Select Portfolio Servicing, Inc.

Select Portfolio Servicing, Inc. (SPS) is a loan servicing company founded in 1989 as Fairbanks Capital Corp. with operations in Salt Lake City, Utah and Jacksonville, Florida.

Select Portfolio Servicing was created as a Utah company in 1989. Filings with both the Utah Secretary of State and the U.S. Securities and Exchange Commission (SEC) confirm this. Filings with the Utah SOS and SEC would more accurately confirm that **Fairbanks Capital Corp.** was created as a Utah company in 1989.

Fairbanks Holding (the parent company of Fairbanks Capital) was owned in part by PMI Group, Inc., and bond guaranty firm Financial Security Assurance.

In November 2003, Fairbanks Capital Corp. and Fairbanks Capital Holding Corp. agreed to pay $40 million to settle with the FTC and the U.S. Department of Housing and Urban Development (HUD), [http://www.ftc.gov/fairbanks] which charged them with engaging in a number of unfair, deceptive, and illegal practices in the servicing of subprime mortgage loans. The Commission distributed the $40 million as redress to affected consumers. The settlement also imposed a number of specific limitations on Fairbanks’s ability to charge fees and engage in certain practices when servicing mortgage loans. In early 2004, the defendants changed their names to Select Portfolio Servicing, Inc. and SPS Holding Corp.

Fairbanks changed its name to Select Portfolio Servicing effective June 30, 2004 according to its Articles of Amendment.

In 2005, Select Portfolio Servicing was purchased by Credit Suisse, a financial services company, headquartered in Zürich, Switzerland. According to a Securities and Exchange Commission report (CFN: 1-6862) filed August 12, 2005, Credit Suisse First Boston (USA), Inc. now known as Credit Suisse, purchased Select Portfolio Servicing and its parent holding company for $144.4 million. Credit Suisse's [http://www.credit-suisse.com/investors/en/ib_strategy.html Investment Banking Strategy] included "the acquisition of Select Portfolio Servicing, a mortgage servicing company."

In 2007, the FTC conducted a review of Select Portfolio Servicing’s compliance with certain aspects of the 2003 settlement. The FTC and Select Portfolio Servicing negotiated and agreed to several modifications of the settlement. [http://www.ftc.gov/opa/2007/08/sps.shtm] HUD has also agreed to these changes, which include:

-A five-year prohibition on marketing optional products, which are products or services that are not required by the consumer’s loan (such as home warranties.

-Refunds of optional product fees paid by consumers in certain circumstances.

-Revised limitations on charging attorney fees in a foreclosure or bankruptcy to ensure that consumers receive full disclosures, including the actual amount due if they receive an estimated fee. Select Portfolio Servicing also will conduct reconciliations after payoff or foreclosure and reimburse consumers who may have paid for services that were not actually performed.

-Refunds for consumers who may have paid foreclosure attorney fees for services that were not actually performed since November 2003.

-A permanent requirement that consumers be provided with monthly mortgage statements containing important information about their loans.

-A requirement that Select Portfolio Servicing revise its monthly mortgage statements based on consumer testing performed by a qualified, independent third party (which the company has already done).

-A requirement that Select Portfolio Servicing continue to use a qualified, independent third party to perform annual audits of its compliance with key settlement provisions until 2013. The results of these audits will be subject to review by the FTC.

-Revision of specific provisions to permit Select Portfolio Servicing to engage in certain practices that were prohibited by the original settlement. For example, the modified settlement allows the company to hold or reject a payment that is more than $25 short of the consumer’s monthly principal and interest payment so long as the consumer receives prompt notice of the action. The settlement continues to prohibit the company from applying such payments to fees before principal and interest.

The Commission vote to authorize staff to file the modified stipulated final judgment and order was 5-0. The motion requesting entry of the modified settlement order was filed in the U.S. District Court for the District of Massachusetts.

Select Portfolio Servicing has made dramatic changes to its practices since 2004, and the volume of unanswered and unresolved BBB complaints is declining. Fact|date=September 2008

Select Portfolio Servicing's current CEO is Matthew Hollingsworth.

Sub-prime Mortgages

Select Portfolio Servicing is one of the largest sub-prime mortgage servicing companies in the United States. It also performs fulfillment and underwriting functions for its parent company, Credit Suisse. A sub-prime mortgage is most often a home loan given to consumers with credit scores ranging slightly to far lower than what a given lender considers prime or for borrowers who do not supply the kind of income documentation required for so-called "conforming" loans. Lender viewpoints in regard to what constitutes "prime" vary, but in general, if it does not conform to Fannie Mae or Freddie Mac guidelines, it is considered non-conforming and thus, sub-prime.

See also

* Subprime lending

External links

* [http://www.spservicing.com/ SPS corporate website]
* [http://finance.google.com/finance?cid=14565602 Google Finance – SPS Profile]
* [http://www.ftc.gov/opa/2007/08/sps.shtm Federal Trade Commission Press Release]