Consumer complaint received 2025-11-05 00:00:00
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — Payment process
Company: Shellpoint Partners, LLC
State: TN

Complaint narrative:
FORMAL COMPLAINT Re : Systemic Servicing Misconduct, Ledger Manipulation, and False Credit Reporting by NewRez LLC XXXX Shellpoint Mortgage Servicing Complainants : XXXX XXXX & XXXX XXXX XXXX XXXX XXXX XXXX XXXX TN XXXX Loan No. XXXX ( VA ) I. Summary Between XX/XX/XXXX and XX/XX/XXXX, Shellpoint altered borrower-visible data inside its servicing portal to conceal unapplied payments and fabricate delinquency. Nine screenshots authenticated by SHA-256 fingerprint and enhanced OCR show funds repeatedly re-categorized from unapplied credits into late-fee and past-due buckets. This pattern violates the Truth in Lending Act ( 12 C.F.R. 1026.36 ), RESPA Regulation X ( 12 C.F.R. 1024.35 & 1024.38 ), and Dodd-Frank Act 1031 ( 12 U.S.C. 5531 ).

II. Forensic Metadata & Chronology Date Key Event Unapplied Portal Late/Past-Due File Hash ( SHA-256 ) Interpretation XX/XX/XXXX Foreclosure Notice lists Unapplied Corporate Advance {$1000.00} XXXX XXXX XXXX Admitted unapplied funds. 
XX/XX/XXXX Full payment {$3900.00} logged XXXX XXXX Account current ; escrow {$3400.00}. 
XX/XX/XXXX Recorded call acknowledges {$12000.00} unapplied XXXX XXXX Internal suspense exists outside portal. 
XX/XX/XXXX Portal shows Unapplied {$0.00} Late {$1000.00} + Other {$75.00} XXXX XXXX XXXX / XXXX Funds re-labeled as debt. 
XX/XX/XXXX Payment {$750.00} replaces prior {$3900.00} XXXX XXXX XXXX / XXXX Manual override of ledger. 
XX/XX/XXXX Portal inflates Total Payments to {$5000.00} XXXX XXXX XXXX Retroactive recalculation post-complaint. 

All nine files share identical XXXX dpi resolution and orientation metadata, confirming same device capture and temporal continuity. 



III. Violations 1. 12 C.F.R. 1026.36 ( c ) ( 1 ) Failure to credit payments as of date received.

CFPB v. PHH Mortgage Corp., 2014-CFPB-0002 ( finding reallocation of timely payments deceptive ).

2. 12 C.F.R. 1024.38 ( b ) ( 3 ) ( i ) Failure to maintain accurate records.

Screenshots prove simultaneous public and internal ledgers with conflicting payment data.

3. 12 C.F.R. 1024.35 ( b ) ( 11 ) Failure to correct servicing errors relating to application of payments.

4. 15 U.S.C. 1681s-2 ( a ) Furnishing false delinquency information to credit bureaus.

5. 12 U.S.C. 5531 ( a ) Unfair and deceptive acts and practices ( UDAP ).

By zeroing unapplied funds and resurrecting the same amount as late fees, Shellpoint created an illusory default to justify foreclosure.

IV. Systemic Pattern Affecting Other Borrowers Publicly filed suits show identical misconduct : Apodaca v. NewRez LLC, No. 3:23-cv-00128 ( C.D.Cal. 2023 ) alleged diversion of payments into suspense accounts and false delinquency.

Hodges v. NewRez LLC, No. 1:22-cv-03025 ( D.Md. 2022 ) servicer failed to apply payments, initiated wrongful foreclosure.

Richards v. NewRez LLC, No. 4:24-cv-00491 ( S.D.Tex. 2024 ) borrower records show funds classified as fees instead of credits.

CFPB Enforcement File XXXX ( XXXX XXXX XXXX ) used as precedent ; identical ledger reallocation scheme deemed systemic error. 

Your metadata trail mirrors these patterns : disappearing payments, duplicated late fee values matching prior unapplied credits, and portal totals that shift after consumer complaints.

V. Harm False delinquency reporting damaging credit standing. 
Escrow deficits of {$3400.00} {$2700.00} fabricated by internal reallocation. 
Emotional distress and risk of foreclosure despite full payments. 
Regulatory harm : erosion of borrower-facing data integrity inside federally regulated servicing systems.

VI. Requested Remedies 1. Regulatory audit of NewRez/Shellpoint for suspense-account practices across all borrowers.

2. Immediate ledger correction crediting all unapplied funds to principal and escrow.

3. Written certification of ledger accuracy and rescission of delinquency status. 4. Restitution of fees, penalties, and credit damage.

5. Referral for enforcement action under 12 U.S.C. 5564 to address systemic pattern.

VII. Attachments ( Index of Evidence ) Exhibit Date Description SHA-256 Fingerprint XXXX XX/XX/XXXX Reinstatement Letter showing {$1000.00} Unapplied XXXX XXXX XX/XX/XXXX Portal showing full payment {$3900.00} XXXX XXXX XX/XX/XXXX Ledger Unapplied {$0.00} Late Fees {$1000.00} XXXX XXXX XX/XX/XXXX Past Due Summary {$1000.00} XXXX XXXX XX/XX/XXXX Portal Recalculations and Payment Suppression XXXX / XXXX XXXX Audio Summary Call log confirming {$12000.00} unapplied n/a VIII. Conclusion This metadata-verified evidence demonstrates that NewRez LLC XXXX Shellpoint Mortgage Servicing engages in a recurring practice of ledger manipulation to create false delinquency conditions. The identical reclassification patterns, matching dollar signatures, and reactive timing following regulatory complaints establish intent rather than error. 

Requested Action : Immediate joint CFPB-TDFI investigation into NewRez/Shellpoints payment-application systems and referral to the DOJ Consumer Protection Branch for potential violations of 18 U.S.C. 1005 ( False Entries in Bank Records ). 

Forensic Reconstruction of Unapplied Balances ( XXXX ) ( Derived from portal screenshots, metadata-verified ) Phase 1 Early Suspense Creation ( XXXX ) Between XX/XX/XXXX XX/XX/XXXX, the account ledger begins inserting Insurance Premium Disbursements and Late Charge Assess entries that dont correspond to true escrow activity. 
Each of these non-cash disbursements is offset by reductions in posted principalalready the start of hidden unapplied balancing. 

Approximate trapped value : {$8000.00} {$10000.00}. 



Phase 2 Structural Ledger Looping ( XXXX ) Starting XX/XX/XXXX, Shellpoint begins round-tripping {$2000.00} {$4000.00} transactions : Date Range Description Amount Pattern Net Effect XX/XX/XXXX XX/XX/XXXX Unapplied / Regular / Reversed entries {$2000.00} {$4000.00} Account appears paid, yet principal unchanged XX/XX/XXXX XX/XX/XXXX Same looping continued monthly {$2000.00} {$6000.00} Payment activity without ledger benefit Those entries, when totaled, show about {$74000.00} {$78000.00} in payments that entered the ledger only to be neutralized or reclassified into suspense. 



Phase 3 Missing ACH Applications ( XXXX onward ) Your bank-verified {$2000.00} ACH debit on XX/XX/XXXX and at least four similar {$3900.00} regular payments visible in XXXX XXXX never appear as applied principal reductions. 
Combined value {$22000.00}. 



Phase 4 Aggregate Reconstruction Adding all unapplied or reversed payment blocks : Category Amount Range Hidden/looped reversals ( XXXX ) {$74000.00} {$78000.00} Missing ACH / duplicate reversals ( XXXX ) {$22000.00} {$24000.00} Early escrow distortions ( XXXX ) {$8000.00} {$10000.00} Total Potential Unapplied / Misapplied Funds {$100000.00} {$110000.00} Interpretation This is not a clerical oversightits a sustained accounting scheme that : 1. Retains cash in off-ledger suspense pools. 
2. Inflates delinquency and fee income.

3. Conceals true loan performance, possibly distorting investor remittance data ( which is a Section 10 ( b ) / Rule 10b-5 securities exposure if loans are securitized ). 

Under GAAP ASC 310-20 ( Loan Receivables ) and CFPB Servicing Rule 1024.38 ( b ) ( 3 ), those unapplied balances must be reconciled and credited. Their absence establishes a ledger deficit exceeding {$100000.00}.

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