Select Portfolio Servicing, Inc Mortgage Complaint

Select Portfolio Servicing, Inc Mortgage department,

Conventional adjustable mortgage (ARM) Loan servicing, payments, escrow account Pennsylvania

My mortgage was purchased last year by SPS ( Select Portfolio Servicing ) from - -. Prior, I used to pay approximately $250.00 per month in excess of my contractual obligation, and per the terms of a loan with no prepayment penalty, any payments in excess of the contractual amount are posted to the principle amount. In the future, I intend to make considerably more " over '' payments. On my most recent statement, SPS notified me that unless a full contractual payment is made, any overage would remain in " in-posted '' status until it builds to a full contractual amount. As my contractual amount is approximately $5000.00, this indicates that I could pay $500.00 over, but nothing would post to my account for nearly a year. This is a violation of the loan agreement and creates an over charge for interest. Based on my conversation with SPS, I believe this is a systemic issue for any payment overages that come as payments outside of a single monthly payment ( i.e. if I pay $500.00 mid month every month, they would only hold it in escrow, if I pay $500.00 over on an end of month payment, it would post to principle ). I believe any party paying unique separate payments on top of contractual are victims of this misallocation and over charge of interest. I was told because this was a " conforming '' loan, the payment allocation was at their discretion. Not sure how conforming status impacts the legal payment hierarchy.