Consumer complaint received 2016-09-11
Product: Mortgage — Home equity loan or line of credit
Issue: Loan servicing, payments, escrow account — 
Company: Specialized Loan Servicing Holdings LLC (CA)

The Claim : Our HELOC mortgage payment sent to SLS Loan Servicing ( SLS ) in the amount of {$10000.00} has been erroneously endorsed by XXXX XXXX ( XXXX ) and misapplied and erroneously credited to an unknown account at XXXX. SLS was notified of the error on XX/XX/XXXX but to this date refuses to either acknowledge receipt of the check or to sign an Affidavit of Forgery or Misapplied Funds that will allow our bank, XXXX XXXX XXXX ( XXXX ), to pursue a claim against XXXX for the erroneous endorsement and/or proper credit of the misapplied funds. 
The Facts : In XX/XX/XXXX we opened a HELOC account with XXXX XXXX. That loan was apparently sold to a securitization owned by an unknown investor on an unknown date sometime before we made the first draw on the HELOC on XX/XX/XXXX. Servicing on the HELOC was transferred to SLS sometime around XX/XX/XXXX. We sent the {$10000.00} mortgage payment by personal check ( the " Check '' ) to SLS via USPS addressed to their designated XXXX in XXXX GA ( see attached copy of front and back of the Check ). On XX/XX/XXXX the Check was erroneously endorsed by XXXX as payable to one of their accounts and on XX/XX/XXXX the Check was cleared by XXXX and the {$10000.00} was disbursed to an unknown payee. On or before XX/XX/XXXX we discovered that the proceeds of the check had not been credited to our HELOC, and on that date we filed a claim with the Postal Inspector at the USPS and complained in writing to SLS requesting SLS to either correct the misapplication of funds or sign and send to XXXX an Affidavit of Forgery or Misapplied Funds so XXXX could pursue a claim against XXXX. We signed and delivered such an affidavit to XXXX on XX/XX/XXXX. On XX/XX/XXXX we contacted the XXXX Ethics Line by email to request an investigation, since XXXX or one of its clients was the apparent recipient of the misapplied funds. On XX/XX/XXXX we received a letter from SLS ( copy attached ) disputing that they had ever received the Check and disclaiming any responsibility for the misapplication of the funds from the Check. 
Current Situation : The HELOC matures and final payment is due on XX/XX/XXXX. We have paid the outstanding balance down to approximately {$10000.00} but will have difficulty paying off that remaining balance if we do not recover the {$10000.00} in misapplied funds. We have an on-going ethics investigation pending at XXXX, and have recently discovered that the loan syndication may have been purchased by XXXX, who SLS told XXXX Ethics is currently the owner of the HELOC. ( XXXX = XXXX XXXX XXXX XXXX XXXX. ) Since we are still investment clients of XXXX XXXX, we have requested an investigation at that entity as well. In our view, the funds are currently held by XXXX on behalf of XXXX, but the funds were erroneously deposited in the wrong XXXX account by SLS. However, XXXX has now essentially washed their hands of the situation ( see attached letter ), even though they are the key to tracing the funds at XXXX either through their auditing of the internal routing of the Check, or by providing the necessary affidavit to XXXX so it can trace the source of the erroneous endorsement at XXXX.