Dear ****** ** ********* ****** and ******* ** ********* ***,
We are writing in response to a dispute that you filed with the Denver Better Business Bureau (“BBB”)
with regard to the servicing of the above-referenced mortgage loan. We understand that by filing a
dispute with the BBB, you have authorized us to upload a copy of our response to the BBB website. We
further understand that you are requesting the BBB to assist you with SLS’ application of payments to
escrow and contractual monthly payments.
In your correspondence, you have asserted that Specialized Loan Servicing (“SLS”) neglected to include
Private Mortgage Insurance (“PMI”) in a 2017 escrow analysis. Our records reflect that the escrow
analysis statement dated September 8, 2017 failed to include the PMI premiums that were due from
November 2017 through October 2018. Although not included on the September 8, 2017 escrow analysis
statement, SLS still disbursed monthly payments of $167.68 for PMI from December, 2017 through
October 2018. This oversight was corrected on September 11, 2018 when SLS prepared a new escrow
analysis statement in which SLS noted an escrow shortage of $2,913.00. To assist with reducing the
financial burden, the payment due toward the escrow shortage was spread over 60 months. We sincerely
apologize for any inconvenience you may have experienced as a result of this matter. We have enclosed
copies of the 2017 and 2018 annual escrow analysis statements for your reference.
In your correspondence, you have asserted that payments were improperly applied towards the escrow
cushion and that SLS never disclosed information about collecting an escrow cushion. SLS discloses
information about the escrow cushion on each escrow analysis statement. As indicated in the current and
previous escrow analyses, SLS elects to collect a two month cushion, as allowable by law. The lowest
point in the escrow period cannot fall below the cushion of $844.70 currently. As such, an escrow
shortage of $2,018.51 was concluded. Under the Real Estate Settlement Procedures Act (“RESPA”), a
servicer may add an amount to maintain a cushion no greater than 1/6 of the estimated total annual
payments from the account. One-sixth per year equals two months. SLS maintains such a cushion. The
escrow cushion is an additional sum of money required by the lender to be paid into the escrow account
as part of the monthly escrow payment to protect the lender against increases in escrow expenses. We
sincerely apologize if this information was never fully communicated to you when speaking with our
representatives by phone. We have enclosed the 2019 annual escrow analysis statement for your
In your correspondence, you have requested an explanation of the payment history and the status of the
August 1, 2020 payment. Our records reflect that, as of July 1, 2020, $20.51 was held in unapplied funds.
On July 24, 2020 we received your payment of $834.04 for a total of $854.55 in unapplied funds. On
August 5, 2020 we reversed a $1001.06 payment to escrow and added it to unapplied funds for a
combined total of $1,855.61 in unapplied funds.
On August 5, 2020 we then applied $1,855.61 from unapplied funds towards the July 1, 2020 contractual
monthly payment. That same day, on August 5, 2020 we received a payment from you in the amount of
$1,864.63 and applied that payment to the August 1, 2020 contractual monthly payment. Our records
reflect that the account is due for the September 1, 2020 monthly payment in the amount of $1,860.12.
The current escrow balance is $1,450.78; there are currently no funds held in the unapplied funds.
account. We have enclosed copies of the payment history and payment transaction codes for your
Please know that, in the event a full monthly mortgage payment is not made, it is the policy of SLS that
funds are placed in the unapplied funds/suspense account until such time a full monthly mortgage
payment is received.
We understand that some of the issues described in your dispute are related to the application of your
payments. Please be advised that our payment posting hierarchy is as follows:
• If payment is greater than a contractual monthly payment the loan will be reviewed for
• If there are outstanding fees on the loan, the overage is applied to the fees.
• If there are no outstanding fees or late charges on the loan, the overage is applied to additional principal.
• Payment overages are not posted to escrow unless instructed by the borrower.
The following payment methods allow for posting instructions to be noted by the borrower:
• Payment Coupon – allows additional principal
• ACI payments – allows additional principal and escrow payments
• Live Agent via Phone – allows specific posting instructions
In your correspondence, you requested that an SLS agent contact you by phone. On August 6, 2020, we
initiated a request to have an agent call ******* ** ********* *** at ************ regarding the above
If you have any questions regarding this information, please contact Customer Care toll free at *************,
Monday through Friday, 6:00 a.m. until 6:00 p.m. MT. We accept calls from relay services on behalf of