After surviving cancer, Kelly Estavillo lost the ability to operate his business. He has since been in a constant battle to sell his home before Select Portfolio Servicing (SPS), a mortgage servicing company, forecloses his property.

Estavillo is among several individuals facing foreclosure by a mortgage servicing company called SPS, and is being represented by Richard Szerman of Alta Realty Group, who offers free foreclosure defense services to the public.

“The banks are making lots of money in the refinance segment while losing lots of money in the mortgage services segment,” Szerman said. “That is a nice, banker’s industry way of saying that homeowners in trouble are getting pushed deeper and deeper into trouble, and those with money and credit get to benefit.”

Estavillo had been working with SPS to arrange a short sale of his Palmdale home well before the coronavirus pandemic started, beginning the arrangement back in July of 2019. However, Szerman said the company failed to communicate effectively over the course of the pandemic, leading both Szerman and Estavillo to be caught unaware that his house had moved into foreclosure.

Szerman said he believes SPS’s lack of communication is intentional, meant to force properties such as Estavillo’s into foreclosure because the more loss the company acquires, the more money they can receive in a potential federal COVID-19 bailout package.

Officials from Alta Realty Group say a total of five buyers have backed out of purchasing Estavillo’s home because the bank took too long to respond.

The foreclosure of Estavillo’s home was originally scheduled for July 16 of last year, but was then rescheduled for September 10 after the situation made its way to KHTS in a previous story here. The current scheduled foreclosure date has been moved to March 11.

Szerman said that it would be in SPS’s best financial interests to complete the short sale, as Estavillo’s property would be worth more as a short sale than owned by the bank after a potential foreclosure.

See Related: Santa Clarita Realtor Discusses Foreclosure Defense During The Pandemic

According to Szerman, Estavillo is eager to complete the short sale because having a foreclosure on record would possibly disqualify him from local assistance programs, which he would benefit from in his condition.

Szerman believes that the banks know that “the vast majority of people don’t have the financial resources and mental and emotional tenacity to fight a big bank in court for five years.”

Szerman currently has five other clients experiencing similar issues with SPS, but Estavillo in particular is reportedly having the hardest time, dealing with not only SPS but the loss of his job, a divorce, and cancer recovery.

By choosing to foreclose Estavillo’s home with zero communication or cooperation for a short sale, SPS is violating three California Civil Codes, the Real Estate Settlement Procedures Act, the California Homeowners Bill of Rights and their very own written agreement, according to Szerman.

Estavillo has since hired Szerman’s wife, Jane Szerman, as his attorney and plans to file suit if the bank chooses to undergo the foreclosure.

“I’ve been in this business for 30 years and I have not once seen a bank not respond to a letter from a client’s attorney,” Szerman said. “They may not respond to a realtor like myself, but when an attorney makes contact it means business.”

Szerman recommended Santa Clarita residents with mortgages in default call him for free assistance, but also that they contact their local politicians to petition them to put regulations in place to stop banks and mortgage servicers from foreclosing during the coronavirus pandemic.

KHTS has reached out to SPS for comment on Wednesday, but has not received a response as of Thursday.

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