Specialized Loan Servicing LLC: A Case of Deceptive Mortgage Servicing Practices

The latest class action lawsuit to hit the United States District Court for the Central District of California highlights the deceptive practices of Specialized Loan Servicing LLC (SLS) in the mortgage servicing industry. Filed by plaintiff Michael Donabedian on January 24, 2024, the lawsuit alleges that SLS violated various federal laws, including the Real Estate Settlement Procedures Act (RESPA), Truth in Lending Act (TILA), Fair Debt Collection Practices Act (FDCPA), and Consumer Financial Protection Act (CFPA). The suit seeks compensation for damages, restitution, injunctive relief, attorneys' fees, costs, and other appropriate equitable relief.

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Background

Specialized Loan Servicing LLC is a mortgage servicing company that is responsible for managing and collecting payments on behalf of mortgage lenders. As a servicer, SLS has a fiduciary duty to act in the best interests of both the lender and the borrower. However, the lawsuit alleges that SLS has failed to uphold this duty and has instead engaged in deceptive practices that harm consumers.

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Deceptive Practices

The complaint alleges that SLS has engaged in several deceptive practices related to mortgage servicing. These include:

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1. Charging Unlawful Fees: SLS has allegedly charged borrowers unlawful fees, including late fees, property inspection fees, and other miscellaneous fees. These fees are often inflated and not authorized by the mortgage agreement.

2. Failing to Provide Accurate Account Statements: SLS has allegedly failed to provide borrowers with accurate account statements, making it difficult for them to determine the true balance of their loans. This lack of transparency has led to confusion and financial harm for borrowers.

3. Misrepresenting Loan Balances: The lawsuit alleges that SLS has misrepresented loan balances, leading borrowers to believe that they owe more than they actually do. This has resulted in borrowers making unnecessary payments and suffering financial harm.

4. Abusive Debt Collection Tactics: SLS has allegedly used abusive debt collection tactics, including harassing phone calls, threatening letters, and false representations about the status of the loan. These tactics have caused emotional distress and financial harm for borrowers.

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Impact on Consumers

The deceptive practices allegedly engaged in by SLS have caused significant financial harm to consumers. Borrowers have been forced to pay unlawful fees, make unnecessary payments, and suffer damage to their credit scores. The lawsuit seeks to hold SLS accountable for these practices and provide relief to affected borrowers.

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Conclusion

The case against Specialized Loan Servicing LLC highlights the need for greater accountability in the mortgage servicing industry. Deceptive practices that harm consumers have no place in our financial system, and it is our hope that this lawsuit will serve as a deterrent to other companies that engage in similar practices.

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If you have been affected by SLS's deceptive practices or know someone who has, we encourage you to file a claim with us. You may be entitled to compensation for damages, restitution, and other equitable relief. Don't hesitate to seek justice and hold SLS accountable for their actions.

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