Consumer complaint received 2026-01-23 00:00:00
Product: Debt collection — Mortgage debt
Issue: False statements or representation — Attempted to collect wrong amount
Company: Shellpoint Partners, LLC
State: PA

Complaint narrative:
mortgage loan for the Property originated on or about XX/XX/XXXX, with a fixed interest rate of approximately 3.6 % and a regular principalandinterest payment of approximately XXXX XXXX twentyfour dollars ( {$520.00} ) per month. 
XXXX. A XXXX Form XXXX Mortgage Interest Statement issued to Defendant by XXXX XXXX XXXX XXXX XXXX XXXXXXXX ) reflects that, as of XX/XX/XXXX, the outstanding mortgage principal balance was approximately {$100000.00} and that Defendant paid approximately {$3700.00} in mortgage interest during tax year XXXX. 
XXXX. XXXX servicing records reflect that XXXX received a total of ninetynine ( XXXX ) regular monthly mortgage payments from Defendant prior to the hardship that began in XXXX, evidencing a long history of ontime payments. 
XXXX. Defendant remained current on the mortgage for several years and did not miss any payment until XX/XX/XXXX, when he first experienced significant hardship and was unable to make the XX/XX/XXXX payment reasons related to XXXX. 
XXXX XXXX PAYMENT DEFERRAL AGREEMENT XXXX. On or about XX/XX/XXXX, Defendant entered into a written Payment Deferral Agreement with XXXXXXXX XXXX XXXX XXXX XXXX XXXXXXXX  ( the Deferral Agreement ) regarding the mortgage loan secured by the Property. 
XXXX. Under the XXXX XXXX, XXXX agreed to defer XXXX ( XXXX ) principalandinterest payments, totaling approximately {$7300.00}, by moving those missed payments to the end of the loan as a deferred, noninterestbearing balance. 
3. The Deferral Agreement provided that the deferred amount would not be added to the interestbearing principal and would instead become due upon sale of the Property, payoff or refinance of the loan, or on the original maturity date of the note, without adding any new months to the loan term.

4. The Deferral Agreement further provided that, once the deferral became effective, the correct interestbearing principal balance due under the loan documents would be approximately {$92000.00}, and that any thenoutstanding late charges would be waived by the servicer as per Covid rules and guidelines. 
5. Under the Deferral Agreement, regular payments were to resume with the XX/XX/XXXX installment ; however, Defendants Covid hardship continued, and he struggled to maintain payments after that date. 
D. TRANSFER TO XXXX XXXX XXXX, PRINCIPAL ERRORS XXXX. On or about XX/XX/XXXX, servicing of Defendants mortgage was transferred from XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 
XXXX. At the time of this transfer, there remained an outstanding delinquency of approximately XXXX ( XXXX ) monthly payments, ( XX/XX/XXXX XX/XX/XXXX ) totaling about {$3600.00}, in addition to the separate deferred balance of {$7300.00} that XXXX had already placed at the back of the loan pursuant to the Deferral Agreement. 
XXXX. From XX/XX/XXXX through XX/XX/XXXX, Defendant missed an additional twelve ( 12 ) monthly payments of {$520.00} each, totaling approximately {$6200.00}. Combined with the earlier seven missed payments, the total missed payments amounted to approximately {$9900.00}, separate and apart from the deferred balance. 
XXXX. The correct terms at the time XXXX began servicing in or about XX/XX/XXXX should have reflected : ( a ) an interestbearing principal balance of approximately {$92000.00} ; ( b ) a noninterestbearing deferred balance of {$7300.00} payable only at payoff, sale, or maturity ; ( c ) a regular principalandinterest payment of {$520.00} per month ; and ( d ) a fixed interest rate of approximately 3.6 %. 
XXXX. From the time XXXX began servicing the loan, the principal balance reflected on XXXX statements and records has been incorrect. XXXX treated all or part of the deferred amount and other charges as interestbearing principal and continued to inflate the principal balance by approximately {$520.00} each month, contrary to the Deferral Agreement and the note and mortgage. 
6. These servicing and accounting errors caused the stated principal balance, arrears, and payoff figures to be materially overstated and formed part of the basis for the acceleration and foreclosure against Defendant. 
E. PAHAF REINSTATEMENT ASSISTANCE 1. Due to the ongoing hardship, Defendant applied for assistance through the Pennsylvania Homeowner Assistance Fund ( PAHAF ), which is administered to help homeowners cure mortgage delinquencies and prevent foreclosure. 
XXXX. On or about XX/XX/XXXX, Defendant was approved for PAHAF reinstatement assistance. PAHAF issued a direct payment in the amount of approximately {$29000.00} to the servicer to reinstate the mortgage, pay all missed payments, and cure related tax deficiencies. Taxes total paid included XXXX, XXXX, XXXX totaling {$12000.00}. 
XXXX. The PAHAF reinstatement funds were intended to bring the loan fully current based on the correct interestbearing principal balance established by the XXXX Deferral Agreement and the actual number and amount of missed payments and tax obligations. 
XXXX. Instead of applying the PAHAF reinstatement funds in accordance with the Deferral Agreement and PAHAF program intent, XXXX applied those funds to an improperly inflated and overstated principal balance and other amounts that should not have been capitalized, leaving the account inaccurately reported and not properly reinstated. 
F. PAHAF FORWARD MORTGAGE ASSISTANCE 1. After the reinstatement, Defendant was also approved for PAHAF forward mortgage assistance. Under that approval, once the mortgage was reinstated, the outstanding delinquency was brought to zero, and forward assistance would be paid directly to the servicer to cover future monthly payments. 
2. Pursuant to this forward assistance approval, PAHAF sent to the servicer two bulk payments of approximately {$3600.00} each, totaling approximately {$7200.00}. These funds were expressly intended to cover multiple future monthly mortgage installments at the minimum principalandinterest payment of {$520.00} per month, plus applicable escrow. 
3. At that time, the regular principalandinterest payment remained {$520.00} per month, with an additional escrow amount for taxes and insurance collected along with the monthly mortgage payment.

4. Under PAHAF rules, forward mortgage assistance is only approved when the mortgage and related property charges are current at the time forward assistance begins. Consequently, Defendants approval for forward assistance confirms that, following the PAHAF reinstatement, the mortgage and taxes were intended to be fully current. 
G. TRANSFER TO SHELLPOINT AND MISAPPLICATION OF PAYMENTS 1. After the PAHAF assistance was provided, the servicing rights were transferred from XXXX to Shellpoint Mortgage Servicing ( Shellpoint ), which assumed responsibility for the account.

2. When Shellpoint took over servicing, it failed to properly credit the PAHAF reinstatement funds, the PAHAF forwardassistance bulk payments, and the {$7200.00} intended to cover monthly payments were not properly credited each month nor did Shellpoint acknowledge any previous accounting ledger regarding account. 
3. Shellpoint and XXXX XXXX XXXX continued to issue multiple statements reflecting different alleged amounts for the same months ; none of which correctly applied the PAHAF funds to the regular monthly payments and escrow or honored the XXXX  Deferral Agreement or correctly apply funds to the Principal Balance of {$92000.00}. 
4. both XXXX and Shellpoint misapplied the PAHAF reinstatement and forwardassistance funds, improperly capitalized amounts into principal, and failed to recognize that the account should have been current, leading to an artificially inflated principal balance, inaccurate arrears, and erroneous default status.

5. Because of these errors, the loan has been wrongly treated as delinquent and placed into foreclosure even though substantial stateadministered funds were specifically provided to cure the arrears and maintain current payments.

H. CURRENT HEMAP APPLICATION 1. In addition to the PAHAF assistance described above, Defendant has applied for relief under the Pennsylvania Homeowners Emergency Mortgage Assistance Program ( HEMAP ) through the Pennsylvania Housing Finance Agency. 
2. Defendant met with a housing counselor and submitted a HEMAP application in or about XX/XX/XXXX. The application is currently under review and processing, and Defendant is actively cooperating with all requests for information.

3. If Defendants HEMAP application is approved, HEMAP funds are expected to bring the mortgage fully current and/or provide ongoing assistance, resolving the default and rendering a Sheriffs Sale unnecessary. 
I. XXXX FORM XXXX, TAXES, AND ACCOUNTING DISCREPANCIES XXXX. Defendant received a XXXX Form XXXX Mortgage Interest Statement from XXXX XXXX XXXX XXXX XXXX  ) showing that, for tax year XXXX, mortgage interest in the amount of approximately {$11000.00} was received, and real estate taxes in the amount of approximately {$12000.00} were paid from escrow. 
XXXX. As of XX/XX/XXXX, pastdue mortgage payments totaled approximately {$8200.00} and were reimbursed in full by the PAHAF reinstatement payment, and in or about XX/XX/XXXX, school taxes in the approximate amount of {$2900.00} were also paid, with no XXXX taxes paid from escrow. The taxes XXXX, XXXX ( {$8200.00} + {$2900.00} = approximately {$11000.00} ) do not match the {$12000.00} in taxes reported on the XXXX Form XXXX, creating an unexplained discrepancy of nearly {$1000.00} in reported tax disbursements. 
3. In total, the outstanding balance of missed payments prior to reinstatement was approximately {$9900.00}, and the XX/XX/XXXX PAHAF reinstatement paid approximately {$29000.00} to XXXX XXXX XXXX  When the correct amounts for missed payments and taxes are subtracted ( {$29000.00} {$9900.00} {$11000.00} ), approximately {$8500.00} should have remained available to apply to the loan in accordance with program terms. Instead, those funds appear to have been applied toward inflated principal and escrow figures even though XXXX taxes were never paid from escrow, leaving both the principal balance and escrow accounting inaccurate. 
4. PAHAF forward mortgage assistance was then approved and, as a condition of that forward assistance, the mortgage and property charges were required to be current at the time forward assistance began. After approval, two bulk payments of approximately {$3600.00} each ( totaling approximately {$7200.00} ) were sent to the servicer to cover future monthly payments in the minimum amount of {$520.00} per month, plus escrow, once the loan was current. 
5. When the servicing mortgage from XXXX XXXX XXXX to Shellpoint Mortgage Servicing in or about XX/XX/XXXX, the forwardassistance payments and the credits they represented were not properly carried over or applied correctly .. Shellpoint advised me that it did not have complete accounting for the prior servicers activity, and from that point forward Defendant began receiving conflicting statements showing differing amounts allegedly due for the same months, conflicting YTD amounts and not giving full credit for the XXXX forwardassistance funds. 
XXXX. In response, I sent a Qualified Written Request / Request for Information under federal mortgageservicing laws, asking Shellpoint to validate the debt and provide a detailed transaction history and explanation of how all payments, PAHAF funds, and escrow disbursements had been applied and proof that they had Chain of Title .. Shellpoints written response did not provide a complete, transactionlevel accounting or reconcile the inconsistencies in the Form XXXX, escrow activity, and principal balance, and instead further confused the status of the loan without offering a substantive correction. 
7. These unresolved discrepancies in the XXXX Form XXXX, escrow and tax disbursements, application of PAHAF reinstatement and forwardassistance payments, and incomplete responses to Defendants written accounting requests demonstrate that the current principal, interest, escrow, and arrears claimed by Plaintiff and its servicers are unreliable. Defendant therefore disputes the accuracy of the amounts underlying the foreclosure judgment and alleges that the foreclosure and scheduled Sheriffs Sale are based on erroneous and inflated figures. 
Practical next steps for you : J. PREMIATURE AND INEQUITABLE FORECLOSURE 1. The foreclosure and scheduled Sheriffs Sale are premature because : a. servicers have not accurately accounted for the XXXX Deferral Agreement and its resulting principal and deferred balances ; b. PAHAF reinstatement and forwardassistance funds, totaling tens of thousands of dollars, were misapplied ; c. There are multiple conflicting account statements with different alleged amounts due for the same periods ; and have failed provide proof that the Mortgage and the Note have not been separated along with a chain of title. 
d. Defendants HEMAP application is currently pending and, if approved, will resolve the delinquency.

1. Proceeding with a Sheriffs Sale under these circumstances would cause irreparable harm by dispossessing Defendant of his home while the stateauthorized lossmitigation process is still pending and the true account status remains disputed.

2. Servicer will suffer little or no prejudice from a short postponement of the Sheriffs Sale while HEMAP renders a decision and the servicing errors are reviewed, whereas Defendant faces the loss of his primary residence and the disruption of his household if the sale proceeds. 
XXXX. The discrepancies reflected in the XXXX Form XXXX, escrow activity, and servicer responses further show that the amounts used to support the foreclosure are inaccurate and overstated XX/XX/XXXX On XX/XX/XXXX, I entered into a Payment Deferral Agreement with XXXX XXXX XXXX XXXX XXXX XXXX regarding the abovereferenced mortgage loan. Under paragraph 5 of that agreement, the interestbearing principal balance due under the loan documents was fixed at {$92000.00} once the deferral became effective. The agreement also deferred XXXX pastdue installments totaling {$7300.00} without requiring monthly payments on the deferred balance until maturity, refinance, sale, or payoff

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