Select Portfolio Servicing SPS Zombie Second Mortgage Foreclosure Defense in Florida

Select Portfolio Servicing, Inc. (SPS) is a mortgage servicer that operates around the country. The company specializes in servicing single-family residential mortgages. Founded in 1989, SPS has headquarters in Salt Lake City, Utah, although they do have a Jacksonville-based office here in Florida. Primarily a mortgage servicer, SPS manages the day-to-day administration of mortgage accounts, including the collection of regular monthly mortgage payments.

Select Portfolio Servicing is not accredited by the Better Business Bureau (BBB) and in fact, they have had thousands of complaints lodged against them. Many of these surround the zombie second mortgage foreclosure lawsuits filed by SPS against consumers. If you have been notified that your second mortgage is in default, or that the company has initiated foreclosure proceedings, you need legal advice. Our zombie second mortgage foreclosure defense lawyers can provide it.

Is Select Portfolio Servicing Contacting You About a Second Mortgage?

Many people have been surprised when they are contacted by Select Portfolio Servicing. While they may have known that they had a second mortgage, they may have never heard of SPS before, as the company is not usually the original mortgage holder. In other instances, borrowers are shocked to learn that they even still have a second mortgage, as they have not heard about it for years.

Companies such as SPS purchased bundles of mortgages during and shortly after the collapse of the housing market in 2008. Original lenders, such as the big banks, sold these mortgages to third-party companies for pennies on the dollar, knowing it was too costly and time-consuming to foreclose on thousands of homes. Under the Truth in Lending Act, companies must inform borrowers when their mortgage is sold to another company. During the Great Recession, few homeowners learned that their loan was now with Select Portfolio Servicing. They also never received updates regarding their second mortgage, which is also required under the Act.

Instead of notifying borrowers, companies such as SPS sat on the loans until housing market values started to increase again. At that time, they started contacting borrowers regarding their second mortgage debt, threatening to foreclose if it was not paid. It was a shocking situation for borrowers who believed they were no longer obligated to pay their second mortgage. It is for this reason these cases are known as zombie second mortgage foreclosures because they seemingly come back from the dead.

Can SPS Foreclose on a Second Mortgage?

Holders of second mortgages, such as Select Portfolio Servicing, can foreclose on them if the borrower is in default, just as holders of first mortgages are able to. Also like first mortgage holders, SPS must prove several aspects of their case before they can foreclose on a second mortgage. Florida is a judicial foreclosure state, meaning lenders and mortgage servicers must file a lawsuit against borrowers before they can foreclose on a mortgage loan.

Many borrowers assume that if SPS has taken legal action against them, or sent them a notice of impending action, the company has the legal right to do so. This is a mistake and in fact, companies such as SPS are counting on the fact that the borrower will simply try to come up with repayment for the debt. There are many defenses that can be used in these cases, but it is important to speak to a Fort Lauderdale foreclosure defense lawyer immediately.

The Statute of Limitations in Second Mortgage Foreclosure Cases

Just like other civil lawsuits, those involving the foreclosure of a second mortgage are governed by a statute of limitations. The statute of limitations is the amount of time mortgage lenders and servicers have to file a lawsuit against a borrower. In Florida, the statute of limitations on these lawsuits is five years from the date of default. However, each instance of non-payment is a separate default so, SPS has five years from the last date of default to file a second mortgage foreclosure lawsuit against borrowers.

If five years have passed since the last date of default, SPS has lost its legal right to file a lawsuit against you. While this can be used as a defense in any foreclosure case, it is especially useful in those involving zombie second mortgages. Companies such as SPS often sit on these second mortgages for many years. They may not realize that the statute of limitations has expired, or they may know and hope the borrower does not realize it.

If the statute of limitations has expired in your case, you can use it as a defense. Furthermore, threatening you with foreclosure after the statute of limitations has expired is a violation of the Fair Debt Collection Practices Act (FDCPA). When mortgage lenders and servicers violate this federal law, you can file a lawsuit against them for up to $1,000 in statutory damages and any actual loss you suffered.

Make SPS Prove Ownership of the Loan

Mortgage lenders and servicers can only file a lawsuit against a borrower if they have legal standing. This means they must prove that they are the owner or holder of the zombie second mortgage loan. Again, many people assume that if SPS has notified them of a foreclosure on their second mortgage, the company owns the loan. Often, this is not the case.

SPS purchases second mortgages from other companies or services these loans for other institutions. When SPS is just the servicer, they do not own the loan. Even when SPS has purchased the loan from another company, the account has often changed hands multiple times and SPS does not always ensure they have the proper documentation regarding ownership. If they cannot prove that they own the loan, they have no legal right to sue you for it.

Call Our Zombie Second Mortgage Foreclosure Defense Lawyers in Fort Lauderdale for a Free Consultation

If Select Portfolio Servicing has contacted you about second mortgage foreclosure, call our Fort Lauderdale zombie second mortgage foreclosure defense lawyers as soon as possible. At Loan Lawyers, we have helped many clients who were harassed by the company or who were wrongfully sued. We will put that expertise to work for you. Call us now at (954) 523-4357 or contact us online to request a free consultation.