Consumer complaint received 2018-08-02 00:00:00
Product: Payday loan, title loan, or personal loan — Personal line of credit
Issue: Getting a line of credit — 
Company: Specialized Loan Servicing Holdings LLC
State: CA

Complaint narrative:
Complaint from Consumer 1 and 2, written by Consumer1 on XXXX Consumer1 and Consumer2 were and continue to be targets of PREDATORY LENDING business practices by XXXX XXXX XXXX, XXXX XXXX XXXX investors, XXXX XXXX XXXX and Specialized Loan Servicing, LLC.

1. We are both XXXX but were intentionally classified as white in loan documentation XXXX of XXXX. 
2. We found a home to purchase at XXXX XXXX, XXXX XXXX XXXX in XXXX California early XXXX. 
3. We were verbally pressured to use a PH PREFERRED lender which at the time consisted of XXXX XXXX XXXX  and XXXX XXXX XXXX. 
4. I began working with XXXX XXXX of XXXX XXXX XXXX. After approximately 8 days of no communication, I called PH and they advised me to relax, XXXX was on vacation. 
5. When XXXX communicated with me again, my application was now with XXXX XXXX XXXX and was in the middle of being processed. His assistant also followed him to XXXX. I was not asked if I granted permission for my application to move from XXXX XXXX XXXX  to XXXX XXXX XXXX. XXXX XXXX, a XXXX XXXX XXXX employee unbeknownst to me, took our loan application and started a new application at his new place of employment XXXX XXXX XXXX I was deceived and mislead. 
6. When I called XXXX XXXX XXXX to trace my application, they had no records of any communication. 
7. I contacted XXXX to discuss the strange circumstances and they assured me that all was fine. That XXXX was indeed a preferred lender and if we used this lender, we would not pay closing costs. Their assurances indicated to us that what had just transpired was not unusual and we took their advice as implied approval of the event. 
8. We never met XXXX XXXX or his assistant. Everything was handled by phone, e-mail and fax. Mostly by phone. 
9. When our final loan documents were mailed to us for signature, there were 2 sets : 1 loan for $ XXXX and another for $ XXXX. I called XXXX XXXX for an explanation and he stated that by bundling the 2 loans vs. 1 Jumbo loan, I would have a lower interest rate, save money. XXXX did not disclose that by placing us into 2 loans, he would be eligible for 2 bonus commissions and did not disclose that we were about to allow XXXX to place 2 liens on our new home which was still being built. That we were about to walk into a very risky mortgage agreement serving only XXXX XXXX XXXX  and the interest of their investors. 
10. We did not know the HELOC of $ XXXX was classified as a subprime, high rate, equity line of credit. These details were not disclosed to us by XXXX XXXX, agent for XXXX XXXX XXXX. 
11. Pressured by XXXX XXXX to close the deal OR give up our place, our opportunity to purchase our new home, we signed the documents after several phone calls and arguments. 
12. We were functioning under the threat of XXXX XXXX to accept the deal and hurry to close the deal without asking any questions or give up our hold on the new home and our deposit so that the house could be sold to someone else. 
13. XXXX did not disclose any of the risky terms until we felt it was too late to back out. We were not informed of our TILA rights but rather threatened to basically shut up and sign. 
14. As a result, XXXX willfully violated TILA and according to the Federal Deposit of Insurance Corporation predatory lending is a crime in California when the lender manages the loan transaction to extract the maximum value for itself without regard for the borrowers ability to repay the loan. 
15. Several months later when the housing market collapsed, I made every effort to modify our mortgage and HELOC which was not with XXXX XXXX XXXX. 
16. I succeeded modifying the $ XXXX loan. 
17. I was informed by XXXX XXXX XXXX ( verbally ) that the XXXX/XXXX  - HELOC at $ XXXX was discharged/charged-off and that I was not required to make any payments at the time or ever. 
18. At one point the $ XXXX HELOC note came under the services of XXXX XXXX. I received a notice from them about the XXXX and again was informed the same > > not an attempt to collect a debt, no payments due, the notice should not be considered an invoice or statement. 
19. I sporadically received Consumer2ual notices and called to inquire about the mail, which looked like an unprofessional flier, and again received the same response as before > > not an attempt to collect a debt, no payments due, the notice should not be considered an invoice or statement. 
20. I then received a notice from Specialized Loan Servicing stating exactly the same as Ive mentioned above > just a notice, no payment required. 
21. Meanwhile I diligently checked my credit reports, recorded documents with the XXXX XXXX XXXX, XXXX California and NEVER discovered the XXXX Lien for {$64000.00}. I checked Consumer2ually and being that nothing was recorded I assumed this was a scam and ignored the notices. 
22. I recently got divorced and again, I checked my credit and recorded documents with the XXXX XXXX County and found nothing. I was checking to be sure my ex-husband was off title. 
23. Still not at ease, I asked a realtor friend to please order a clean-title report for me. It was only then that I discovered the XXXX XXXX XXXX Lien for $ XXXX plus $ XXXX in interest. 
24. I called SLS, LLC to request historical details about the lien including the name of investor and they have refused. This occurred the week of XX/XX/XXXX. 
25. They ( XXXX XXXX XXXX, SLS, LLC ) will not put anything in writing! 
26. They would not provide me an invoice unless I agreed to pay {$25.00}. 
27. They refused to reply to my e-mail inquiries. 
28. I can call/phone them ( SLS, LLC ) and they can record me, but I cant record them. 
29. I offered {$32000.00} to settle the matter ( if I sold my house ) but they declined and informed me that to make such as offer, I had to agree to have the home appraised by one of their contractors and complete a recovery application for their review. 
30. I was NEVER offered this option while I was in bankruptcy or struggling with payments. 
31. I had ALWAYS been told the HELOC was discharged/Written-off and no payments were expected. 
32. I have done an enormous amount of work tracing the path of this HELOC and I believe its IMPOSSIBLE for me to learn the truth, and I am intentionally kept away from the facts so that the predatory lender/predatory investor can ambush me and take any hard-earned equity or eventually foreclose and take my familys home. Destroy me financially AGAIN. 
a. HELOC originated with XXXX XXXX XXXX. 
b. XXXX  XXXX XXXX purchased XXXX. 
c. XXXX XXXX begins to service the HELOC. XXXX XXXX disbands. 
d. SLS, LLC begins to service the HELOC. 
e. Somehow the XXXX XXXX XXXX XXXX XXXXXXXX is in the picture. 
f. XXXX refers me back to XXXX XXXX XXXX as the Master servicer. 
g. In a call to XXXX XXXX XXXX I am told the HELOC was a mandatory discharge, mandatory charge-off and that they would send me a letter so that SLS will leave me alone. 
h. Instead I received a letter stating that the HELOC was now with XXXX ; SLS, LLC is owned by XXXX. 
33. It is IMPOSSIBLE for me to easily obtain the facts about this HELOC. 
34. Further XXXX XXXX XXXX, XXXX XXXX XXXX XXXX , XXXX XXXX XXXX, XXXX XXXX, XXXX and SLS, LLC willfully violate California Civil Code Section 2923.5 to act with and practice due diligence and be sure I am contacted with all the facts of the situation, the deadlines, the options, the demand, etc. 
35. There have been numerous class action lawsuits assembled and settled. I was NOT contacted by anyone to participate nor was Consumer2. 
36. There have been numerous lawsuits set on behalf of XXXX XXXX vs. XXXX XXXX  XXXX that have long been settled. According to several law reviews, investors received restitution from XXXX XXXX XXXX. WHY are these investors seeking a 2nd round of restitution from the Consumer2? 
37. In addition, it is assumed that by now, 11 years after the HELOC was originated, that investors have already listed the investment as a loss and taken income tax credits for such a loss. You cant chase recoupment after youve already accept the loss and tax credits. 

What do Consumer1 and Consumer2 want? 
1. Send by certified mail satisfaction of XXXX HELOC, approximately {$64000.00}, 2nd lien as paid in full. 100 % satisfied. 

2. Strip this lien, referenced above by XX/XX/XXXX Here are a few headlines : XXXX XXXX XXXX : XXXX  willfully violated TILA and according to the Federal Deposit of Insurance Corporation predatory lending is a crime in California when the lender manages the loan transaction to extract the maximum value for itself without regard for the borrowers ability to repay the loan. 
XXXX  XXXX XXXX Relief for Mortgage Borrowers Is Questioned - By XXXX XXXX - XX/XX/XXXX5 US Dept of Justice web site : Justice Department Reaches {$330.00} XXXX Settlement to Resolve Allegations of Lending Discrimination by XXXX XXXX XXXX - More than 200,000 XXXX and Hispanic Borrowers who Qualified for Loans were Charged Higher Fees or Placed into Subprime Loans United States Department of Justice Office of Public Affairs FOR IMMEDIATE RELEASE Thursday, XX/XX/XXXX XXXX XXXX XXXX to Pay {$16.00} XXXX in Historic Justice Department Settlement for Financial Fraud Leading up to and During the Financial Crisis After 5 years, XXXX investors are paid {$8.00} XXXX settlement by XXXX XXXX | XX/XX/XXXX Mortgage bond investors are finally getting paid the {$8.00} XXXX settlement theyre owed in an agreement involving XXXX mortgage bonds. 
Mortgage bond investors sued over shoddy mortgages originated by XXXX XXXX XXXX XXXX unit. XXXX XXXX XXXX XXXX  XXXX, the trustee for the bond investors, originally agreed to accept an {$8.00} XXXX settlement five years ago. But in the ensuing years, a legal battle raged over whether XXXX XXXX XXXX XXXX   XXXX acted within its authority when it agreed to settle, according to a XXXX report. 


XXXX XXXX Refunds Go Out to Abused Homeowners The Federal Trade Commission Consumer2ounced last month that it is mailing out refund checks to XXXX XXXX homeowners who were charged excessive fees in their mortgages by XXXX XXXX XXXX. 

Recoupment : This is a legal theory that allows someone to raise defenses against a bank or other business even if the statute of limitations for those claims has passed. Recoupment is an equitable doctrine that allows you set off your claims against what someone is trying to recover from you. In this case, it is used against banks who foreclose. 
For instance, one case in the First Circuit Court of Appeals, called XXXX XXXX XXXX XXXX, states that even though foreclosure might be non-judicial, and there is no actual lawsuit filed against the homeowner, the homeowner can still file a lawsuit in recoupment to stop a predatory lender. 
Another case from the Massachusetts Supreme Judicial Court called XXXX v. XXXX implies that homeowners may be able to assert claims against predatory lenders in recoupment. The Court writes that the right of recoupment contains no time limitations on assertion of the right. This accords with the common-law understanding of recoupment as a defensive mechanism whereby a defendant may, at any time, assert claims against the plaintiff in reduction of the plaintiffs claims when those claims arise out of the same transaction ; it is an offsetting of liabilities within a transaction. 
In other words, Massachusetts law allows a defendant ( a homeowner ) to assert claims against the plaintiff ( the bank ) for predatory lending, at least to the extent that the claims offset the defendants ( homeowners ) liability.

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