Specialized Loan Servicing Redux: Bizarre Statement Adds to the Confusion

Specialized Loan Servicing, which took over tens of thousands of home equity loan accounts from GMAC Mortgage, continues to confound its involuntary newest customers.  Many were shocked and surprised to discover their home equity credit line was sold off to a company better known for dealing with “problem payers” and “sub-prime” account management, despite never making a late payment and maintaining an excellent credit score.

SLS has caused additional consternation for consumers by charging them late fees on accounts given just days to make payment on, despite assurances in a welcome letter that such late fees or negative credit references cannot be charged on newly transferred accounts for a period of 60 days.

For those who managed to squeak by with an online or phone payment, discovering that in certain circumstances, the $9.95 convenience fee is waived for such transactions, November’s challenge is understanding the next monthly statement that follows, showing a much lower minimum payment requirement and an apparent partial-month bill.  In our case, the bill amounted to just 11 days of account service and required a significantly lower minimum payment.  Although the due date on the bill did not change, the number of days covered by the statement did in this case.

No accompanying explanation was provided.

For consumers who make every effort to protect their credit rating and payment history in this incredibly difficult credit marketplace, unexplained “surprises” and concerns about mistaken billing, “late” payments, and even worse, a hit on a credit report, can be devastating as other creditors take note and begin cutting off lines of credit, lowering credit lines, or dramatically increasing interest rates because of their new-found concern for your credit worthiness.

SLS must take stronger measures to better inform consumers of their actions and take every precaution to protect consumers’ hard-earned credit ratings.

Additional oversight is warranted, particularly because most consumers have little choice in the transition to SLS, unless they are able to pay off their existing balance and close the account, or manage a refinancing that transfers the account somewhere else.

GMAC Mortgage may require additional financial assistance from the U.S. government in the form of bailout money to stay solvent.  It is likely some original mortgages may be the next thing to be sold off to third party companies in GMAC’s efforts to remain operational and meet the terms and conditions imposed on it by the federal government.

My advice: You have to watch GMAC and SLS like a hawk, and never assume “it will be taken care of.”  If anything seems questionable or is unclear, pick up the phone and call for immediate answers.  You must protect your payment record and credit rating at all costs in this economy.

Keep reporting your experiences here and in the original article on this issue.