Consumer complaint received 2025-11-26 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — Escrow, taxes, or insurance
Company: Shellpoint Partners, LLC
State: MN

Complaint narrative:
CFPB Complaint Mortgage Servicer Wrongfully Withholding Insurance Proceeds Company : XXXX XXXX  XXXX  / NewRez XXXX XXXX  XXXX ( loss draft servicing ) Loan Number : XXXX Property : XXXX XXXX XXXX, XXXX, MN XXXX Summary of the Issue : My mortgage servicer is repeatedly and unlawfully withholding my insurance loss draft funds after my home was destroyed by flooding. I can not rebuild or place the replacement home until these funds are released, and the servicer is adding unauthorized conditions each time I comply with their prior requests. 

What Happened : My home was declared a total loss due to flooding. 

Insurance issued a loss draft made payable to me and the mortgage company. 

I submitted all required claim documentation. 

I provided the location of the replacement home on higher ground as USDA requires. 

I provided access and approval for any necessary inspections. 

Despite meeting all requirements, the servicer refuses to release the funds and is engaging in the following unlawful behavior : XXXX. Adding moving target conditions not in my mortgage contract They have repeatedly created NEW, unauthorized requirements such as : Demanding that the old home be fully cleared and leveled before releasing insurance funds Demanding personal financial information ( bank statements, proof of cash reserves, income verification ) Demanding proof of how I will pay any difference in cost between old and new home Requiring site clearing before funds are disbursed, which is impossible since funds are needed to complete demolition and setup None of these demands exist in my mortgage, security instrument, USDA regulations, or loss draft agreements. 

XXXX. Violations of RESPA ( 12 CFR 1024.41 ) They are : Creating unreasonable delays Continuously adding new conditions Engaging in bad-faith servicing practices Withholding insurance funds without legal basis XXXX. Violations of USDA Servicer Requirements ( Handbook XXXX Chapter XXXX ) Under USDA loss draft rules, servicers may : Verify damage Confirm replacement/repair Inspect the property They may NOT : Demand personal financial disclosures Require demolition prior to funds release Withhold funds because the borrower declines to provide bank statements Invent new conditions after a file is complete 4. Financial Harm The servicers delay has prevented me from : Placing the replacement home Removing the destroyed structure Restoring the property for safe habitation Beginning construction Rebuilding after a federally recognized disaster XXXX. Requested Relief I request that CFPB require the servicer to : Immediately release the loss draft funds Cease adding unauthorized conditions Provide documentation of any legal or contractual authority for withholding funds Correct their servicing violations This situation is urgent and causing severe financial and emotional distress.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation