Specialized Loan Servicing Facing Class Action Lawsuit

Posted by Patrick Barnard on October 17, 2016 No Comments
Categories : Mortgage Servicing

A class action lawsuit filed on Oct. 7 alleges that mortgage servicer Specialized Loan Servicing (SLS) improperly processed loan modification applications for customers in California that often led to overpayments on the loans and unjust foreclosures of the borrowers’ homes.

The suit alleges that SLS violated the Consumer Financial Protection Bureau’s new mortgage servicing guidelines and failed to bring its system for processing loan modification applications into compliance.

Specifically, the lawsuit alleges that SLS, among other things, failed to timely respond to loan modification applications; failed to inform borrowers what information was missing in order to process their loan modification applications; and falsely told borrowers their applications were missing information that had already been provided on numerous occasions.

In addition, SLS is accused of denying borrowers’ loan modification requests without an appropriate explanation and wrongfully threatening foreclosure while a borrower’s application was still under review.

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