Consumer complaint received 2022-05-13
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: Shellpoint Partners, LLC (GA)

We are writing to follow up on our original complaint and to bring to surface additional consumer rights violations perpetrated by Shellpoint Mortgage Servicing and XXXX XXXX XXXX XXXX XXXX against us. For reference, the original complaint number is XXXX and our response comes at this time due to the fact that Shellpoint only recently provided us with loan modification terms. As stated in our previous complaint, we had suffered financial/economic hardship as a direct result of the COVID 19 pandemic. Per our rights as established by the CARES Act, we invoked a Covid forbearance on our loan until the financial hardship resolved itself. As the COVID forbearance was coming to a conclusion on XX/XX/XXXX, we followed all requisite steps to submit a completed loan modification application and received confirmation of such on XX/XX/XXXX from our then servicer, XXXX XXXX. In the beginning of XX/XX/XXXX, our loan servicing was transferred to Shellpoint. Shellpoint had a legal obligation to review our loan modification application as accepted and verified in writing as complete by the prior servicer, XXXX XXXX, and to provide us with wind down options AND to provide us with written explanation for any of the wind down options that we may not have qualified for within a 30-day window of application receipt. It took months for them to present us with anything despite our repeated attempts to get cooperation, and only on the heels of our first CFPB complaint. Shellpoint did NOT present us with any options or explanations as to the cause for our disqualification as to the multitude of federally established options ( e.g. : modification, restructuring, side by side payback, etc. ). Rather, they as part of their response to our complaint attempted to paint their willingness to work with us at all as some sort of concession. They are the mortgage servicer and do not have the legal authority to circumvent their legal obligation to us as consumers in direct violation of the law. Per the CFPB final rule : Unless the borrower states they are not interested, the servicer must also list and briefly describe to the borrower those forbearance programs made available at that time and the actions the borrower must take to be evaluated. They were and are OBLIGATED to provide us with options or at a minimum, detailed written explanations for disqualification of any of the options, which they refused. Further, after months of trying to get them to honor their obligation to us so that we could move forward out of this financially trying period of our lives, they put us on a 3-month payment trial accommodation. This payment trial was a direct accommodation granted to us as part of the Covid forbearance loan modification process. As part of this, they gave us absolutely no written or verbal explanation as to the potential terms of the trial period or subsequent modification. In an effort to avoid damage to our credit or loss of our home, we promptly made payments as scheduled by Shellpoint despite the fact that we had no qualified understanding or explanation as to the terms of potential modification. As an associated accommodation for which we were paying as scheduled, Shellpoint had no legal authority to damage our credit. Shellpoint delivered a modification package to us dated XX/XX/XXXX with requisite notarized signatures and return date by XX/XX/XXXX to accept the terms that they established we were given NO discussion or explanation from our account coordinator or a manager, just simply the option to accept their terms or allow our home to flip into technical default at risk of foreclosure. We begrudgingly signed the documents under extremes duress so as to not lose our house, but the Shellpoint conduct leading up to the offer of accommodation in addition to the terms of the accommodation and the terms of the loan modification are in direct contradiction to the CARES Act and Congressional/Executive intent, as is clearly established through the CFPB final interpretive rule. As such, Shellpoint has once again knowingly directly and explicitly violated our consumer rights in a multitude of regards. The details of our complaint are as follows : 1- The servicer immediately started reporting negatively against our credit for late payments despite the fact that the trial period IS the accommodation to allow us the transition into the modified loan prior to the COVID forbearance, we had no late payments, and as soon as the servicer presented us with the trial period payback terms, we paid promptly and on the schedule that they established. Per the CFPB final rules, the servicer CAN NOT report adversely against our credit while we are current on the accommodation that they have presented to us in an effort to restructure out of the forbearance deficiency. This was established by the CARES Act and reaffirmed in the CFPB final rule. Clearly the servicer is well aware of this and has chosen to adversely injure our credit worthiness, regardless. We each suffered an approximate XXXX point reduction in our credit scores as a result of this illegal action. 

Per CFPB Final Rule : The borrowers acceptance of an offer of the loan modification must end any preexisting delinquency on the mortgage loan or the loan modification must be designed to end any preexisting delinquency on the mortgage loan upon the borrower satisfying the servicers requirements for completing a trial loan modification plan and accepting a permanent loan modification. 

Per CARES Act : REPORTING.Except as provided in clause ( iii ), if a furnisher makes an accommodation with respect to 1 or more payments on a credit obligation or account of a consumer, and the consumer makes the payments or is not required to make 1 or more payments pursuant to the accommodation, the furnisher shall ( I ) report the credit obligation or account as current ; or ( II ) if the credit obligation or account was delinquent before the accommodation ( aa ) maintain the delinquent status during the period in which the accommodation is in effect ; and ( bb ) if the consumer brings the credit obligation or account current during the period described in item ( aa ), report the credit obligation or account as current. 

Although we met all requisite timelines and made all payments before the due date, we suffered an egregious damage to our credit scores/reports. 

2- The servicer modified the terms of our loan to our detriment and with no explanation or justification. Prior to their own adverse reporting to the Credit Bureaus, we both had very strong credit scores and credit worthiness exceeding XXXX each. XXXX XXXX credit score in XX/XX/XXXX was XXXX and fell in XX/XX/XXXX to XXXX and XXXX XXXX credit score in XX/XX/XXXX was XXXX and fell in XX/XX/XXXX to XXXX. 

Despite these high scores, the servicer modified the terms of our loan increasing our mortgage interest rate from 4 % to 6 % during a period of historical low rates. This is unjustified based on our credit file and constitutes unsupported punitive aggression. 

Per CFPF Final Rule : First, to be eligible, the loan modification may not cause the borrowers monthly required principal and interest payment to increase and may not extend the term of the loan by more than 480 months from the date the loan modification is effective. Second, if the loan modification permits the borrower to delay paying certain amounts until the mortgage loan is refinanced, the mortgaged property is sold, the loan modification matures, or, for a mortgage loan insured by the Federal Housing Administration ( FHA ), the mortgage insurance terminates, those amounts must not accrue interest. 

3- In conjunction with the rate increase, the servicer modified the terms of our loan from a 40-year mortgage into a 30-year mortgage rolling in the delinquent payment amount thus increasing our principle due by approximately {$18000.00} while increasing our rate and shortening the term of the loan. As such, they increased our monthly payment by approximately $ XXXX which is in direct contradiction to the rules established by the CARES Act and the CFPB final rule for servicers, as the consumer is not allowed to be financially injured nor is their creditworthiness allowed to be injured as long as they are satisfying any associated accommodation during the loan modification window. 
Outstanding Principal : XX/XX/XXXX was {$170000.00} and increased to {$190000.00} with the loan modification including unpaid interest, escrow advances, and other fees. 
Monthly Payment : was {$1200.00} and increased to {$1600.00} Per CFPF Final Rule : First, to be eligible, the loan modification may not cause the borrowers monthly required principal and interest payment to increase and may not extend the term of the loan by more than 480 months from the date the loan modification is effective. 

4- The servicer applied multiple unfounded fees that fall in direct contradiction to their legal obligation to waive all such fees including but not limited to the verification of occupancy fees that should have been waived in addition to the requirement that those sorts of inspections be waived. 

Per CFPB Final Rule : Finally, the servicer may not charge any fee in connection with the loan modification and must waive all existing late charges, penalties, stop payment fees, or similar charges that were incurred on or XXXX after XX/XX/XXXX, promptly upon the borrowers acceptance of the loan modification. 


The fact that we must circle back around on this issue is egregious and the servicer is clearly pursuing predatory and punitive action against us as consumers for taking advantage of a Congressionally established COVID 19 relief program. Further, they are illegally injuring our creditworthiness in direct violation of the Fair Credit Reporting Act as modified by the CARES Act. Shellpoint is making calculated and deliberate efforts to injure us as consumers and are in direct violation of the law as established by the CARES Act and interpreted by CFPB through the Final Rule. 

The remedy that we seek for this is egregious conduct by Shellpoint is multifaceted as follows : 1- Shellpoint must immediately stop reporting our account as deficient and immediately repair the damage to our creditworthiness.

2- Shellpoint must immediately present us with all requisite modification options and/or explanations as to the cause for our ineligibility simply verbally stating that the investor group does not offer modification options does not grant legal authority to circumvent the legal framework that was established by the CARES Act and CFPB interpretation. 
3- Shellpoint must present us with a loan modification package that aligns with the terms as established in the CFPB Final Rule including removal/waiving of all punitive fees, reduction of the interest rate at least in line with the original loan terms of 4 % or less, and/or extension of the loan term toward 40 years if necessary to reduce the monthly payment back in line with our pre-COVID payment as established in the CFPB Final Rule. 

It is our request as injured consumers that this complaint and file be submitted to the FTC for further investigation into this predatory and illegal conduct on the part of the mortgage servicer Shellpoint. We should not be in a position that we are again victimized by their refusal to properly conduct their mortgage servicing obligations and fear that this is established pattern conduct since they are forcing us to defend our rights once again in the face of clear and well-established rules.