Select Portfolio Servicing Responses to Borrowers Class Action

This class action brings suit against Select Portfolio Servicing, Inc. (SPS). The legal concerns relate to provisions of Regulation X and of the Real Estate Settlement Procedures Act (RESPA). RESPA aims to make sure that consumers are provided with better and more timely information about settlements and to protect them from abusive practices; Reg X amends RESPA.

A borrower has a right to submit a “qualified written request” (QWR) to a mortgage servicer, either requesting information or asserting that the borrower’s account is in error, and to receive a timely response to such a letter.

RESPA specifies how quickly a mortgage servicer must acknowledge a QWR and either resolve the issue or provide an explanation of why no resolution is necessary. It also requires that the answer “include the name and telephone number of a representative of the servicer who can provide assistance to the borrower.”

Reg X expanded what servicers owed to borrowers under RESPA. Among other things, it added new categories of inquiries: Requests for Information (RFIs) and Notices of Error (NOEs). It also provides circumstances in which servicers don’t need to provide an answer to an inquiry.

The two plaintiffs in this case are protesting the lack of proper responses to their inquiries.

One of them, George C. Koustis, for example, sent SPS an RFI and two other covered inquiries, including a request for a payoff statement and a request asking about the owner or assignee of his loan. He sent these on May 21, 2020.

SPS did not send him the payoff statement he had requested. The complaint says, “On or about June 26, 202, SPS sent [a letter] to Koustis’s counsel stating that it would not be providing a detailed response to the Koustis Inquiries because his account and the issues presented in the Koustis Inquiries ‘are part of an ongoing litigation[.]’” While SPS did send him a copy of his “Servicing File,” the complaint claims this was incomplete and did not contain all the information requested.

On July 6, 2020, Koustis sent another letter to SPS by certified mail. Again, SPS refused to answer because the issues were “part of an ongoing litigation[.]” Another inquiry produced the same results. Around September 2, 2020, he finally received a payoff statement. In reference to his other inquiries, he received only another “active litigation” letter.

The complaint alleges that SPS is not entitled, under RESPA or Reg X, to refuse to provide an answer because of “ongoing litigation.”

The class for this action is all borrowers in the US (1) who sent SPS a QWR, RFI, NOE, or other covered inquiry, and to whom SPS did not provide a complete response or did not perform an investigation as required on the grounds that the issues are “part of an ongoing litigation.”

Article Type: Lawsuit
Topic: Loans

Most Recent Case Event

Select Portfolio Servicing Responses to Borrowers Complaint

October 26, 2020

This class action brings suit against Select Portfolio Servicing, Inc. (SPS). The legal concerns relate to provisions of Regulation X and of the Real Estate Settlement Procedures Act (RESPA). RESPA aims to make sure that consumers are provided with better and more timely information about settlements and to protect them from abusive practices; Reg X amends RESPA.

Select Portfolio Servicing Responses to Borrowers Complaint

Case Event History

Select Portfolio Servicing Responses to Borrowers Complaint

October 26, 2020

This class action brings suit against Select Portfolio Servicing, Inc. (SPS). The legal concerns relate to provisions of Regulation X and of the Real Estate Settlement Procedures Act (RESPA). RESPA aims to make sure that consumers are provided with better and more timely information about settlements and to protect them from abusive practices; Reg X amends RESPA.

Select Portfolio Servicing Responses to Borrowers Complaint
Tags: RESPA, Servicing Your Mortgage