Class Action Lawsuits Against Specialized Loan Servicing (SLS)
Representing Homeowners Nationwide
Specialized Loan Servicing LLC (SLS), based in Greenwood Village, Colorado, has come under increasing legal scrutiny in recent years for alleged abusive mortgage servicing practices. Multiple class action lawsuits have been filed against the company, accusing it of engaging in deceptive and unfair practices that have financially harmed homeowners across the country. If you believe SLS has mishandled your loan, charged unlawful fees, or taken improper foreclosure actions, you may be entitled to relief through individual legal action or by participating in a class action lawsuit.
At Louis S. Schwartz, Attorneys at Law (ConsumerLawPA), we represent homeowners who have been misled, overcharged, or mistreated by mortgage servicers like SLS. We are actively reviewing claims and helping consumers understand their rights and potential legal remedies.
Unlawful fees and payment charges
One of the primary allegations raised in lawsuits against Specialized Loan Servicing involves the assessment of illegal or excessive fees. Specifically, plaintiffs have challenged what are known as “Pay-to-Pay” fees, extra charges imposed on borrowers who make their mortgage payments over the phone or online. These fees are alleged to be far higher than the actual cost of processing the payments, violating both federal and state consumer protection laws.
Other borrowers have reported being hit with improper late fees or foreclosure-related charges, even when they were actively working with SLS on loan modifications or had submitted timely payments. These fees can add hundreds or even thousands of dollars to a homeowner’s balance and often lead to further delinquency, default, or foreclosure.
At ConsumerLawPA, we believe servicers should be held accountable for charging homeowners more than what is fair or lawful. If you paid convenience fees, late fees, or unexplained charges to SLS, you may be eligible to join a class action or pursue your own individual claim.
Wrongful foreclosure and loss mitigation failures
SLS has also faced legal action related to foreclosure practices. Some lawsuits allege that the company initiated foreclosure proceedings despite homeowners being in active loss mitigation discussions, or in violation of protections granted under the CARES Act and other federal regulations. In some cases, SLS is accused of misleading borrowers about their loan status or denying modification applications without proper review.
In 2020, the Consumer Financial Protection Bureau (CFPB) issued a consent order against SLS, finding that the company failed to provide accurate information to borrowers, improperly charged fees, and mishandled foreclosure processes. The order required SLS to pay financial penalties and restitution to affected borrowers and to implement improved compliance procedures.
If you experienced a wrongful foreclosure, received inconsistent or false information about your options, or were denied a loan modification without explanation, you are not alone. Our firm can help determine whether your rights were violated and whether you qualify for compensation.
Credit reporting misconduct
Accurate credit reporting is critical to every consumer’s financial wellbeing, and SLS has faced lawsuits for allegedly mishandling consumer credit data. In one notable case, SLS was accused of failing to report a debt dispute on a borrower’s credit report, a violation of the Fair Credit Reporting Act (FCRA).
Another case involved SLS linking a borrower’s social security number to someone else’s bankruptcy filing. As a result, the borrower was falsely flagged as having declared bankruptcy and was unable to refinance their loan, despite having a strong credit history.
These kinds of reporting errors can have serious, long-term effects such as blocking access to credit, increasing interest rates, and damaging reputations. If SLS reported inaccurate information about you to the credit bureaus or failed to update or correct information following a dispute, you may have grounds for legal action.
Lender-placed insurance (LPI) abuses
Lender-placed insurance is coverage a mortgage servicer buys on your behalf when it believes your homeowner’s insurance has lapsed or is insufficient. While LPI is legal under certain conditions, it must be reasonably priced and necessary. In 2019, a settlement was reached in a case where SLS was accused of force-placing insurance policies that were duplicative, excessively expensive, or procured through arrangements that benefited the servicer rather than the borrower.
Improper use of LPI can dramatically increase your monthly mortgage payment, push you into default, and create confusion over your coverage. If you were forced to pay for insurance you didn’t need, or if you were unaware that LPI had been added to your loan, you may be entitled to compensation or a refund.
How to know if you have a claim against SLS
If you are or were a customer of Specialized Loan Servicing and have experienced:
- Surprise fees or unexplained charges
- Denied or delayed loan modifications
- Foreclosure actions despite ongoing discussions
- Inaccurate credit reporting
- Forced placement of unnecessary insurance
You may be eligible to join a class action lawsuit or file your own claim. Some settlements have already been reached, including the CFPB’s 2020 consent order and earlier LPI settlements, but new investigations and lawsuits are ongoing.
Louis S. Schwartz, Attorneys at Law, can help you review your account history, analyze your legal options, and determine whether your situation qualifies for compensation. We represent homeowners and borrowers nationwide and are committed to holding servicers like SLS accountable for unlawful and deceptive practices.
Contact us today for a free consultation
At ConsumerLawPA, we believe mortgage servicers should follow the law, treat consumers fairly, and provide honest, transparent service. When they fail to do so, we are here to help you fight back.
If you believe you were harmed by Specialized Loan Servicing, contact us today to schedule a free and confidential consultation. We will listen to your story, review the facts, and help you understand what steps to take next. You may have more power than you think, and we are here to help you use it.
