Homeowner Lawsuit: Loan Servicer Wrongfully Sought Foreclosure After Screwing Up Application Of Mortgage Payments To Escrow, 'Suspense' Accounts

In Jefferson County, Texas, The Southeast Texas Record reports:

• A Beaumont couple has filed suit against the mortgage holder they claim destroyed their credit ratings and forced them to face foreclosure. Vertis Malvo Jr. and Fran Malvo claim they obtained a home equity mortgage in 2006, a debt that was later purchased by defendant Deutsche Bank National Trust Co. in early 2009.

• In turn, Deutsche designated defendant Select Portfolio Servicing [fka Fairbanks Capital] as a loan servicing agent, according to the complaint filed March 16 in Jefferson County District Court. Since then, Deutsche failed to post payments and credits to the Malvos' accounts and refused to credit the account for errors, the suit states.

• "Select Portfolio Servicing had informed Defendant that Plaintiff did not owe the premiums, but Select Portfolio Servicing continued to demand payment, applied monthly mortgage payments to escrow, or simply held the funds in a 'suspense account' which then created the erroneous reports of late payments to the credit bureaus," the complaint says.

• "These erroneous reports caused Plaintiff to lose an extension of credit." On Jan. 24, Select Portfolio Servicing filed an application for foreclosure on the Malvos' property, wrongly alleging the couple failed to make multiple installment payments, the Malvos claim.

For the story, see Beaumont couple says foreclosure due to mortgage company error.