Kelly Guzzo, PLC recently filed a class action case against Specialized Loan Servicing, LLC (SLS) related to the unlawful assessment and attempted collection of amounts on second mortgages. Several years prior, the plaintiffs’ previous second mortgage owner and servicer charged the amount off. As a result, the company ceased charging fees and interest on the account, as required by federal law, and stopped sending monthly statements. Almost a decade later, SLS acquired the servicing rights to the plaintiffs’ second mortgage and, in alleged violation of federal and state law, retroactively assessed fees and interest on the accounts for the period during which the prior owner and servicer waived any right to those amounts because of the failure to send monthly statements.
As a result of these unlawful charges and SLS’s attempts to collect the same, the plaintiffs allege that SLS violated § 1692e of the Fair Debt Collection Practices Act (“FDCPA”). In particular, the plaintiffs allege that SLS’s retroactive assessment and attempted collection of interest on second mortgages that have been charged off violates the FDCPA’s prohibition on the use of false, deceptive, or misleading communications regarding the “character, amount, or legal status of any debt.” In this specific instance, SLS unlawfully assessed and attempted to collect amounts totaling more than $70,000.00. Such conduct either reduces equity in borrowers’ homes or causes the repayment of improper amounts to SLS.
After the filing of the lawsuit, SLS sought to dismiss the case or to prohibit it from moving forward as a class action. On January 4, 2024, the United States District Court for the Eastern District of Virginia denied SLS’s motions. This means that the case will proceed as a potential class action against SLS for its unlawful assessment and attempted collection of amounts on second mortgages. If your prior mortgage was charged off or you stopped receiving statements, you may be a member of the class.
If you have had retroactive interest assessed on your mortgage, please contact us if you have any questions about your rights. Kelly Guzzo continues to investigate and litigate similar matters by SLS and other servicers. If you stopped receiving monthly statements and then had the rug pulled out from under you, we will review your situation for free to determine whether the loan charges are valid. There are no out-of-pocket costs for this consultation.
