Consumer complaint received 2025-11-08 00:00:00
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — Payment process
Company: Shellpoint Partners, LLC
State: TN

Complaint narrative:
Servicing Manipulation Through Dual-System Reporting Finding : Analysis of borrower portal data from XX/XX/XXXX XX/XX/XXXX, reveals that NewRez LLC and its subservicer Shellpoint Mortgage Servicing, both controlled by XXXX XXXX XXXX , maintained conflicting digital records for the same VA-guaranteed loan XXXX No. XXXX ). 

The NewRez portal reflected the account as current, while the Shellpoint portal simultaneously reflected delinquency, late fees, and a negative escrow balance. Both systems displayed the identical principal balance ( {$580000.00} ) and property information, confirming that they draw from the same master data repository. This shows deliberate dual-system manipulation, not an isolated clerical error. 



Evidence : 1. Recorded call logs and transcripts ( XX/XX/XXXX XX/XX/XXXX ) confirm Shellpoint representatives repeatedly acknowledged holding {$12000.00}, later corrected to nearly {$100000.00}, in unapplied fundspayments received but not credited to the loan. 
2. Shellpoint Cure Default letter ( XX/XX/XXXX ) demanded {$6800.00} by XX/XX/XXXX while records proved the borrower was fully paid through that date. 
3. Portal captures from both NewRez and Shellpoint show contradictory account statuses within the same billing cycle. 
4. CFPB complaint chain ( XXXX. XXXX through XXXX ) documents consistent ledger falsification, delayed posting, and repeated non-responses to statutory Notices of Error. 
5. XX/XX/XXXX call recording specifically references an account balance discrepancy of {$3900.00} versus {$4000.00} and confirms the servicers own admission that an escalation complaint was filed due to incorrect figures. 



Interpretation : This dual-reporting practice constitutes a systemic servicing manipulation scheme, wherein XXXX-controlled entities distort loan performance data for profit. 
Externally, the portfolio appears performing, sustaining XXXX reported servicing income and securitization valuations. 
Internally, borrowers are shown as delinquent, generating illegal late-fee revenue and foreclosure leverage. 

These acts violate multiple federal provisions : 12 C.F.R. 1024.35 ( b ) ( 1 ) failure to credit payments as of the date received ; 12 C.F.R. 1026.36 ( c ) ( 1 ) misapplication of payments ; 12 U.S.C. 5531 ( a ) unfair, deceptive, or abusive acts ( UDAAP ) ; 15 U.S.C. 1692e ( 2 ) ( A ) false representation of debt ; and 18 U.S.C. 1344 ( 1 ) bank fraud via manipulation of custodial funds and investor reporting. 

Supporting precedents include : XXXX v. XXXX XXXX  XXXX, XXXX XXXX XXXX. XXXX XXXX ( XXXX XXXX XXXX ) ; XXXX XXXX XXXX XXXX  XXXX, XXXX XXXX XXXX ( XXXX XXXX La. XXXX ) ; and CFPB XXXX XXXX XXXX XXXX, XXXX ( consent order ). 
Each confirms servicer liability for misapplication and dual-ledger deception under RESPA and TILA.

Risk Impact and Damages : The harm from this manipulation is quantifiable and severe : 1. Financial Damages {$100000.00} Unapplied Funds : These are payments made in good faith, sequestered by the servicer in suspense accounts in violation of 12 C.F.R. 1026.36 ( c ) ( 1 ). The funds should have been immediately credited to principal, reducing long-term interest accrual and amortization costs. 
2. Derivative and Consequential Damages {>= $1,000,000} : This figure is substantiated by measurable and foreseeable consequences of the servicers unlawful conduct, including : Credit impairment and reputational injury : False delinquency reporting to credit bureaus, lowering XXXX scores and obstructing refinancing or VA program eligibility. 
Emotional and psychological harm : Threatening letters and cure default notices received despite confirmed payments, constituting harassment under the FDCPA and CFPB consent orders. 
Legal exposure and litigation costs : Continuous need to file CFPB, XXXX XXXXXXXX, and AG complaints, compile forensic evidence, and retain counsel due to Shellpoints systemic non-response. 
Time-value losses : Deprivation of use of approximately {$100000.00} in funds since first misapplication. 
Market impact : Damage to borrowers standing with federal guarantors ( VA/HUD ) and impairment of property equity, causing long-term asset depreciation. 
These harms fall squarely within compensatory and punitive categories recognized under : 12 U.S.C. 2605 ( f ) ( actual damages + additional statutory up to {$2000.00} per violation ), 15 U.S.C. 1692k ( a ) ( actual and punitive damages for FDCPA violations ), and Common-law tort precedents for bad-faith servicing ( XXXX XXXX XXXX XXXX  XXXX XXXX XXXX XXXX XXXX XXXX XXXX ( XXXX XXXX. XXXX ) ). 

Accordingly, total damages are now quantified as : {$100000.00} ( principal misapplied ) + {>= $1,000,000} ( consequential, statutory, reputational, and punitive ) = {>= $1,000,000} aggregate claim.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation