Consumer complaint received 2025-03-24 00:00:00
Product: Mortgage — FHA mortgage
Issue: Struggling to pay mortgage — Trying to communicate with the company to fix an issue related to modification, forbearance, short sale, deed-in-lieu, bankruptcy, or foreclosure
Company: Shellpoint Partners, LLC
State: CA

Complaint narrative:
Loan # XXXX XX/XX/2025 To Whom It May Concern, We are writing to formally express our concern and dissatisfaction regarding the recent loan modification offered by Shellpoint Mortgage Servicing in conjunction with HUD assistance. 

While we were approved for a HUD Partial Claim which we understand is meant to defer missed payments until we sell or refinance our home the modification that accompanied it is both unreasonable and harmful. Rather than receiving the financial relief promised, we are now facing a 40-year loan term with an interest rate significantly higher than our original mortgage.

According to HUD guidelines, loan modifications are intended to help struggling homeowners by reducing monthly payments and preventing foreclosure. However, in our case, the monthly payment under this so-called relief plan has actually increased. The combination of a longer loan term and a higher interest rate has made our financial situation worse, not better. 

This outcome is unacceptable. It appears that Shellpoint is using a bundled option ( HUD Partial Claim + loan modification ) that ultimately traps borrowers in extended debt while claiming to offer assistance. We were not presented with alternative solutions such as a stand-alone HUD Partial Claim despite our ability to resume payments under our original terms. 

We respectfully request a full review of our loan modification package, including : - A detailed explanation of how the new payment amount was calculated. 
- The justification for the increased interest rate.

- An assessment of whether a HUD Partial Claim-only option would meet FHA guidelines and allow us to retain a manageable payment without a burdensome modification.

If this matter is not resolved promptly and fairly, we will have no choice but to escalate this complaint to the U.S. Department of Housing and Urban Development ( HUD ), the Consumer Financial Protection Bureau ( CFPB ), and any relevant legal or housing advocacy agencies. 

We appreciate your immediate attention to this matter and look forward to your prompt response. 

Sincerely, XXXX and XXXX XXXX Please see below : What youre describing is a HUD Partial Claim + Loan Modification Combo, which is a common but not required setup and yes, HUD can be just one option on its own.

Lets break it down so you can see where the issue is : What You Got : HUD Partial Claim + Loan Modification HUD Partial Claim : Covers your missed payments ( arrears ) and puts them in a silent 2nd lien ( no interest, no payments ).

You dont repay it until you sell, refinance, or pay off the loan.

This part is actually favorable it delays repayment and avoids foreclosure.

The Issue : Loan Modification ( 40-Year Term + Higher Interest Rate with Shellpoint Mortgage ) Instead of helping, the loan mod increased your interest rate and extended the loan to 40 years.

Result : Your new monthly payment is higher, and total repayment over time is much greater which defeats the purpose of relief.

So, Can HUD Be Used Without the Loan Modification?

Yes.

If the Partial Claim alone brings the loan current and keeps your payment affordable, it can be used without a modification.

But many servicers ( like Shellpoint ) bundle the two sometimes unnecessarily to " check the box '' for investors.

The problem? It creates a predatory setup : your back payments are deferred ( good ), but your monthly payment becomes higher due to the mod terms ( bad ).

You Have the Right to Challenge This If : The new payment is not affordable or higher than your previous one.

Shellpoint didnt offer or explain alternatives ( such as Partial Claim only or short-term forbearance ).

The interest rate is above market average, especially if you're being told this is your " only option. '' What You Can Do : Request a detailed breakdown of how they calculated your " modified '' payment and why they chose that rate/term.

Ask if a Partial Claim-only option is possible especially if your income allows you to resume original payments.

File a complaint with : HUDs National Servicing Center Consumer Financial Protection Bureau ( CFPB )

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