GMAC Mortgage Dumps Tens of Thousands of Home Equity Loans: Sells to Abysmal ‘Specialized Loan Servicing’
The Mortgage Insider
Financially troubled GMAC Mortgage this fall sold tens of thousands of prime home equity loans to a company rated so poorly, it is considered by some experts to be among the worst mortgage servicers in the nation.
Specialized Loan Servicing of Colorado, in just a few years, has racked up a stunning number of complaints against it. The Mortgage Insider found the complaints among the worst that he has ever seen levied against a mortgage servicing provider.
Known more for its servicing of loans sold off by the original mortgage holder, SLS has amassed hundreds of complaints with the Better Business Bureau, online, and on online communities discussing mortgage providers.
Based on a survey of complaints reviewed online, SLS seems to have attracted a number of sub-prime mortgage accounts and those forced to undertake loan modifications in this difficult economy. Calls to SLS customer service routinely include a notification the company is “attempting to collect a debt” and any information gleaned from that call may be used as part of that process.
For prime GMAC Mortgage home equity loan holders with stellar credit scores and perfect payment records, the sudden sell-off of their loans has come as quite a shock.
They were further disheartened when they called SLS to inquire about the transfer and were introduced to the SLS way of doing business.
Jamie writes, “I am not sure why it was sold because we are good customers with outstanding credit and have always made our payment on time. I called SLS today and they would not give me any account information to make a payment! I told the woman I wanted to make a payment over the phone but she was unwilling to even process a payment. I can’t even access their website and my payment is supposed to be due in a few days. The woman I spoke with was rude and unhelpful. Apparently they treat new customers like this. I am not looking forward to working with this company.”
Jamie’s experience is not atypical. We found hundreds of complaints about rude and obnoxious customer service representatives who were either undertrained or presumed your problems were just an excuse to not pay them their money. Long hold times, customers hung up on, and promised outcomes from calls that never materialized were all-too-easy to find.
Some GMAC Mortgage customers had their home equity credit lines frozen after the transfer for “delinquent loan-access termination,” despite never making a late payment and maintaining a FICO credit score of 800 or more.
One customer received someone else’s loan documents in the mail, chock full of personal information that would represent a goldmine for an identity thief.
We contacted SLS Loan Servicing and were surprised to discover the company requires online payments be made through Western Union. Customers accustomed to making regular monthly online payments through the GMAC Mortgage website will be unhappy to learn SLS requires them to use Western Union SpeedPay to make a payment, with a “convenience fee” of $9.95 for each payment. Making a payment by phone, convenient for SLS who is assured of getting their money, will be very inconvenient for you — it carries a $9.95 “convenience fee” as well. You can also wire them the money.
The only way to make a payment without incurring a charge each time you make a payment is to mail a paper check or go through the tedious process of establishing a direct debit with your checking account, which in some cases will also incur bank fees. Of course, a pre-configured direct debit payment program does not provide the flexibility to make payments in different amounts to pay off your loan more rapidly, as GMAC Mortgage allowed.
Customers are concerned. A company with an established reputation of mishandling accounts can risk the good credit standing of its customers, and if the SLS horror stories continue, formerly prime credit customers may join their sub-prime brethren courtesy of the damage a poor loan servicer can wreak on an individual’s credit score.
Unfortunately, short of refinancing your mortgage or paying off the home equity balance and closing the account, consumers have no recourse or ability to opt-out from the sale. Stringent oversight by appropriate state and federal agencies to ensure quality service is about the only protection consumers have from sudden sell-offs of their mortgage accounts.
We, too, are one of the apparently tens if thousands of customers this has happened to. It’s too early to tell how things in the service department will go. I did speak to a rather friendly CSA after an exasperating hold time, but for whatever reason, the first payment coupon supposedly mailed within 7 business days of the “welcome letter” has yet to arrive 13 days later. We assumed the sell off was because we refinanced our primary previously held by GMAC. We aren’t concerned about the HELOC being frozen because it was a second line used in a purchase split to elimate PMI in the first place and we’ve never accessed it. However the reason “delinquent loan access termination” has a very bad connotation indeed. We have never been “delinquent”. After seeing so many complaints about SLS, I’ve decided to do some intense research, but I’ll be curious to see what others have to say as well.
The sad thing is, for those of us who are prime borrowers, there isn’t a bank, credit union or mortgage lender alive that will touch a second mortgage these days – high credit score or not. (at least not that I have found) That tells me a good number of good people may be in for a long road to hoe where this deal is concerned. One question I do have is does it look bad for an individual to have their mortgage serviced through a debt collector? One would think so…
I was also notified of a sale of my mortgage to SLS. Like many other GMAC mortgage holders, I have never missed a payment and my credit score is stellar. I haven’t tried to contact SLS to set up an online account yet (today is Saturday, and, big surprise, they’re not open), but I am very worried by the reviews I have read online. Even worse, my letter of notification from GMAC lists my new account number with SLS as #0000000000. That’s not going to be very helpful. I have 23 days to get a payment in their hands. I am sure glad I started looking into this immediately after receiving the notification…it seems like I might need every one of those days to get everything straightened out. Best of luck to the rest of GMAC’s loan holders affected by this sale!
Good News! I just spoke with an SLS representative on the phone. It turns out that, while everything in their written materials says there is a $9.95 charge for paying online, their system will actually let you do it without any fee. I just tried it, and it does work. I realize that’s a small consolation, since this process should be free anyway, but at least they don’t seem as bad as I had originally feared. I don’t know if the fee-free policy will last, or if it’s just temporary while they move people away from GMAC.
Yes, I ran into the same thing you did Justin, after I talked with a rep about setting up an auto-debit from my checking account. The rep was friendly enough and did indicate the $9.95 fee was waived for online and phone payments within a certain timeframe (basically a few days before and after the due date — considerably late payments don’t get the waiver). I explained that nowhere on the website was this information available, to which she responded, “I hate that.”
Online and phone payments should ALWAYS be free of charge for customers, and in fact cost less for most companies to process and gets them the money faster. But paying for the “convenience” is a way to further monetize the entire business relationship, and leaves a bad taste in my mouth.
Be Careful about the no fee. The no fee rule is only on certain days and depending on who you ask, you will get different answers. Please file complaints about this company and insist of the transfer of your loan. When enough people scream, someone will listen.
I also had a HELLO letter as GMAC sold my mortgage to SLS. It has not even been 12 days since this loan company has owned this mortgage and they are trying to charge me late penalty fees, higher interest, and report my delinquency to the credit bureaus! THIS COMPANY IS A FRADULENT COMPANY THAT IS TRYING TO SCAM HONEST PEOPLE. Anyone who has their mortgage sold, or transferred has 60 days to not be considered late but not with SLS!!!! By the way, SLS is just a servicing company they do not own my mortgage, therefore they are like the middle man and they think they can get away with anything they want including taking a bigger piece of the pie such as increasing my interest rate, charging me a 5% penalty fee and reporting me to the credit bureaus be cause I was 10 days late on a loan that transferred 11 days ago. Good luck with your future endeavors SLS!!!!!!
You are correct that they cannot charge you late fees or make derogatory reports to your credit within the first 60 days of your “welcome/hello letter” they mailed you, but they might try because of a “mistake.”
GMAC Mortgage mistakenly indicated my October payment was on schedule to be withdrawn from my checking by them, but that wasn’t true and it was one of the questions I got answered when I called SLS several weeks ago. I had to make immediate payment arrangements through SLS myself.
I have an auto-debit set up with them now, and I’m waiting to see if they mess that up.
Just found out today that SLS messed up my auto payment. Got my loan transfeered from GMAC to SLS in two months ago and made a quick payment to avoid the 5% late charge and 14% interest rate hike. Received a letter stating I was deleiquent and being reported to the credit agencies. When I called they said it was a mistake. I pulled my credit report and no mistake!!!! It shows that I have never made a payment???? I have made 4 payments. When I called SLS they said it was a mistake and sorry. They wanted to know if I wanted to pay by phone for $10, even though I am paid up thru Januray. What a scam.
If there are black marks on your credit report, stop at nothing to have them removed immediately. You -must- get any erroneous information removed from your report by them. Putting a protest note on record won’t cut it with creditors.
I’ll try and see if I can find the executive office number for you to call. Bypass the customer service people altogether.
@Mike – I’d love to scream outloud about it and request a transfer of a our loan, but I don’t see any alternative except to either pay the remainder in full or try to refi it (an non-existent option on seconds these days).
@Kevin – I’m not sure how your transfer went, but we certainly haven’t been impressed. Though our interest rate remains the same, we received not ONE single correspondence after the hello letter, though that one plainly stated we would receive a payment invoice within 15 days. When I finally got a hold of someone to ask where it was, they claimed it would all arrive on the next statement generating at the end of the month. Then proceeded to ask if I knew when I would be making that first payment. Um, hello? I was waiting on the statement that said what I owed you. The one you haven’t sent. The one that I’m still waiting for. We’ll have to wait and see if a late fee is charged.
I really wish there was some recourse to this…it seems like a shady deal and I fear a lot of otherwise honest, good-faith, credit-worthy individuals may get screwed in the end.
Good luck Jen, Mike, Kevin, and all dealing with SLS!!! They probably will not send you that statement as promised and then hit you with a 5% late fee, that’s how they work. They are scam artists that don’t necessarily want you to default, but they want you to be late or be forced into having to pay by phone and or internet. And don’t be alarmed if you do see you interest rate go up, that’s just SLS trying to modify the current terms of your loan. It’s illegal and immoral. Make sure your file the correct paperwork with the BBB, FTC, and all of the necessary courts. I have been with Specialized Loan Servicing for several months now and everything you read on the internet, all of the complaints are true. Keep tract of all correspondences and have a nice paper trail because you will need it when you have your day in court. If I had to do it over again I would have never given this company one cent.
GMAC had been giving me 14 days grace period for 3 years to pay my10% loan – guess what, a soon as SLS took overthe loan, they declared me late on a whole bunch of payments even though that is what GMAC agreed with me to do in exchange for me paying direct from my checking acct – worse, GMAC sent me a letter stating that this service WOULD be transferred – it was not! I got hosed!
Then, SLS declares me in pre-foreclosure and in addition to the fees for late payments to GMAC which GMAC still says was timely, SLS orders a home inspection and charges me $10.35 more on top of all this!
this is insane – never trust GMC or Specialized Loan Serving LLC. it’s like GMAC got into financial trouble so it sold ff all its 10% equity loans in Virginia to a bunch of GANGSTERS – i.e., Specialized Loan Serving, LLC.
I called SLS aout this and they just said – check your note, its all there – well I did chek my note and no property inspection fee is listed – and no right of subsequent purchaser of the mortgage exists to collect late fees which arguably the previous mortgage owner could demand either.
This is insane! We need a class action lawsuit or FTC intervention NOW!!!!
Good luck with the class sction lawsuit or FTC intervention……SLS is just as corrupt as the Government!!!! SLS screwed me too, besides the fees, and the interest hikes, they kicked me out of my house. They came to my house with a locksmith and changed my locks. I have a 4 month old. Gm just transferred my loan 3 months ago. We have not missed a payment. They said its because I never provided them with my updated insurance info or my social security #.
The government is requiring GMAC to bring in more capital. So what if they took good loans prepared accounting entries to make the loan (loan number) disappear from their accounting records, appearing that the loan was sold, transferred, or assumed, moved the asset to GMAC Trust and hired a questionable firm like SLS to service the loan. Could they hide the true nature of the asset in the GMAC Trust and disguise the liability and make it look like they raised capital, when they in fact did not? If they did something like this, would it be to mislead the Federal Government into thinking they raised more capital and they really did not? Could this be legal? Someone needs to take a look at GMAC’s creative accounting. Something stinks.
Check your account information online. Specialized Loan Servicing uses your entire social security number and posts it on your account in 3 different places. As good customers, we should not have to tolerate the unethical practices of this company.
Go back and read your transfer letter. GMAC did not sell my loan. They only transferred the servicing. If GMAC stills owns your loan, contact their corporate office at :
GMAC Mortgage Corporate Headquarters
1100 Virginia Drive
Fort Washington, PA 19034
(215) 734-8899
You should also contact the Attorney General of your state, the FTC, BBB, and IC3, (the internet crime division of the FBI) Make sure to report your personal identity is being compromised by the posting of your social secuirty number and other identifiying information.
Specialized Loan Servicing is not an American Company. They were bought by Shinsei Bank of Tokyo back in 2008. As a taxpayer who bailed out GM, this is not sitting well with me. They take our money not once, but twice and now are sending it overseas! What loyality and patriotism GM has! I will be contacting my Congressional representative and expressing my feelings. I encourage everyone else to do the same.
I did not receive any notification that my loan had been sold. I logged on to pay my mortgage and couldn’t access my account. I sent a check in snail mail. The next month I called and was told to contact SLS. They have never sent me any documentation of my loan being transferred/sold. I was forced to make an immediate payment thru Western Union for a fee. I still have never even received a statement from these loan sharks. There phone skills are rude. I noticed that my GMAC (Ditech) loan did NOT have a penalty for early payoff and SLS has added one to my account.
What a rip off.
They are not allowed to penalize you for past due amounts within the first 60 days after the transfer. You should request a new copy of the transfer notification. They also should refund you the electronic payment fee — they waive it routinely for folks making payments within a certain window of time, and should be able to grant you a one time refund under the circumstances.
It is also a violation of law to change the terms from your original loan. They cannot add a penalty for early payoff to a loan that never had one to begin with. I would review your original loan agreement, grab theirs and contact them and demand a specific explanation of why they think they have the right to change the terms of a loan agreement.
Anyone in this situation should review this website and act on the recommendations:
http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea10.shtm
This company is ruthless and you will probably not get it resolved by phone. Send all communications to them in writing via certified mail. You need to keep a well documented trail of your communications. You might want to utilze the Better Business Bureau to help you resolve this. Belive it or not, they are very good about recommending other agencies for assistance when Specialized Loan Servicing does not correct the situation. Also the paper trail will allow you to seek financial recourse from them if you end up in court. Good Luck.