Specialized Loan Servicing Facing Class Action Over Mortgage Applications

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Santa Clara, CA: A unfair business practices class action lawsuit has been filed against Specialized Loan Servicing (SLS) alleging the finance company improperly processed loan modification applications for customers in California that often led to over-payments on the loan and unjust foreclosures of the borrower's home.

To stem the tide of defaults and foreclosures after the Great Recession of 2007 and 2008, the U.S. Consumer Financial Protection Bureau (CFPB) implemented a series of guidelines designed to force banks and mortgage servicers to process loan modification requests quickly, accurately, and transparently. The guidelines went into effect in January 2014 and give homeowners the right to sue mortgage servicers who violate them.

This class action lawsuit alleges that SLS violated the U.S. Consumer Financial Protection Bureau's new guidelines and failed to bring its system for processing loan modification applications into compliance. Specifically, the lawsuit alleges that SLS, among other things:

(1) Failed to timely respond to loan modification applications;

(2) Failed to inform borrowers what information was missing in order to process their loan modification application;

(3) Falsely told borrowers their application was missing information that had already been provided on numerous occasions;

(4) Denied borrowers' loan modification requests without an appropriate explanation; and v (5) Wrongfully threated foreclosure while a borrower's application was still under review.

Margarette Smith, an 88-year old homeowner and the named plaintiff in the lawsuit, experienced all of the above behavior as she attempted to comply with the requirements set forth by SLS in numerous letters each month. Despite providing SLS with all the paperwork requested, often several times, Ms. Smith was still denied a proper loan modification. Consequently, the inability to modify her mortgage means Ms. Smith may lose her home.

The lawsuit seeks to represent homeowners nationwide who have applied for a home loan modification with SLS since January 2014 and were denied a modification, or believe their application was processed improperly.

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Reader Comments

Posted by
Catherine Roby
I believe my loan modification has been improperly processed, and it took too long. My loan modification pack states my balance is $48,056.22. The loan modification pack farther states my new Principal will be $50,952.35; my new monthly payment is $448.89 for 383 months, with a final Balloon payment in the amount of $24,284.20, in the year of "2049", grand total $196,209.07. This doesn't seam logical.

Please help me.

Posted by
Teri Sojka
OMG, THIS IS FRIGHTENING, ITS LIKE READING MY OWN STORY SOMETIMES, I AM WORKING WITH MY LOCAL STATE ATTORNEY GENERALS OFFICE, Seriously I have been fighting them for 5-6 YEARS FOLKS I kid you not, I have been in and out of FORECLOSURE 2-3 times every time they say the F-WORD I fight harder, and then they all of a sudden reconsider things!!!!!! I am so MAD, I am so tired of fighting I honestly don't even care about the house any more, BUT ITS THE PRINCIPAL OF THE MATTER NOW. I WILL FIGHT THEM TILL I DIE THERE OR. TILL THEY PROVE ME WRONG! They are such crooks and they are robbing innocent people from there homes!

Posted by
Megalina bloom
Since my husband got the loan in 2007 the loan servicing CO. Has changed 16 x. I have been paying my husband's mortgage while he has unfairly been incarcerated out of state. I learned to run our saw mill to earn income. Some parts needed repairs and I was told it would take 3 months to get my mill back up and running. As soon as I found this out I called ocwen to make arrangements ahead of time. I asked if payment could be delayed just 3 months then on the 4th 5th & 6th mo ID pay double. The rep asked if the current month was paid (don't they have this in front of them on the computer) I answered yes on time like always! So the rep tells me there is no kind of arrangement that you can make while the account is in good standing. I said I would like to set this up so I don't incurre late fees because I'm telling you ahead of time I don't feel I should be penalized if I'm arranging this delay of payment. The rep said oh no we can't waive the late fees. So I said I can't arrange to delay payments nor have late fees waived because I paid up to date? The rep said that is correct. Anything else I can help you with. I was shocked! I replied anything else? You haven't helped me with this issue why would I move on to any other issues? So the next month I go to pay and discover 3k has been taken out of husband's bank account by the IRS for presumed taxes owed for two yrs because of the mortgage being paid they assume he had been earning an income but did not file his taxes. He didn't file because he can't while incarcerated and he hasn't earned any income so I didn't think I had to file when no income was earned. I was livid! The mortgage is overdue the next time I call ocwen and again I'm given the run around and not able to set up a planned delay of payment. On month 4 I go online to make a large payment thru the website how I usually paid. I'm prohibited from making any payment at all!!! So I wire transfered from the bank account 6000 one week then 2147 the next week. The amount overdue was 15k at this time and I just sent them close to 9k.
They sent back the payments in check form!!! Stating only the full amount overdue would be accepted. I could have had this paid up current by the following month had they accepted payment! So I call ocwen and told them I didn't have the full amount right now what can I do. This rep mentions filling out an application for loan modification the other times I called this was never mentioned. When I get this huge package of like 30 pages the first 6 are information pages they legally have to send you. I wonder if any of the people they have answering the phones have ever read these pages? It lists options for homeowners if in financial difficulty what they can do. One option is called forebarence where payments are delayed then doubled until current and the home owner does not have to send in the modification application to make this arrangement it says. Now this was exactly what I had asked to do in the beginning! So I called ocwen back and the rep says no we can't do that now you have to fill out modification. Application and sends me out another package! One of the required documents that must be turned in with the application is the last 3 years tax records. For 2,1/2 yrs my husband did not earn income so I did not file this will need our tax attorney to straighten out. I called and asked if I could get time to do this. I'm told sure no problem. The next week I get notice my house is up for auction. This has been a nightmare when it simplely could have been handled differently

Posted by
One reason is unless you scan or upload all faxes go threw a 3rd in India i know i use to work for them

Posted by
SLS denied all options.

Posted by
Clarissa Crader
Where do i even start??!! Ive been sending paperwork back allllllll year! Yes, all year, sending and resending the same info. Always down to 1 or 3 last documents needed so ive now been faxing and faxing. Told not to send in payments because back payments will be put on the end of the loan. Sent a social security form 3 times. And the rep still told me today thatvshe didnt have it,after telling me last month that they did. I cant get my tax returns (preparers went outbof business) but then i remembered, i signed 2 forms for them to get their own copies. Today i find out they need the social security statement again and oh, im in FORECLOSURE

Posted by
Robert Johnson
I am Robert Johnson I am getting ripped off by Specialized Loan Services, in several ways not just in the modification process. SLS really does have to be stopped. One question when I get involved in this lawsuit can I stopped making payments to SLS. I already did. so they are going to try to foreclose again, any suggestions I must act quick.

Posted by
evelyn smith
I have been trying for months to do a loan modification on my mortgage with SLS and I have not been able to get in contact with them I have called several times I have been getting the run around for months I have been sending in the documents since July 2016 trying to modify my home loan with no success I have been getting the run around for months I have called several times to speak the person that is over my mortgage I never receive a called back from the person. Last month I received a foreclosure letter saying that my property will be auctioned off on December 6,2016 I called trying to do a deed in lieu of a foreclosure since they do not want to help me modify my home I was trying to avoid a foreclosure so I called in on last month trying to give them the deed to the house to avoid a foreclosure it took me a few days of calling before someone answer the phone and the person that I spoke to told me that it would be better for me to try to do a short sale on the house. They need for me to resend some paperwork so that is what I did but when I called to confirm that they receive my I would be put on hold and sometimes the phone would drop, I would call back only to be put on hold again. I know that SLS is trying to force me into a foreclosure, I have been trying to work with SLS but haven't gotten anywhere with them. They are trying to force me into a foreclosure even when I am trying to do everything I can to work with them about the house. I receive a letter yesterday stated that they would not help me and that because the sell date for my house is less than 38 days then there is nothing that the date that they receive my request for help then they are unable to cancel the sale of the house and they can not help me with my foreclosure prevention option. I since my request for help six months ago with and SLS has refused to help me and they are forcing me out on the streets. I email them with the paperwork, I have faxed them with the paperwork and they would tell me that the fax machine was not working. I took the advice of on the person that I talked to someone on last month and they advise me to do a short sale instead on a deed in lieu of a foreclosure and I found a real estate agent that Specializes in short sales and she has the house listed and I have multiple offers on the house but SLS is being very difficult about doing that . I have recorded conversation one where I called and spoke to someone about the letter that I received telling me that SLS was not going to help me because my sales date is less than 38 days I spoke to someone there and she was telling me that I did not have a sales date and that the later was not what it said when that is exactly what is on the paper said. SLS is forcing me until a forclosed after I have tried for months to modify my home loan I know that I have sent all the documents for the modification, I called but the person and signed to my loan was never there and never returned my phone calls. I was told that I need to resent documents only to resend them and to be told that I sent the wrong documents are to be told that they never received the document that is why I started to email my documents instead of faxing them. I have been getting the run around and being lied to about my loan when they are supposed to help people in my situation. I knew that they were not trying to help me now I have in writing. This company should not be in business when they are forcing people out of their homes and refusing to help them. My foreclosure date is for December 6, 2016 is there anyone that can help me.

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