement at which point the lender was required to recommence foreclosure c. no amount was ever added to the principal and no record or evidence of an increase to the principal balance has been recorded in any periodic statement or transaction report by any of the loan servicers, including SPS, Inc.

As of this writing, SPS, Inc. has never correctly explained, according to the Loan Agreement and Deed of Trust between us and to which they have a fiduciary obligation, how they determined the unpaid principal balance on record with us and with the credit reporting agencies and federal and state agencies. 

As of this writing, SPS , Inc. incorrectly reports the unpaid principal balance on our mortgage loan as {$180000.00}. However, SPS , Inc. correctly reports the loan origination date as XX/XX/XXXX, the maturity date as XX/XX/XXXX, the interest rate fixed at $ 7.888 % and a Deferred Principal of {$0.00}. Furthermore, SPS , Inc.s correctly reported loan origination date, maturity date and interest rate are consistent with the Loan Agreement and Deed of Trust provisions agreed to between us. However, the unpaid principal balance and explanation of Amount Due reported by SPS, Inc. are in error as they are not consistent with the Loan Agreement and Deed of Trust and our payment history, which is current and on-time with respect to the Loan Agreements payment schedule. 

According to the Loan Agreement and Deed of Trust and SPS , Inc.s loan amortization table generated by the same, and given our current on-time payment status with respect to the schedule, the correct unpaid principal balance is {$91000.00}. SPS, Inc. provided us a loan amortization table which correctly reported the Loan Agreement and Deed of Trust provisions agreed to between us and which we used to determine the correct unpaid principal balance we report herein. 

We have also attached copies of our XX/XX/XXXX QWR and Notice of Error, SPS, Inc.s acknowledgements of receipts of the same and the companys XX/XX/XXXX response to our Notice of Error, as well as other related documents we have previously submitted to SPS , Inc. in support of our case.

Cc : California Department of Business Oversight