SLS Shaking Down Homeowners Over Bank Of America Zombie Mortgages. Problem Is, SLS Can’t Prove They Own The Debt.
Unfortunately, this time it appears Specialized Loan Servicing bought a U-Haul truck full of worthless paper from Bank of America. Yet, that hasn’t stopped the lender from trying to play Tony Soprano.
About five years ago, bean counters at Bank of America figured out a way to make a few bucks. They decided to sell their worthless paper to any sap servicer and investor. BofA charged off the majority of these loans as being uncollectable.
They loaded up bankers’ boxes full of these garbage loans and put them in storage units around Dallas, TX and Charlotte, NC. Then, like a scene out of Storage Wars, second-tier and third-tier servicers like SLS would bid on the hundreds of bankers’ boxes in the storage unit.
Most of these loans were charged off over a decade ago and are nothing more than uncollectable zombie debt. So, servicers like SLS ended up like a contestant on a game show who the picks the empty mystery box.
SLS Shaking Down Homeowners Is Borderline Harassment
The first being lack of standing. The vast majority of the time, SLS cannot prove they have legal standing to foreclose because they lack the original wet-ink copy of the note. This is a requirement in Florida and as it is in most judicial foreclosure states. SLS also needs to be able to validate the dollar amount of the debt. However, in most cases, they can’t.
Many of these loans are also past the 6-year statute of limitations. Like with most zombie debt, a lender will pop out of the blue usually 7-10 years later to try to collect on the debt. However, most states like Florida have a 6-year statute of limitations that bars lenders from coming after you after 6 years. However, check with a lawyer because the statute of limitation laws may vary from state to state.
SLS knows all this. Yet, it doesn’t seem to stop them from trying to shake down and threaten homeowners.
MFI-Miami had an Orlando client who was an Army combat veteran for a client who SLS hounded mercilessly about mortgage debt BofA wrote off over a decade ago. BofA also had made no contact with the homeowner in over 9 years. Naturally, the homeowner was confused when SLS began shaking him down and threatening foreclosure. Like most of these loans, SLS could not validate the dollar amount owed nor could they even prove they were in possession of the mortgage file.
On top of it, SLS was five years past Florida’s 6-year statute of limitations by trying to collect an 11-year old debt.
SLS Is Playing The Same Game Nigerian Email Scammers Play
As I wrote, SLS knows they will more than likely not be able to collect on these zombie loans. However, they look at this as a numbers game. They use the same methodology as Nigerian email scammers. If SLS spends $10,000 harassing 50,000 people eventually 50-100 people will get fed up and give them money. As result, SLS could potentially reap a 500% ROI.
The only problem is if the homeowner gives them money. The homeowner would screw themselves in long run by doing this. If a homeowner gives SLS money, the mortgage is now technically re-instated. This would allow SLS to refuse future payments and initiate foreclosure.
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