Consumer complaint received 2025-11-19 00:00:00
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — Payment process
Company: Shellpoint Partners, LLC
State: TN

Complaint narrative:
IMMINENT HARM * * * * * * * * * * * * NewRez LLC / Shellpoint Mortgage Servicing Attn : Compliance / RESPA Notice of Error XXXX XXXX XXXX, XXXX XXXX XXXX, SC XXXX Re : Renewed RESPA Notice of Error Failure to Respond, Manufactured Delinquency, Unapplied Funds, Misstated Default, Escrow Mismanagement, Improper Fees, & Systemic Misconduct Property : XXXX XXXX XXXX, XXXX, TN XXXX To Whom It May Concern : I am submitting this complaint as a renewed and expanded RESPA Notice of Error under 12 C.F.R. 1024.35, and as a formal record of your deliberate disregard of federal law. 

This notice is being submitted because you caused a prior RESPA Notice of Error to be closed as a duplicate without providing the investigation, written findings, and corrections required by Regulation X. I never received a compliant written response as required by 12 U.S.C. 2605 ( e ) and 12 C.F.R. 1024.35 ( e ). Instead, you attempted to dodge those obligations by labeling the issue duplicate while continuing the same harmful conduct. 

This letter therefore : reasserts the original errors, adds new errors based on your XX/XX/XXXX letter to the XXXX XXXX XXXXXXXX XXXX XXXX ( XXXX ), places you on notice of ongoing imminent harm to me and other borrowers, and preserves my rights for regulatory enforcement and civil remedies. 



I. Prior RESPA Notice & Improper Duplicate Closure On and before XX/XX/XXXX, I submitted XXXXqualified error notices and related complaints, including CFPB Complaint No. XXXX and others, identifying : misapplied payments, large amounts of funds held in unapplied status, a false XX/XX/XXXX Pre-Foreclosure Notice demanding roughly {$14000.00} by XX/XX/XXXX, call recordings in which your own agents admitted that only {$750.00} was due and that approximately {$12000.00} was being held in unapplied funds, and multiple, conflicting payoff and reinstatement figures. 

Instead of providing a substantive written response with findings and corrections as required by 12 C.F.R. 1024.35 ( e ), you caused the RESPA notice to be treated as a duplicate. That is not a permissible way to avoid your duties under RESPA and Regulation X. 

Your failure to provide a proper response is itself an independent and ongoing error under 12 C.F.R. 1024.35 ( b ) ( 11 ) ( failure to provide accurate information regarding the servicing of a mortgage loan ) and 1024.35 ( e ) ( failure to investigate and respond ). 



XXXX. New Documentary Evidence : Your XX/XX/XXXX XXXX Letter On XX/XX/XXXX, Shellpoint Mortgage Servicing ( on NewRez letterhead ) sent a letter to me and XXXX XXXX, copied to XXXX XXXXXXXX, referencing XXXX  Complaint No. XXXX and Loan No. XXXX. That letter : confirms NewRez GNMA II / NewRez LLC as the current owner of the loan, confirms the loan transferred to Shellpoint around XX/XX/XXXX, lists a negative escrow balance and purported escrow shortage, describes a payment hierarchy where full payments are placed in unapplied until they reach a threshold, provides a transaction history of multiple payments between XX/XX/XXXX and XX/XX/XXXX that were repeatedly placed into unapplied status, combined, reversed, and re-applied, and admits that incorrect information was provided on XX/XX/XXXX while refusing any correction, compensation, or refunds, stating that you decline my request. 

This letter confirms my allegations and documents, in your own words, multiple RESPA, FDCPA, UDAAP, and XXXX violations. 



XXXX. Enumerated Errors ( RESPA Notice of Error 12 C.F.R. 1024.35 ) Pursuant to 12 C.F.R. 1024.35 ( b ), I identify the following specific errors. This list is cumulative and incorporates all prior notices. 

XXXX. Failure to Properly Acknowledge and Respond to Prior Notices of Error You failed to provide a timely written acknowledgment and compliant written response to my prior Notices of Error, including those incorporated into CFPB Complaint No. XXXX and related complaints. 
Labeling them duplicates without substantive investigation or written findings does not satisfy 12 C.F.R. 1024.35 ( d ) ( e ).

This is an ongoing violation of 12 U.S.C. 2605 ( e ) and 12 C.F.R. 1024.35 ( e ) ( 1 ) ( i ) ( AD ). 

XXXX. Misapplication of Payments & Illegal Use of Unapplied Funds/ Suspense Your XXXX letter admits that, beginning in XX/XX/XXXX, you : placed multiple full payments ( e.g., {$1000.00}, {$2000.00}, {$3000.00}, {$4000.00} ) into unapplied status, combined unapplied funds with later payments to create full payments, reversed posted payments ( for example, the XX/XX/XXXX and XX/XX/XXXX payments ) and moved them back into unapplied, leaving the loan artificially delinquent, and applied funds first to fees rather than in the required order of principal, interest, and escrow. 

These practices constitute payment application errors and failure to apply payments to principal, interest, and escrow under 12 C.F.R. 1024.35 ( b ) ( 1 ) ( i ) ( ii ) and violate 12 U.S.C. 2605 ( k ) ( 1 ) ( C ). 

Relevant authority includes, for example : XXXX XXXX XXXX XXXX XXXX, XXXX XXXX XXXX ( XXXX. XXXX XXXX ) ( servicer liability for failure to apply payments and issuing false default notices ). 
XXXX XXXX XXXX XXXXXXXX XXXX  XXXX, XXXX XXXX XXXX. XXXX XXXX ( XXXX XXXX. XXXX ) ( unapplied funds as RESPA violation ). 
XXXX XXXX NewRez LLC, XXXX XXXX XXXX ( D.N.M. XXXX XXXX, XXXX ) ( NewRez liability for mishandling suspense accounts and misleading borrowers ). 
XXXX v. NewRez LLC, No. XXXX ( XXXX. XXXX XXXX ) ( sufficient facts pled where NewRez failed to properly credit payments under 12 C.F.R. 1024.35 ). 

XXXX. False Default, False Delinquency, and Threat of Foreclosure You issued an XX/XX/XXXX Pre-Foreclosure Notice demanding approximately {$14000.00} by XX/XX/XXXX to avoid foreclosure. 
On an XX/XX/XXXX recorded call, your own agent admitted that the actual amount due was only {$750.00} and that approximately {$12000.00} was being held in unapplied funds. 
Your XXXX letter confirms that multiple payments were sitting in unapplied status rather than properly applied. 

Issuing a foreclosure threat and default notice under these conditions : violates 12 C.F.R. 1024.35 ( b ) ( 1 ) & ( b ) ( 2 ), constitutes false representation of the amount and status of a debt under 15 U.S.C. 1692e ( 2 ) ( A ) and 1692e ( 5 ) ( FDCPA ), and is an unfair and deceptive act or practice under 12 U.S.C. 5531 & 5536 ( Dodd-Frank UDAAP ). 

XXXX. Improper & Unauthorized Inspection Fees Your XXXX letter discloses at least XXXX property inspection fees ( e.g., {$25.00} on or about XX/XX/XXXX and another on XX/XX/XXXX ), as well as additional inspection costs. 

Because the delinquency reflected on your system is itself manufactured by mishandled payments and unapplied funds, these inspection fees were : not expressly authorized by the agreement nor permitted by law, violating 15 U.S.C. 1692f ( 1 ) ( FDCPA ), and unfair and abusive under 12 U.S.C. 5531, because they stem from your own accounting misconduct. 

XXXX. Escrow Mismanagement & Shortage Calculation Errors Your letter asserts an escrow shortage and explains that escrow was adjusted to recover that shortage. However : my escrow account shows inconsistent balances and unexplained debits, taxes and insurance were fully paid and current, and you removed or reclassified funds in a way that can not be reconciled with a normal escrow analysis under 12 C.F.R. 1024.17.

This is an escrow account error under 12 C.F.R. 1024.35 ( b ) ( 3 ) and a violation of 1024.17 ( k ). 

XXXX. Incorrect Credit Reporting & Failure to Correct You reported derogatory information to consumer reporting agencies consistent with your manufactured delinquency. Once notified of your servicing errors and provided with call recordings and evidence, you failed to : correct the reporting, or conduct a reasonable investigation. 

This is : a servicing error under 12 C.F.R. 1024.35 ( b ) ( 9 ) ( 10 ), and a violation of 15 U.S.C. 1681s-2 ( a ) & ( b ) ( FCRA ) once you received disputes via CFPB/TNDFI and directly from me. 

XXXX. Misrepresentations to Regulators and Investors Your written responses to CFPB and to XXXX, along with your wrong company replies in multiple CFPB complaints, are inconsistent with : your XXXX  letter confirming that NewRez XXXX Shellpoint services my VA loan, and public statements by XXXX XXXX XXXX and NewRez leadership acknowledging the relationship between XXXX, NewRez, and Shellpoint. 

Providing conflicting descriptions of ownership, servicing responsibility, and ledger accuracy to regulators while continuing collection activity is : a servicing error under 12 C.F.R. 1024.35 ( b ) ( 11 ), a deceptive practice under 12 U.S.C. 5531 & 5536, and relevant to potential securities issues under SEC Rule 10b-5, as it masks material servicing deficiencies from investors and regulators. 

XXXX. Pattern or Practice of Noncompliance & Imminent Harm to Others Your refusal to correct acknowledged errors, your written admission of incorrect information in the XX/XX/XXXX quote, and your categorical decline to adjust or refund misapplied funds demonstrate a pattern or practice of noncompliance under 12 U.S.C. 2605 ( f ) ( 1 ) ( B ).

Because you service a large VA loan portfolio, your ongoing conduct : places other VA borrowers at risk of false delinquency and wrongful foreclosure, exposes veterans and their families to unlawful fees and credit damage, and raises systemic concerns squarely within the enforcement jurisdiction of CFPB, VA, HUD, state regulators, and, for XXXX XXXX, the SEC and other market regulators. 



IV. Requested Investigation & Corrections ( 12 C.F.R. 1024.35 ( e ) ) Pursuant to 12 C.F.R. 1024.35 ( e ), this Notice of Error requires you to conduct a reasonable investigation and, within XXXX business days of receipt, either : correct the errors and provide written confirmation, or provide a written notice explaining, with supporting documents, why you contend no error occurred. 

I specifically demand the following corrective actions : XXXX. Full Ledger Reconstruction Provide a written, transaction-level reconstruction of my account from XX/XX/XXXX to present, showing for each transaction : date, amount, source ( check/ACH ), how it was applied ( principal/interest/escrow/fees ), and any period it sat in unapplied/suspense. 
XXXX. Proper Application of All Funds Apply all payments and unapplied amounts in accordance with the note, deed of trust, VA servicing requirements, and 12 C.F.R. 1024.35 ( b ) ( 1 ). 
Remove any improper late fees and inspection fees that stem from your own servicing errors. 
XXXX. Rescission of False Delinquency & Foreclosure Activity Issue a written rescission of the XX/XX/XXXX Pre-Foreclosure Notice and any other default or acceleration notices based on inaccurate ledger data. 
Confirm that no foreclosure activity, attorney referral, or trustee action is pending or will be pursued until all errors are fully corrected. 
XXXX. Escrow Re-Analysis and Correction Conduct a compliant escrow analysis under 12 C.F.R. 1024.17, using corrected payment history and disbursements, and provide the full analysis in writing. 
Correct any negative escrow created by your misapplication of funds. 
XXXX Credit Reporting Corrections Immediately correct all negative credit reporting linked to manufactured delinquency and furnish updated data to all CRAs, consistent with FCRA and Regulation V, and provide me written confirmation of each CRA notified. 
XXXX. Written Policy & Investor Disclosure Identify in writing the current investor/owner of the loan, any XXXX pool information, and the Rithm-affiliated entity that ultimately benefits from servicing revenue. 
Produce the written policy or guidelines you relied on for : placing payments into unapplied status, reversing posted payments, and initiating property inspections and fees. 
XXXX. Systemic Safeguards & Veterans Harm Describe what steps you are taking to audit other VA loans where unapplied funds, reversed payments, or false delinquency may have occurred. 
Confirm that similar errors affecting other borrowers will be corrected and that wrongful foreclosures will be halted. 



XXXX Notice of Regulatory & Litigation Rights Your decision to treat my prior RESPA Notice of Error as a duplicate instead of providing a lawful response is now part of the record of willful noncompliance. This renewed Notice is intended to : demonstrate to regulators your deliberate disregard of federal law, preserve my rights under 12 U.S.C. 2605 ( f ) ( actual, statutory, and pattern or practice damages plus attorneys fees ), preserve my rights under FDCPA, FCRA, Dodd-Frank UDAAP , Tennessee law , and VA-related protections , and provide a clear documentary trail for CFPB, XXXX, VA, HUD, and any court. 

Nothing in this letter should be construed as a waiver of any claim, remedy, or protection. I expressly reserve all rights. 

Please direct your written RESPA response to the address above, with a copy by email if available.

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