Consumer complaint received 2023-03-23
Product: Debt collection 
Sub-product: Mortgage debt
Issue: Attempts to collect debt not owed
Sub-issue: Debt was already discharged in bankruptcy and is no longer owed
Company: Specialized Loan Servicing Holdings LLC
State: CA
Tags: Older American

Complaint:
Specialized Loan Servicing, LLC is a debt collector that took over a loan that was previously loan serviced by XXXX XXXX XXXX, XXXX. XXXX  XXXX XXXX XXXX XXXX and later XXXX XXXX XXXX XXXX XXXX, XXXX. The loan is based on a XXXX loan generated by XXXX XXXX  XXXX XXXX XXXX on or about XX/XX/XXXX. On or about XX/XX/XXXX XXXX XXXX  XXXX ( a loan broker ) recorded the debt at XXXX XXXX XXXX XXXX XXXX, XXXX, California with a Deed of Trust that added an additional parcel of land that was not included in our loan documents or descriptions of pledged land. The value of that additional parcel was approximately {$47000.00} for XXXX square feet of view property and is listed at the county as vacant, unimproved land. The loan with XXXX was for refinance and money to finish out a second dwelling unit ( mother-in-law ) over our garage. The loan value was {$560000.00} and the property of our home located on a separate tax parcel was appraised for {>= $1,000,000}. 
In XXXX we talked with XXXXXXXX XXXX XXXXXXXX XXXX ( XXXX ) about having a dry spell in consulting income. Instead of working with us, and after refusing offers of payments, we were informed that the loan was in foreclosure. We rejected their duplicitous actions and they verbally offered a forbearance agreement. The terms were full of errors and upon receipt of the written forbearance agreement on or about XX/XX/XXXX on the same day received I rejected the agreement in writing by email and mail, asking for corrections. At that time, I was unaware of the material alteration of our loan document. Following my immediate rejection, XXXX never submitted a new agreement [ this was admitted by XXXX during a trial. ] After making payments we thought exceeded the current amount due, I again asked XXXX for an accounting and corrected agreement. Instead XXXX through XXXX XXXX XXXX XXXX XXXX ( XXXX ) recorded a notice of non-judicial foreclosure. The foreclosure was based upon the rejected forbearance agreement. XXXX did not claim we were in default on the XXXX Mortgage. It turns out that in a Foreclosure Title Insurance Policy, XXXX confirmed there was no enforceable loan and they would not insure that title. We filed a complaint in XXXX XXXX XXXX seeking an Injunction ( temporary injunction was approved ) and state court of appeals confirmed that the forbearance agreement was void under statute of frauds. XXXX recorded a notice of rescission of the notice of default. Then filed a new notice of default in XXXX. We used a XXXX  XXXX bankruptcy complaint to stall the next non-judicial foreclosure in XXXX XXXX, which NOD was rescinded later. In the meantime, XXXX transfered the loan servicing to Specialized Loan Servicing, LLC ( SLS ) which, as had XXXX XXXX used our payments for themselves. We are trying to get the loan servicer to stop collections and to return our funds paid over the years from XXXX through now, as we are forced to continue to make payments under duress on a void ab initio debt to be able to stop any non-judicial foreclosure payments. Presently, Specialized Loan Servicing, LLC the current debt collector is abusing uses of funds and taking payments without legal standing. Today we submitted our 13th Qualified Written Request/Request for Information to SLS and disputed the debt, their collection practices and the legal standing of the debt. 
When XXXX recorded the original loan Deed of Trust XXXX their adding an additional parcel to our pledged real property was done in secrete, without our permission or approval or knowledge. Per California Civil Code Section 1700 a " material alteration of a contract '' " extinguishes any performance required of us '', the party that was not a party to the material alteration. The Loan Servicers and their attorneys know this and admitted the alteration of the deed of trust in court hearings and concerns that the 'debt could be determined noncollectable and the deed void in a future judicial proceeding ' and have listed the amount owed as {$0.00} but continue to attempt to collect debts monthly or will record a new non-judicial foreclosure. We are in our XXXX 's and this abuse is wearisome.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation