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SPS Loan Modification – Problems & Solutions

SPS Loan Modification – Problems & Solutions

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Select Portfolio Servicing (SPS) is a residential mortgage servicer that specializes in working with loans that are in default.

If you’re struggling with an SPS loan modification – you are not alone!

Read on to learn how to contact SPS, how to deal with their loss mitigation department and how to apply for a loan modification.

Additional Resources:

Here’s how to prevent a foreclosure if you are behind on your mortgage payments
Here’s what you need to know about any foreclosure notice you may have received

How do I contact Select Portfolio Servicing (SPS)?

Here is how to contact SPS if you are having trouble paying your mortgage:

  • If you haven’t already done so, create your “online portal” so you have access to all the documents SPS issues related to your loan
  • Call SPS Loan Servicing’s loss mitigation department at: 888-349-8960
  • Fax their loss mitigation department at:  801-269-4459
  • Email documents to their loss mitigation department: relationship.manager@spservicing.com (this email address is used for documents only – documents will be received and attached to your account but you will not receive email communication back from SPS)

What do I do if I get a letter saying that SPS is now my mortgage servicer?

SPS might buy the servicing rights of your mortgages in the middle of your loan modification review.

It can be very distressing to be in the middle of your modification review and then receive a “goodbye letter” from your mortgage servicer telling you that SPS is taking over your file.

These are some things you can do to help the service release process go smoothly.

1. Be proactive

Don’t wait for SPS to reach out to you! As soon as you find out that your loan is going to be service released, start tracking your loan with SPS.

Start calling the new lender every 48 hours and ask the the same question each time:

“Has my loan boarded yet?”

You cannot get going on your loan modification again until your loan has populated in SPS’s system so it’s your job to call regularly so you can catch the exact moment when your loan has boarded so you know the exact moment when you should submit your documents again.

If you wait for SPS to contact you, you will be waiting several more weeks.

2. Don’t be fooled by your old lender’s lies!

Assume that no information from the old lender will transfer and be prepared with a brand new loan modification package.

If you were in the middle of a loan modification review with your old lender, don’t believe them when they tell you that everything will fully transfer over. You cannot expect to just pick up where you left off.

You should treat the service release as if you’ve been pushed back to the beginning of the process. Gather your financial documents again and UPDATE EVERYTHING so all your pay stubs and bank statements are recent, within the last 30-60 days.

3. Get the updated application from SPS as soon as you know about your service release

Each lender has a different application form that accompanies your modification request. Even if your loan hasn’t boarded in the new lender’s system yet, you can still request that your new lender send you a blank copy of THEIR loan modification application so you can work on it and get it ready as soon as possible

4. Don’t be afraid to submit your SPS loan modification package even if you don’t have your loan number yet!

You may not have your loan number right when you’re ready to submit your modification package. If your loan modification package is updated and ready to be submitted, don’t let your lack of loan number stop your submission.

Instead of including the loan number on the application, write your social security number on the loan number line instead.

When you finally get your loan number, you can update your documents and re-submit them with your loan number but the benefit will be that your review will already be opened.

SPS’s 5 loss mitigation options to avoid foreclosure

Unless you decide to reinstate your loan (meaning – unless you can pay back all the payments you missed at one time), familiarize yourself with the 5 loss mitigation options offered by SPS.

You have to apply and receive SPS’s approval to move forward with one of these options.

  • Loan Modification: An SPS loan modification is a new loan with new terms that allows you to resume mortgage payments without having to pay everything you owe all at once. Usually, your missed mortgage payments get added to your total principal balance and become due at the maturity date of the loan. It is common for loan modifications to offer reductions in interest rates, extended maturity dates, and sometimes – they lower the monthly mortgage payments.
  • Repayment Plan: A repayment plan is an agreement that allows you to resume your regular mortgage payment and pay an extra amount on top of your mortgage payment until you’ve paid back all your missed payments. Once you have paid everything back, you continue making your regular monthly mortgage payment.
  • Forbearance: A forbearance gives you a temporary break in having to pay your mortgage. Once approved for a forbearance, you are allowed to stop payments for the approved months without the lender taking foreclosure action against you.
  • Short Sale: A short sale allows you to sell an underwater property for less than what is owed on the mortgage. Your mortgage lender approves the sale and then typically waives the deficiency balance (the remaining amount owed) so you can sell your home and move on without owing the remaining balance.
  • Deed in Lieu of Foreclosure: A deed in lieu of foreclosure is an agreement between yourself and your mortgage lender where you sign a document giving the house back to the bank in exchange for the bank agreeing not to foreclose on you.

What documents are required in SPS’s loan modification application?

To apply for a mortgage modification, you will be required to submit a “complete loss mitigation package.” This is basically the lender’s application form plus all of the required financial documents that they require.

The documents include:

Here’s what you need to know about each of the loan modification documents

SPS’s options for transitioning off of a forbearance plan

If you went on a COVID-19 Forbearance Plan with SPS, you may have additional options to transition back to normal payments:

  • If you have a qualifying investor backing your mortgage (FHA, VA, USDA, Fannie Mae, Freddie Mac) and;
  • You took a COVID-19 forbearance plan as a result of financial hardship caused by the pandemic and;
  • You were current on your mortgage prior to March 1, 2020

You should be able to transition off of your forbearance plan using:

  • A payment deferral – where SPS puts the missed payments on to the end of your loan to help you resume regular monthly payments
  • A partial claim – where SPS creates a subordinate lien containing the lump sum of payments you missed which becomes due at the maturity date of your loan

Tips for communicating with SPS

Unlike other mortgage servicers, SPS has enough customer service representatives to handle high call volumes so you won’t be on hold very long.

Once you get a person, that person will have access to the file notes and will be able to give you information.

Your job is to make sure you ask the right questions and utilize all the available tools they provide to make sure you stay on top of what’s going on with your loss mitigation review.

Always ask them the most recent date someone made a note on your file

When you call to get an update on your file, you can expect the customer service representatives to tell you that your file is “in process” or “in review.”

When they say this, ask them to tell you the “date the most recent note was made on your file.”

By getting them to tell you the date of the most recent update, you can ensure that your file is moving forward. SPS is known for letting files sit without movement for longer than 7 business days.

By getting the customer service representatives to tell you the date the last time someone touched your file, you’ll be able to track your file’s progress and feel good about what’s going on. If more than 10 business days have passed with no note made on your file, escalate the matter to a supervisor.

Use SPS’ escalation procedures and ask for a supervisor at the first sign of a problem

SPS representatives are able to connect you with a supervisor, if needed. Their supervisors have a good amount of authority to get a file moving forward.

Below are some common situations where asking for a supervisor would be helpful:

  • Your file has not had a recent note made on it in over 10 business days
  • It has been 30-days or more following your last Trial Payment and you have not received your final loan modification documents yet
  • The same document(s) is being requested over and over again, despite you sending it in
  • They are not understanding something unique about your file or your income situation that is causing a delay

To get to a supervisor, tell the customer service representative that you want to speak with a supervisor to open an escalation.

Refuse to be transferred to a Voicemail and make clear that you’re willing to wait on hold as long as it takes.

Be patient with their phone tree – the last option is the option that gets you to a live person

SPS has a long phone tree verification process. When you call them, you need to have your loan number, zip code and last four of your social security number ready to enter.

Once you make it through this process, an automated person will start listing different options to route you to where you need to go.

If you’re calling to get an update on your loan modification review, you need to speak to a customer service representative in the loss mitigation department.

SPS’ phone tree offers this option but it is the 9th or 10th option they give. Some homeowners get frustrated and hang up because it takes so long to get to this option – but don’t hang up!

Just sit patiently through all the other options (they do this on purpose to get you to hang up) and at the very end, they will offer you an option to speak to a person.

Lastly, the number they want you to press to speak to a person is not in order and it changes.

For example, they will say “press 1 to order a payoff, press 2 to speak to an insurance representative etc. etc.”

It seems logical that when you make it to the end, speaking to a person will happen when you press the next number in the sequence. But! They often make it more complicated than that so listen very carefully to what number they want you to press to talk to a person.

It is often not the number you would expect it to be.

SPS’ representatives can email you but you have to specifically request that they do this

If SPS is telling you that documents have been generated on your account but they haven’t been mailed to you yet (or you didn’t get them for some reason), you can request that they email you a copy.

The representatives won’t offer this and they may push back on it a little bit, but they are able to email you the documents so it’s your job to continue to ask them to email them until they do.

(If you have access to your online portal, the documents will usually be available for you there as well. The representatives will try to direct you to your portal instead of emailing you. If it’s easy for you to access the portal, do that but if it’s not – push back on the representatives until they agree to email them to you).

SPS has a long lag time in between when documents are generated and when they are mailed

SPS has a hard time mailing documents to borrowers as soon as the documents are ready. Sometimes, you will receive a document from SPS that is dated 2-3 weeks prior.

This can be very stressful because some documents have deadlines for action and sometimes, SPS will mail your documents after the deadline in the document has passed.

If you receive a document that has a deadline in it that has already passed, call SPS immediately and instruct the customer service representative to make a note attached to your file stating that you just received the documents.

Tell the representative to have your note state the date you received the document and that you’re working to execute the document as soon as possible. Don’t just let the customer service representative say “okay” after you ask them to make a note.

Make them read the note they’re writing back to you to ensure all the information is included in the note.

The note should read something like this:

“Borrower received documents that were dated 12/10 on 12/29. The lag time between the date and the mail time was caused by SPS. Borrower is working on executing them as soon as possible.”

If you’re in the middle of your review, prevent document lag time issues by calling regularly for updates

To prevent issues with their mailing system, call SPS every 48 hours to get an update on your file. If you’re at the phase in your loss mitigation review where you believe documents are coming, ask this question every time you call:

“Have the documents been generated on my file yet?”

If the answer is yes, ask them if the documents have been mailed. If they tell you that the documents have been generated but have NOT been mailed, you can make a request to have the documents emailed to you.

The customer service representative will put in a request to have the documents emailed to you within 48 hours. In 48 hours, you should receive your emailed copy. If 48 hours have passed, call them back and stay on the line until you get to a supervisor who can email you a copy.

Having an active online portal can also prevent SPS’s document lag time problem. Documents often get attached in your online portal before they get mailed so make sure you’re checking your online portal regularly.

SPS success story

I took on a client who 60-days away from a foreclosure auction date.

She had not been able to make it through SPS’ loan modification review process on her own. SPS continued to deny her modification attempts citing an “incomplete package” but it was never made clear to the borrower what was incomplete.

I was able to escalate the matter to SPS’ supervisory team. We learned that the issue was actually caused on the back-end (meaning – not anything my client could have fixed). SPS was not able to get a Title Report pulled from their own Title department in time. This issue kept causing the file to be declined and the generic letter they mailed out did not make this clear (and in fact blamed the borrower for not submitting a complete package!).

We were able to get the foreclosure auction date postponed by showing proof to the foreclosure trustee that SPS was wrongfully denying my client from completing her modification review.

We pulled our own title report and provided it to SPS to speed the process up. My client ended up approved for a modification and all foreclosure activity was canceled.

Mortgage relief options for Washington homeowners

Mortgage issues are complex. Banks and mortgage servicers can be very uncooperative. If you think you might need some help, you have some good options. Here are two articles to help you understand the help that is available to you.

What to Look For In a Loan Modification Attorney
What Can a Foreclosure Attorney Do For You

Next steps

It’s great that you are reading about SPS’s loss mitigation options. If you are a Washington State homeowner, the next step would be to schedule a free, mortgage relief consultation with me.

Please give me a call today at (425) 654-1674 to discuss your situation.

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