Consumer complaint received 2019-12-21 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: SELECT PORTFOLIO SERVICING, INC.
State: CA

Complaint narrative:
I am asking for a short pay for my first mortgage. I offered XXXX US Dollars to pay off my loan and for SPS to give me a full reconveyance due to the fact that the loan has been discharged and liquidated. 

SPS will not verify my mortgage. I requested a verification of mortgage, but they said my account does not qualify and is a non reported account. XXXX Also please see the settlement from XXXX XXXX. 

XXXX XXXX is Accused of misrepresenting the quality of stated income loans in run-up to crisis. 

My mortgage is included in this crisis. XXXX XXXX settled and will bay billions. Please do the right thing and grant me a full reconveyance. 

XXXX XXXX will pay more than XXXX XXXX  for allegedly lying about the quality of subprime and Alt-A mortgages that backed residential mortgage-backed securities in the run-up to the housing crisis, the Department of Justice announced Wednesday. 

According to the DOJ, XXXX XXXX allegedly knew that loans that went into the mortgage bonds in question were based on misstated income information and allowed the loans to be securitized and sold nonetheless. 

Investors, including federally insured financial institutions, suffered billions of dollars in losses from investing in residential mortgage-backed securities containing loans originated by XXXX XXXX, the DOJ said in a statement. 

According to the DOJ, beginning in XXXX, XXXX XXXX launched an initiative to double its originations in subprime and Alt-A loans. As part of that push, XXXX XXXX allegedly loosened its requirements surrounding stated income loans, which are loans where a borrower declares their income without providing documentation to prove it. 

The DOJ claims that XXXX XXXX was aware that a substantial portion of its stated income loans contained misstated incomes from borrowers, but says that the bank failed to disclose this information. Instead, the bank allegedly provided investors with false debt-to-income ratios in connection with the loans it sold. 

According to the DOJ, XXXX XXXX allegedly took steps to insulate itself from the risks of those stated income loans by not holding most of those loans in its own portfolio, and limiting its liability to third parties for the accuracy of its stated income loans. 

The DOJ stated that XXXX XXXX sold at least XXXX stated income loans that were included in RMBS between XXXX to XXXX, and nearly half of those loans have since defaulted, resulting in billions of dollars in losses to investors. 

According to the DOJ, XXXX XXXX implemented 4506-T testing, wherein the company compared a borrowers stated income to their tax documents from the Internal Revenue Service. 

The DOJ claimed that XXXX XXXX testing showed that more than 70 % of the loans that XXXX XXXX sampled had an unacceptable variance, i.e. greater than a 20 % discrepancy between the borrowers stated income and the income information reported to the IRS. 

Additional testing showed that nearly half of the stated income loans that XXXX XXXX tested had both an unacceptable variance and did not have a plausible explanation for that variance. 

According to the DOJ, those test results were disseminated internally at XXXX XXXX on a monthly basis, and despite one risk management employee claiming that the 4506-T results are astounding, the bank continued to expand the stated income loan program. 

As part of the settlement, XXXX XXXX will pay a civil penalty of XXXX XXXX under the Financial Institutions Reform, Recovery, and Enforcement Act, but the DOJ notes that the claims resolved by the settlement are merely allegations, adding that the bank did not admit liability. 

Abuses in the mortgage-backed securities industry led to a financial crisis that devastated millions of Americans, said Acting U.S. Attorney for the XXXX District of California, XXXX XXXX. Todays agreement holds XXXX XXXX responsible for originating and selling tens of thousands of loans that were packaged into securities and subsequently defaulted. Our office is steadfast in pursuing those who engage in wrongful conduct that hurts the public. 

In a statement, XXXX XXXX CEO XXXX XXXX said that the bank is pleased to resolve this legacy issue. 

We are pleased to put behind us these legacy issues regarding claims related to residential mortgage-backed securities activities that occurred more than a decade ago, XXXX said. XXXX XXXX remains focused on our important role as one of the nations leading providers of mortgage financing and on our commitment to expanding sustainable homeownership opportunities for our customers. 

The settlement is just the latest in a string of payouts for the bank. Most recently, the bank agreed to pay {$480.00} million to shareholders to settle class action suit over the banks fake account scandal. 

That settlement stems from actions originally taken in XXXX by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the city and county of XXXX XXXX  to fine the bank {$150.00} million for more than 5,000 of the banks former employees opening as many as 2 million fake accounts in order to get sales bonuses. 

And in XXXX, the CFPB and the OCC announced a XXXX XXXX fine for the bank over auto  insurance and mortgage abuses. 

Last year, XXXX XXXX revealed that it was preparing to hand out XXXX XXXX in remediation for potentially wrongfully force-placing auto insurance on as many as 570,000 customers. 

The bank later disclosed that it agreed to pay {$100.00} million to the federal government to settle allegations that the bank overcharged military veterans for refinances. 

To read this latest settlement document in full, click here. 




Thank you,

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation