Consumer complaint received 2023-06-12 00:00:00
Product: Mortgage — Conventional home mortgage
Issue: Struggling to pay mortgage — 
Company: Shellpoint Partners, LLC
State: CA

Complaint narrative:
Shellpoint Mortgage Servicing has scheduled an illegal, fraudulent, and willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust of my property for XX/XX/XXXX, although I have not defaulted on my legal obligations. The servicer is the party in default and lacks the authority to invoke the power of sale. 

A mortgage loan is a contract with mutual obligations. The duty created by the DOT to make monthly payments is constructively conditioned on the creditor 's duty to accept and not hinder payments. The servicer actively prevented performance by violating the contract as per the FTC by overcharges not refunded, inducing skipped payments with false promises of improved loan terms, and refusing tender of the amount due. I was wrongly placed in default and the lack of authority to modify was concealed from me for two years. Their material failure to perform prevented the condition of my performance from becoming due as the constructive condition of exchange was not met. 

The servicer 's actions placed them in breach and their debt collection activities violate the FDCPA. 

FALSE OR MISLEADING REPRESENTATIONS A debt collector is prohibited under state and federal consumer law from using any false, deceptive, or misleading representation or means in connection with the collection of any debt. 

15 U.S.C. 1692e ( 2 ) ( A ) specifically prohibits the false representations of the character, amount, or legal status of any debt.

15 U.S.C. 1692e ( 10 ), prohibits using false representations or deceptive means to collect or attempt to collect any debt. 

Shellpoint Mortgage Servicing has filed a document in XXXX XXXX records characterized as a notice of sale ( NOS ) which contains numerous misrepresentations in connection with attempting to collect a debt. 

The NOS represents by implication that they have complied with their legal and contractual obligations and are acting within the scope of their authority under the DOT and civil code. The NOS expressly represents that I have defaulted on my legal obligations.

These representations are false. The servicer has materially failed to perform and lacks the authority to file an NOS under the DOT or California law. The recorded document is instead a debt collection notice and subject to the FDCPA.

The NOS misrepresents the debt as a figure inflated by interest, charges, and fees not authorized by the loan contract or by Applicable Law and thus in violation of 15 U.S.C. 1692c ( 2 ) ( A ) which prohibits, " The false representation of the character, amount, or legal status of any debt. '' The representations set forth in NOS are false or misleading and constitute a deceptive act or practice. 

UNFAIR PRACTICES A debt collector is prohibited under state and federal consumer law from engaging in any unfair act or practice in connection with the collection of a debt. 

The servicer 's failure to perform defeated the purpose of the contract : the repayment of the borrowed funds. I was deprived of my reasonably expected benefits and caused substantial financial injury. Instead of applying my funds to decrease the loan balance those funds had to be used to prevent a wrongful foreclosure and the cost far exceeds monthly payments. Meanwhile, the servicer has increased the debt with high interest, charges and fees not authorized by the DOT or Applicable Law.

The amount demanded by the debt collection notice is in dispute, unsubstantiated, and in violation of 15 U.S.C. 1692f which prohibits, " The collection of any amount ( including any interest, fee, charge, or expense incidental to the principal obligation ) unless such amount is expressly authorized by the agreement creating the debt or permitted by law. '' Please see attached dispute of debt letter. 

It is unfair for a debt collector to frustrate the purpose of the contract by actively preventing a borrower from making payments. 

It's unfair for a debt collector to use fraudulent means to interfere with a borrower 's performance and use that to inflate the debt. 

This conduct has caused and will continue to cause substantial injury. Because of the imbalance of power, substantial injury can't be avoided. 

In my efforts to resolve this with the servicer, I've provided sworn testimony to their breach and the consequent financial injury. The cost of preventing a wrongful foreclosure has far exceeded the total payments their breach prevented. Meanwhile, charges, fees, and interest inflated the loan balance by {$200000.00} over than it would have been if they'd performed. This is an amount to which they are not entitled and is in dispute. 

" If XXXX XXXX wrongfully placed XXXX 's loan in foreclosure, as XXXX alleges, then it had no right to demand payment of additional fees and interest to reinstate the loan. XXXX XXXX could not take advantage of its own wrong. ( Civ. Code, 3517. ) '' Ragland v. US Bank National Assn., 209 Cal. App. 4th 182, 147 Cal. Rptr. 3d 41 ( Ct. App. 2012 ). 

In order for contract performance to resume it was necessary for the servicer to cure their material failure to perform by removing those amounts not authorized by the loan contract or Applicable Law to which they are not entitled. But they refused and instead offered a modification that included those amounts upon which they would earn interest on their own wrongdoing. It was a take-it-of-leave-it offer with the implicit threat of foreclosure. 

It's unfair for a debt collector to use their superior bargaining power to try to increase their profit by causing financial injury to a consumer. They are leveraging the disparity of bargaining power and trying to avoid their own liability for contract damages. 

When the servicer refused to cure their material failure to perform that constituted a total breach of contract, see Restatement Second of Contracts 241. When they instead offered the modification that constituted a repudiation under 253 as a refusal to perform. Individually or together this resulted in a failure of consideration.

HARASSMENT AND ABUSE A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse. 

15 U.S.C. 1692e ( 5 ) specifically prohibits the threat to take any action that can not legally be taken or that is not intended to be taken.

The servicer is threatening to take nonjudicial action to effect the dispossession of property when there is no present right to the possession of the property claimed as collateral through an enforceable security interest in violation of 15 U.S.C. 1692f ( 6 ) ( A ). 

The servicer lacks the authority to foreclose under the DOT because their willful failure to perform and refusal to cure has resulted in a failure of consideration. While the debt still exists there is no longer an enforceable security interest. 

They are now using the threat of a foreclosure sale as leverage to avoid their own liability for contract damages and to intimidate. Instead of negotiating fairly, the threat is being used so that I will agree to let them benefit from their own wrongdoing at my expense. 

They are abusing their position with the power to affect my material interests and using the power of sale in an unlawful and coercive manner to extract money from a consumer. 

The NOS demands payment of an unsubstantiated debt, an amount in dispute and far above the actual debt. If that amount is not paid by XX/XX/XXXX they threaten to sell my home. While this can't be done lawfully and even though they must be aware that following through would result in a wrongful foreclosure lawsuit it is still a viable threat and a formidable means of persuasion. 

The servicer is weaponizing the power of sale to use in erroneous debt collection. The method employed is similar to one used by XXXX organizations : the mock execution. The victim is told of their impending death but at the last moment, the execution is canceled. The anticipation of pain and loss is effective in intimidation and subjugation. It is considered psychological torture it causes feelings of terror, grief, fright, and despair and is widely condemned by civilized nations and XXXX XXXX. 

Similarly, the servicer schedules a sale of my home of 33 years and then cancels just hours or even minutes beforehand. This is deliberate conduct intended to inflict pain. The servicer has subjected me to this barbaric coercion a couple of dozen times. It is intended to cause psychological trauma, its natural consequence is to harass, oppress, and abuse in connection with the collection of a debt. Its foreseeable consequence given the severity, frequency, and repetition is psychological harm, foreseeably it may cause physical damage as well. It is also possible for the damage to be permanent. The severe stress induced by this unlawful practice XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX. This is painful, has limited my mobility and is worsening. The servicer is aware of the injury caused by their wrongful debt collection practices but persists. 

They are threatening to do something they can not legally do and that will cause me irreparable harm unless I give them money to which they are not entitled. It is attempted extortion. 

The non-judicial foreclosure system is intended to be a means of facilitating the transfer of title for delinquent borrowers. It is not intended to be used to inflict psychological torment on consumers in wrongful debt collection. For federally regulated entities to employ these terrorist-style tactics in debt collection is outrageous. 

It is abusive for a debt collector to use deceptive, unfair, and unlawful means to cause a consumer financial, emotional, and physical injury in connection with the collection of a debt. 

They are leveraging these circumstances to take unreasonable advantage of the unequal bargaining power and my inability to adequately protect my interests. This constitutes abusive conduct under Consumer Financial Protection Bureau, Policy Statement on Abusive Acts or Practices XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 

It is impossible to fulfill a mortgage loan contract if the servicer chooses to withhold their cooperation. Unfortunately, failing to cooperate can be very profitable with a high-interest rate loan and equity in a desirable location. It's easily done, borrowers rarely fight back and there are no consequences. 

The utility of a bilateral contract is that both parties perform to avoid the loss of the expected benefit. This balance is lost altogether if the stronger party benefits even more from non-performance and this places consumers at risk.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation