Consumer complaint received 2022-09-06
Company: Shellpoint Partners, LLC
State: MN
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Trouble during payment process

Complaint:
NEWREZ dba SHELLPOINT MORTGAGE SERVICING 5 YEARS .... Shellpoint has failed to service my installment mortgage in accordance to the terms of my note and ARM disclosure. Their response to rate changes, up or down, has been inconsistent. Their communication sketchy at best. ( see excerpts below ). Sloppy customer service is a kind description. 
History : On XX/XX/XXXX I entered into a contract with XXXX Mortgage. XXXX was in XXXX position on my property. In order to secure priority, they offered me an unconventional mortgage. My home was underwater. XXXX % mortgage plus 40 year amortization. Win/win. I read the note, mortgage and the disclosure. I knew and XXXX knew the terms. From XX/XX/XXXX to XX/XX/XXXX NEVER was there an issue with payments, interest, rate adjustment or recasting the payment with current data. Never did their recast involve padding the principal balance, never did they blatantly deflect XXXX delay responding to minor issues. 
********************************************************************************** EXCERPTS FROM NOTE : Payment notification per Note and ARM Disclosure. 
" ... ..Each anniversary of the first payment due date is called a Payment Change Date. For each Payment Change Date we will determine the amount of the monthly payment that would be large enough to repay the Principal Balance and interest on the Principal Balance in full by the final payment date. We will use the interest rate in effect on the date shown in the notice of payment change ... to make this calculation. The interest rate will continue to adjust between Payment Change Dates as describe in the section called Interest Rate on page 1. 
Because the interest rate can change each month and the payment changes annually, it is possible that the regular monthly payment will not pay all the interest that accrues on the Principal Balance. 
If the interest rate changes after the last Payment Change date and before the final payment will be adjusted so that the Principal Balance and interest you owe will be paid in full. 
We will give you at least 25 days ( but no more than 120 days ) notice of any change in the payment. The interest rate in effect on date 120 days before the final payment due ( as originally scheduled or as rescheduled due to any extension of the final due date we agree to ) will be the rate we charge after that date. '' ****************************************************** FROM ARM DISCLOSURE : " HOW YOUR PAYMENT CAN CHANGE : Your monthly payment may increase or decrease substantially, each year, based on the changes in your interest rate. 
You will be notified in writing at least 25, but not more than 120, days before the due date of the payment at a new level .... 
You will be notified once each, year, during which interest rate adjustment, but no payment adjustment, have been made to your loan. These notices will contain information about the index rate, interest rates, payment amount, and loan balance .... '' ************************************************************** EXCERPTS FROM SHELLPOINT COMMUNICATIONS : XX/XX/XXXX. XXXX from SMS " ... you signed a variable interest rate Note ... .therefore, the payment amount varies daily, but the change is calculated monthly overall ... .. the enclosed Adjustable Rate Mortgage Disclosure state that, " 'because your interest rate can change monthly but your payment changes annually, it is possible that your regular payment will not pay all of the interest that is owed and accrued on your loan balance ' '' This is why there were no funds applied to the principal balance for XX/XX/XXXX, XX/XX/XXXX and XX/XX/XXXX installments. " **** " Regarding the interest rate change and posting of funds to your loan, please advised that according to the terms of your Note ...., the U.S. Prime Rate changes each XXXX. Therefore, .... you were advised of this change... .acknowledged that the interest rate could change in XXXX of each year.. '' " ... Please be advised, barring any unusual circumstances, escrow analyses are performed once a year, and this is the only communication you will receive regarding changes to month payment amount. " ***** ****The interest was adjusted and balance applied to the principal XXXX XXXX changes are not annual... Note specifically calls for a recast of principal and interest annually, with a 25 day, minimum, notice. misinformation was repeated again in their response dated XXXX. " Shellpoint is not required to notify you of an interest change on the loan, because, as you have state, the change is tied to the XXXX XXXX rate, which changes annually, ( every XXXX ). .... You will be notified approximately sixty ( XXXX ) days in advance regarding any payment changes due to escrow. '' XX/XX/XXXX from SMS " ... .Upon receipt of the loan, it underwent a thorough audit. When the audit was completed, a change date of XX/XX/XXXX was entered. After reviewing your rebuttal, a request was made to recalculate the loan for the payment due on XX/XX/XXXX. It will also be recalculated in XX/XX/XXXX, and every XXXX thereafter. '' ******SMS did not adjust until XX/XX/XXXX... 
XX/XX/XXXX " ... Unfortunately, because it was to be a manual change to the loan, and not a routine system change, the change was not made. '' XX/XX/XXXX from SMS " ... .Upon receipt of the loan, it underwent a thorough audit. When the audit was completed, a change date of XX/XX/XXXX was entered. After reviewing your rebuttal, a request was made to recalculate the loan for the payment due on XX/XX/XXXX. It will also be recalculated in XX/XX/XXXX, and every XXXX thereafter. '' ******SMS did not adjust until XX/XX/XXXX... 
XX/XX/XXXX " ... Unfortunately, because it was to be a manual change to the loan, and not a routine system change, the change was not made. '' Once the matter was brought to our attention, we immediately updated the principal and interest payment for XX/XX/XXXX. This response is notifying you twenty-five ( XXXX ) days ' in advance, as stated in your Note ..... 
Regarding the credit reporting, ... ... we were unaware of the bankruptcy on the loan until XX/XX/XXXX. '' ******Notification did not follow format contained in the ARM disclosure. 
XXXX fromSMS " Your loan is currently, or has been previously, involved in a bankruptcy action ... .. '' XX/XX/XXXX " ... .Furthermore, to make the payment change effective XX/XX/XXXX rather than XX/XX/XXXX. .... 
... .Furthermore, Shellpoint has updated our system to insure all payment change notices are provided 25 days in advance. '' ********Payment was deducted XX/XX/XXXX without proper notice. 
loan balance .... '' ********************************************************************************************** Complaint : Shellpoint Mortgage Servicing 's lack of compliance to the terms of my contract. 
XXXX After repeated request by me : ... .Upon receipt of the loan, it underwent a thorough audit. When the audit was completed, a change date of XX/XX/XXXX was entered. After reviewing your rebuttal, a request was made to recalculate the loan for the payment due on XX/XX/XXXX. It will also be recalculated in XX/XX/XXXX, and every XXXX thereafter. '' ******SMS did not adjust until XX/XX/XXXX... 
XX/XX/XXXX " ... Unfortunately, because it was to be a manual change to the loan, and not a routine system change, the change was not made. '' Once the matter was brought to our attention, we immediately updated the principal and interest payment for XX/XX/XXXX. This response is notifying you twenty-five ( XXXX ) days ' in advance, as stated in your Note ..... 
XXXX full months after anticipated change date. This was the only time the principal amount matched the payment history. 
XXXX notice dated XX/XX/XXXX received XX/XX/XXXX Principal used for the next payment {$600.00} above the pay history balance. 
Change date payment XX/XX/XXXX... XXXX days???? padded principal. 
XXXX notice dated, XX/XX/XXXX mailed XX/XX/XXXX received XX/XX/XXXX Principal used for next payment {$750.00} above pay history balance. Prime rate changed XX/XX/XXXX down XXXX -- - per Note ... XXXX must be current as of notice date. 
Change date payment XX/XX/XXXX... XXXX days???? padded principal. 
XXXX notice dated XX/XX/XXXX received XX/XX/XXXX Principal used for next payment {$450.00} above pay history balance. 
Change date payment XX/XX/XXXX... XXXX days???? padded principal. 
XX/XX/XXXX from SMS " ..when the letter was reviewed and sent on XX/XX/XXXX the amount listed is a projected principal balance ... .loan has a daily accrual of interest, which may cause the difference between the projected unpaid principal balance ( UPB ) used in the letter and the actual UPB at the time of the change. '' Not only did they pad the balance but the ignored the XXXX and XXXX payment on account. 
My CONTRACT requires CURRENT RATE AND CURRENT PRINCIPAL AT THE TIME OF NOTICE XXXX notice dated XX/XX/XXXX received XX/XX/XXXX Principal used for next payment {$440.00} above pay history balance. 
technically because the rate did not change - no notice had to be issued. HOWEVER, by padding the principal the payment did not reflect ANY of the principal paid over the year. The recast resulted in a reduction of only {$0.00} in the payment. Overall reduction should have been {$2.00} not {$0.00}. 
XXXX notice dated XX/XX/XXXX mailed XX/XX/XXXX received XX/XX/XXXX Principal used for next payment {$610.00} above pay history balance. The website has been updated with the revised payment, BUT the statement mailed to me has not. 

I did work with the BBB to resolve other issue, the original complaint was closed BECAUSE SMS responded with this fluff ... .with no intention of " IMPROVEMENT '' Company public response Company believes complaint represents an opportunity for improvement to better serve consumers ' Company public response Company believes complaint is the result of an isolated error Company response to consumer Closed with explanation Company public response Company believes it acted appropriately as authorized by contract or law Company public response Company believes complaint represents an opportunity for improvement to better serve consumers ********************************************************** question XXXX ruling below : does this only apply to Modified loans or to all contracts created by the company who transferred the loan???? 
Honor previous loan modification agreements : If the borrower has a loan modification agreement, XXXX must honor it under the terms of the company that transferred the loan. 
In XX/XX/XXXX, the CFPB released new rules on mortgage servicing that will apply to every mortgage servicer.

Company public response: Company believes complaint represents an opportunity for improvement to better serve consumers
Company response to consumer: Closed with explanation