Consumer complaint received 2025-01-31 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Interest rate
Company: SELECT PORTFOLIO SERVICING, INC.
State: WA

Complaint narrative:
I am filing a complaint against Select Portfolio Servicing , Inc. ( SPS ) regarding predatory lending practices, unfair interest rate hikes, and unlawful loan servicing actions that have resulted in an unmanageable financial burden and imminent risk of foreclosure. 

1. Unfair Interest Rate Increase ( Effective XX/XX/XXXX ) On XX/XX/XXXX, I received a Notice of Default from SPS stating that my interest rate had increased from 8.5 % to 35 %, causing my monthly payment to skyrocket from {$2700.00} to {$9300.00} ( including escrow ). This extreme rate hike was imposed due to delinquency, but the original loan documents did not clearly outline such a predatory default rate. 

Previous Monthly Payment ( 8.5 % Interest Rate ) : {$2700.00} New Monthly Payment ( 35 % Interest Rate ) : {$9300.00} New Principal & Interest Payment Alone : {$9000.00} This excessive interest rate increase was not properly disclosed before closing, which violates TILA ( Truth in Lending Act ) regulations requiring transparent loan terms. A 35 % default rate is unconscionable and designed to force foreclosure rather than provide a viable repayment path.

2. Coercive and Unaffordable Repayment Plan On XX/XX/XXXX, SPS offered me a three-month repayment plan requiring payments of {$18000.00} per month, with no other loss mitigation alternatives. The repayment terms were unreasonable and structured to ensure default, rather than assist in curing the delinquency. 

Repayment Plan Terms : XX/XX/XXXX : {$18000.00} XX/XX/XXXX : {$18000.00} XX/XX/XXXX : {$18000.00} Failure to meet any of these payments would result in immediate foreclosure proceedings. The lack of alternative options violates RESPA ( Real Estate Settlement Procedures Act ) loss mitigation regulations, which require servicers to evaluate borrowers for affordable loan modifications before foreclosure. 

3. XX/XX/XXXX Mortgage Statement Shows Drastic Payment Increase My February 2025 monthly mortgage statement reflects : Total Amount Due : {$29000.00} Past Due Balance : {$19000.00} Interest Rate : 35 % Principal Due : {$0.00} ( Loan balance mismanagement ) Interest Due : {$9000.00} Escrow ( Taxes & Insurance ) : {$950.00} This sudden and excessive payment increase is unjustified and a clear predatory lending tactic aimed at making it impossible for me to keep my home. 

4. Loan Servicing Misconduct & Lack of Transparency No Loan Modification or Forbearance Options Provided : SPS refused to offer an affordable loan modification despite my willingness to work out a payment plan. 

Failure to Properly Disclose Default Interest Rate : The original loan documents do not explicitly state that a 35 % interest rate would be imposed upon default, making this a TILA violation. 

No Proper Escrow Analysis : The escrow portion of my payment remained unchanged, yet the overall payment more than tripled, without justification. 

5. Actions Taken XX/XX/XXXX : Received Notice of Default, stating that my rate had increased from 8.5 % to 35 % due to delinquency. 

XX/XX/XXXX : SPS offered an unaffordable three-month repayment plan with {$18000.00} monthly payments. 

XX/XX/XXXX : Monthly mortgage statement arrived, demanding {$29000.00} with no modification options provided. 

XX/XX/XXXX : I contacted SPS multiple times requesting a reasonable loan modification or interest rate reduction, but I was denied or told foreclosure would proceed if I didnt accept their unreasonable repayment plan. 

7. Supporting Documents Attached Notice of Default Interest Rate Increase ( 35 % ) ( XX/XX/XXXX ) Repayment Plan Terms {$18000.00} Monthly Payments ( XX/XX/XXXX ) XX/XX/XXXX Mortgage Statement {$29000.00} Due Payoff Quote Closing Disclosure & Loan Documents Showing Original Terms

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