Consumer complaint received 2020-07-23
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: Shellpoint Partners, LLC (NC)

Complaint 3 The petitioner request the CFPB Management Supervision for this complaint in connection with the two previous complaints, case id ( s ) XXXX & XXXX XXXX. 

The petitioner argues, the respondent has not honored the question relating to the part of the debt in arears of {$1500.00}. The respondent can not explain in clear and plain language where four months of arrears are situated in the 48-month tenure of this loan servicer. At best, the petitioner argues, he was 1 to 2 months behind, but before the 2nd month came up a payment was made. The XX/XX/XXXX, payment was made, but the servicer halted the XX/XX/XXXX, payment till the TPP schedule the XX/XX/XXXX, plan. Time is critical when XXXX has imposed time-limit on a forbearance agreement, where the respondent seems to be buying the time. 

This petitioner comes before the CFPB in complaint 3, that respondent Shellpoint Servicing, Escalation Dept, denies the petitioner the soundness granted by the policymakers of RESPA, REGULATION X, AND 12 CFR 1024, ETC. The petitioner believes, he has the right to pursue this claim under the CFPB, and should be allowed all privileges due according to the public regulations. The petitioner believes, he was abused by unfair business practices, when the loan servicers completed the loan modification process including the TPP. The petitioner believes, the loan servicer was obligated to disclose any information pertinent to this loan modification, in-progress, including an upcoming transfer. This petitioner believes he was held in the dark, by the way of deceit when all of a sudden, the loan transferred injuring the petitioner in the amount {$2000.00}, which is now the subject of XXXX XXXX XXXX, the new loan servicer. This injury subjects the petitioner to unwanted forbearance which warps the petitioners budget wrongly. Forbearance is a deduction in status and not same as a loan modification agreement, which was established by the successful completion of the TPP in XX/XX/XXXX. The institution of papers signing is the responsibility of the loan servicer not the successor. Like all documents which are ordinarily forwarded to the subject address and fees charged, this one too, should had undergone the same procedure. So, there is really no underlining excuse such as given to XXXX, that the petitioner failed to sign the assumption agreement. This is unacceptable. 

This petitioner believes as a result of the aforementioned act committed by the respondent, the respondent violated negligence by not giving the proper duty of care to this transfer. Nor does the respondent acknowledge, this gallant duty of care, in the two previous complaints. 

Courts are just beginning to consider the general rights of homeowners to be evaluated for a loan modification. Indeed, the CFPBs regulations requiring loss mitigation procedures and enforceable by private right of action only took effect in XX/XX/XXXX. XXXX. Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act ( Regulation X ), XXXX Fed. XXXX. XXXX, XXXX ( XXXX XXXX, XXXX )  ( codified at XXXX C.F.R. pt. XXXX ). XXXX, There has scarcely been time to reach court decisions on those rules. Extending the evaluation right to successor homeowners is a topic even fewer courts have addressed. XXXX of the first cases to consider the rights of successor homeowners to evaluation for a loan modification was XXXX v. XXXX XXXX XXXX XXXX, XXXX. XXXX. No. XXXX, XXXX WL XXXX, at XXXX ( E.D. XXXX. XXXX XXXX, XXXX ). XXXX XXXX inherited a home as the successor trustee to her mothers trust after her mother, the original borrower, passed away XXXX. Id. XXXX notified XXXX of the borrowers death and communicated with XXXX for many months in an attempt to obtain a loan modification. XXXX. Id. at XXXX. XXXX sent multiple letters to XXXX XXXX, XXXX deceased mother, as XXXX XXXX XXXX XXXX XXXX soliciting a loan modification application. XXXX. Id. at XXXX. Then XXXX sent a loan modification offer letter to XXXX XXXX XXXX XXXX. XXXX. Id. XXXX signed and returned the modification trial plan offer and made all three payments, only to be told by XXXX that she was denied for the modification because she was not the borrower. XXXX. Id. The court allowed XXXX to proceed with claims for negligence and unfair practices and found she had pled facts supporting a breach of the duty of care in the loan modification process. XXXX. Id. at XXXX, XXXX. The XXXX court offers an indirect approach to the problem of successor homeowners based on the intuitive unfairness of servicer conduct in these situations, XXXX. See id. at XXXX but the court did not conduct an analysis of the underlying legal rights of the parties. XXXX. XXXX id. at XXXX. The Texas federal district court in XXXX XXXX XXXX XXXX, XXXX. XXXX. XXXX XXXX XXXX. XXXX XXXX ( S.D. XXXX. XXXX ) offers the clearest and most coherent analysis of the relationship between a loan modification and an assumption. In that case, the court found that once the successorthe daughter of the original borrowerassumed, she stepped into the shoes of the mortgagor, with all the rights and responsibilities of the original borrower. XXXX. Id. at XXXX. These rights included the right to cure a default, right to receive a notice of any breach, and full authority to negotiate a loan modification agreement, even though the mortgage was in default at the time. XXXX. Id. at XXXX. Analytically, this approach makes sense. Upon assumption, the successor homeowner becomes the borrower with all the attendant rights and obligations. XXXX. XXXX id Mortgage modifications are routinely negotiated for borrowers who are in default, and the successor status of the borrower is not, in itself, a bar to a work out arrangement. At least XXXX bankruptcy court has agreed and permitted the successor homeowner to participate in a court sponsored loss mitigation program. XXXX. In XXXX XXXX, XXXX B.R. XXXX, XXXX XXXX XXXX. S.D.N.Y. XXXX ). In a cursory settlement conference decision, however, a New York state judge dismissed the argument that the XXXX XXXX exclusions give successor homeowners the right to be considered for a loan modification. XXXX. XXXX Bank XXXX XXXX, XXXX XXXX XXXX, XXXX XXXX Sup. Ct. XXXX ). The homeowner apparently had not assumed the loan in that case, and the judge relied on the lack of privity between the parties in holding that the borrower had no right to be evaluated for a loan modification. XXXX. But see In re XXXX, XXXX B.R. at XXXX ( rejecting the privity argument in the bankruptcy context and finding that a successor homeowner, protected from the exercise of the due-on-sale clause under the XXXX XXXX XXXX, was entitled to participate in a court-sponsored loss mitigation program ). The decision leaves open the possibility that if the homeowner had assumed the loan, like the homeowner in XXXX, the court might have reached a different result. XXXX. XXXX XXXX, XXXX XXXX at XXXX. As it stands, the courts decision flies in the face of guidance issued by XXXX XXXX, XXXX XXXX, and the Treasury Department requiring that successor homeowners be evaluated for a loan modification as if they were the original borrower and that an assumption be processed. XXXX. Muse-Evans, XXXX note XXXX, at XXXX ( successor homeowner must be evaluated for loan modification as if borrower and packet should be forwarded to XXXX XXXX for modification review and related assumption ) ; XXXX XXXX XXXX, XXXX note XXXX ( requiring simultaneous modification and assumption ) ; XXXX XXXX, XXXX note XXXX, at XXXX. For the programs they oversee, XXXX XXXX, XXXX XXXX, and the Treasury Department require servicers to evaluate successor homeowners for a loan modification and, if approved, to simultaneously process the modification and then and an assumption. XXXX. Muse-Evans, XXXX note XXXX, at XXXX ; XXXX XXXX XXXX, XXXX note XXXX ; XXXX XXXX, XXXX note XXXX, at XXXX. This requirement is imposed so that successor homeowners can know in advance of assumption whether or not the servicer will approve the homeowner for a loan modification and what the terms of that modification will be. XXXX. XXXX XXXX v. Bank XXXX XXXX XXXX, XXXX XXXX. Rptr. XXXX XXXX, XXXX ( Ct. App. XXXX ). For most homeowners, it makes no sense to assume a mortgage loan that is in default with unaffordable payments unless an affordable loan modification is assured. XXXX. See XXXX XXXX, Mortgage Modification Defaults Occur for XXXX in XXXX Borrowers, Study Says, XXXX XXXX XXXX XX/XX/XXXX, XXXX PM ), http : XXXX XXXX. When servicers require assumption before evaluation and block assumption on the basis of default status, successor homeowners are trapped. XXXX. See XXXX XXXX, Guidelines Help Heirs Assume and Modify Loans, XXXX XXXX XXXX XXXX XXXX, XXXX XXXX, XXXX : XXXX loans.html? _ XXXX. Recognizing this XXXX, XXXX  XXXX, XXXX XXXX, and the Treasury Department in its XXXX XXXX have all instituted procedures where a successor homeowner is evaluated for a loan modification before being required to assume the mortgage. XXXX. XXXX XXXX XXXX XXXX3, XXXX note 49 ; XXXX XXXX, XXXX note 99, at 129 ; XXXX-XXXX, supra note 49, at 1. Unfortunately, many servicers have not caught up with these policies and have continued to spread misinformation about the rights of successors to apply for a loan modification before assuming the loan. XXXX. XXXX XXXX, XXXX note XXXX Successors continue to report being told that the servicer can not talk with them about the loan or evaluate them for a modification because they are not the borrower, so many successor homeowners have found relief from bankruptcy courts. XXXX. See infra XXXX VI XXXX for bankruptcy de-accelerates the debt, which allows the successor to cure the default. XXXX. XXXX, XXXX, XXXX XXXX XXXX, XXXX. XXXX, XXXX WL XXXX, at XXXX XXXX XXXX XXXX XXXX XXXX XXXX ) ; In re XXXX, XXXX B.R. XXXX, XXXX ( XXXX. D.S.C. XXXX ). The use of bankruptcy to protect the rights of successor homeowners is the subject of the following Part. 

So, again the question stands to whether this case, that is, loan # XXXX involving XXXX XXXX. XXXX, mortgagor, and successor XXXX XXXX XXXX, heir v. Shellpoint Mortgage Servicer. Here the petitioner persists the loan modification of XX/XX/XXXX, progressed through the Trial Period Plan, but then was interfered with misinformation, delays and indecisiveness. It does not excuse the negligence to go forward with a transfer abruptly without making the successor aware of the seriousness involved, and vulnerabilities at stake concerning the shortness of time before the transfer is to take effect. There is no excuse for not discussing thoroughly in the months of XXXX and XX/XX/XXXX, the approaching of a transfer. As it is alleged, the transfer was done in secret, and was deceitful. There are how days in XXXX., that silence exist when we should be talking. Nowhere in the files or tapes, can Shellpoint or its representatives verify that this disclosure was properly administered. This homeowner had every right to have this information and understanding to the future of this loan, and should not be legally denied. That the courts do not permit the play with words in an effort shuffle into a winning position. Shellpoint  knowingly, that this misinformation would fail the budget of this petitioner, use the silence ( deceptive omission ) to through the loan into default. 

The petitioner alleges and re-iterates further, there is a great case aforementioned above for negligence and unfair business practice. In fact, the petitioner believes the XXXX XXXX XXXX XXXX Institution Act prohibits the problems Shellpoint has given this heir in loan # XXXX. 

The petitioner believes there is an element of deceit and trickery within this complaint when Shellpoint withholds the information regarding the transfer. The petitioner believes he can be heard in a court of law when this proposed deceit and cause the harm in the form of the forbearance which XXXX presents to the debt of arrears ( {$2000.00} XXXX upcoming in the next month. The deceit when defined : lying in the real world covers more than lying studied in the laboratory : lying is often done for personal or ideological gain ; it can harm the victim, and it is often carried out over a considerable span of time. More broadly, deception includes more than lying. In fact, deception can be carried out without explicit lying. 

Deception can be defined broadly as the manipulation of appearances such that they convey a false reality. However, when one tries to list a variety of deceptions and their contexts, it becomes difficult to find a common set of features that characterizes all of them. At best, the various at best, the various types of deception bear what XXXX XXXX XXXX ) calls a family resemblance to one another. Deception includes both dissimulation ( hiding or withholding information ) and simulation ( putting out wrong or misleading information ). Both deception and lying can be accomplished by omission as well as by commission. Interestingly, folk theories of deception are more likely to attach moral significance to deceptions accomplished by commission than to those accomplished by omission.