In a distressing incident highlighting the critical impact of administrative errors in mortgage servicing, a now-separated couple from Palmdale, California, has filed a multi-count lawsuit against Specialized Loan Servicing, LLC (SLS). The lawsuit, filed in California State Court, alleges breach of contract, theft, and several other counts, accusing SLS of negligence as the mortgage servicer added a quarter of a million dollars to the couples mortgage leading to their financial and personal ruin. The couple is represented by the Law Office of Lorden and Reed.
Michael L. Russell and Renita Y. Russell, the plaintiffs in this case, claim that SLS's incompetence and negligent bookkeeping forced them into bankruptcy and later to a short sale of their home. This resulted in a significant loss of equity, estimated to be in the hundreds of thousands of dollars, and severe emotional distress, which contributed to the dissolution of their over 20-year marriage.
The Russells' story began in 2004 when they purchased a four-bedroom home in Palmdale. SLS took over the servicing of their loan in 2014. Following a loan modification in 2015, SLS erroneously added over a quarter of a million dollars to the loan balance. By 2018, SLS claimed the Russells were in default by $69,332, and by early 2019, the indebtedness purportedly reached a staggering $946,239. Despite their efforts, including filing for Chapter 13 bankruptcy and making consistent payments towards their mortgage, the couple's attempts to resolve the issue through legal counsel and requests for an accurate accounting from SLS were fruitless. The inflated loan balance led to a forced short sale in April 2022 to avoid foreclosure. A year later, SLS admitted they were wrong but refused to accept responsibility for their egregious actions.
The consequences of SLS's actions have been devastating for the Russells. They lost approximately $300,000 in home equity and faced excessive housing costs, moving and storage expenses, attorney fees, and litigation costs. Moreover, they have endured severe mental and emotional distress, resulting in the breakdown of their marriage, significant damage to their credit, and the loss of their home.
SLS, in their capacity as the mortgage servicer, was acting on behalf of Deutsche Bank National Trust Company. Last year, Rithm Capital Corp. announced it would acquire Computershare Mortgage Services Inc. and certain affiliated companies including Specialized Loan Servicing LLC.
The lawsuit includes counts of breach of contract, negligence, negligent misrepresentation, intentional misrepresentation, unfair business practices, unfair debt collection, theft, and other counts. The Russells seeks restitution of all monies paid to SLS in excess of the actual amount owed, compensatory damages, and punitive damages. The Russells wish to hold SLS accountable for the irreparable harm caused by their alleged negligence and to warn others of the potential risks involved in mortgage servicing errors.
JOHN P DAVID
View source version on newsdirect.com: https://newsdirect.com/news/california-couple-loses-home-due-to-blatant-bookkeeping-error-by-specialized-loan-servicing-llc-315993236
Law Office of Lorden and Reed
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