Consumer complaint received 2024-09-23 00:00:00
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Struggling to pay mortgage — Foreclosure
Company: Shellpoint Partners, LLC
State: CA

Complaint narrative:
I write to urgently request that the foreclosure sale that took place on my property be rescinded due to serious violations related to my Home Equity Line of Credit ( HELOC ) Agreement. Specialized Loan Servicing ( SLS ), now Newrez LLC dba Shellpoint Mortgage Servicing, has not only violated legal standards, but has also inflicted significant damages and emotional distress upon me as a consumer and homeowner. 

Rather than taking the opportunity to address the underlying issues and concerns surrounding the mortgage agreement, the lender disregarded the legal protections afforded to the borrower. This decision not only reflects a lack of commitment to ethical lending practices, but also underscores a troubling disregard for the borrowers rights, ultimately prioritizing financial gain over fair and responsible resolution of the matter. 

For nearly a decade, I received no statements regarding my HELOC account, contrary to the Agreement 's requirement to provide periodic updates. This lack of communication led to significant financial and emotional distress, particularly as the company initiated foreclosure under what I believe are predatory practices associated with " zombie second mortgages. '' The Consumer Financial Protection Bureau ( CFPB ) has issued guidance against such illegal collection tactics, highlighting how companies like SLS engage in deceptive practices. The absence of regular statements prevented me from effectively managing my account and may constitute a violation of consumer protection laws. 

For an extended periodof approximately 10 years and most recently, for a period of around 6 months in XXXXSLS did not provide me with statements or updated balances on my mortgage account, even though my HELOC Agreement states that " at a minimum '' periodic statements must be sent " at the end of each billing cycle in which there is a debit or credit balance of more than XXXX XXXX  ( {$1.00} ) or in which a finance charge has been imposed. '' I believe that this was done purposely, while there was no equity in my home. Now that the property gained equity, SLS/Newrez LLC dba Shellpoint Mortgage Servicing foreclosed. I suspect that this omission was not accidental, but rather a deliberate, bad faith action on the part of the lender to create a scenario where I would fall behind on payments. The lack of communication has severely impacted my ability to manage my payments effectively, ultimately leading to my current situation. This is not only unethical, but potentially violates consumer protection laws that require transparency and fair treatment of borrowers. This misleading conduct has caused significant financial and emotional distress. 

Additionally, a previous Notice of Sale issued by SLS just months ago was legally defective, failing to meet necessary procedural requirements. Courts consistently uphold that compliance with notice requirements is fundamental to valid foreclosure proceedings. Any defects undermine the legitimacy of the foreclosure process. 

The Consumer Financial Protection Bureau 's ( CFPB ) Consent Order against Specialized Loan Servicing ( SLS ) issued in XX/XX/year> represents one of the most significant legal actions against SLS in recent years. The Consent Order documents clear violations of the Real Estate Settlement Procedures Act ( RESPA ) and underscores SLS 's persistent engagement in predatory and deceptive business practices, as evidenced by the Settlement that SLS was required to pay to the CFPB ( see Consent Order, Stipulation, & Settlement attached ). These documented violations and the specific terms of the settlement demonstrate a recurring pattern of " unlawful '' and " predatory '' conduct, as explicitly described by the CFPB, reflecting systemic breaches of United States consumer protection laws. It is therefore not uncommon for consumers to encounter substantial difficulties when dealing with SLS. 

The Consent Order revealed that SLS undertook prohibited foreclosure actions and failed to provide required evaluation notices to borrowers entitled to protection. These findings directly reflect the conduct occurring in my situation. To highlight, " The Bureau found that in some cases, SLS obtained foreclosure judgments and conducted foreclosure sales on borrowers ' homes when Regulation X would have entitled the borrowers to protection from foreclosure had SLS complied with that rule '' ( see attached ). " As a result of these violations, SLS was ordered to pay {$770000.00} in monetary relief to consumers, waive {$500000.00} in borrower deficiencies, pay a {$250000.00} civil money penalty, and implement procedures to ensure compliance with RESPA and Regulation X '' ( see attached ). Specifically, Regulation X requires that " servicers provide written notice to borrowers at certain times during the life of the loan, including at least once a month for borrowers with variable-rate mortgages with monthly adjustments or other loans with payments that can change. The notice must include a statement of the account that includes the amount due, the due date, and the breakdown of payments, including the amount applied to principal, interest, and escrow, if applicable '' ( see attached ). 

Most recently, SLS continued to threaten foreclosure even when I received an email stating, " You should have recently received an email about the new changes regarding your loan servicers name. As of XX/XX/XXXX, your mortgage loan that was serviced by SLS now has a new name Newrez LLC dba Shellpoint Mortgage Servicing. '' Besides one email from Newrez LLC dba Shellpoint Mortgage Servicing, I did not receive any prior email communications relating to my loan, as the email states I should have. Furthermore, when speaking to Newrez LLC dba Shellpoint Mortgage Servicing, no information about my loan was found or made available to me. Therefore, attempts to remedy the situation during this servicer change were unable to be considered or processed, including loss mitigation options with Newrez LLC dba Shellpoint Mortgage Servicing. 

Further violations in SLS procedures and compliance with consumer law continue. For example, SLS sent me a faulty loan modification application that did not meet California real estate procedures according to a representative I spoke with from Newrez LLC dba Shellpoint Mortgage Servicing. The companys actionspursuing foreclosure despite the lack of proper documentation and communicationare indicative of these illegal practices and may also be in violation of the Fair Debt Collection Practices Act. 

Given the recent Consent Order issued by the CFPB, it is clear that SLS has a history of violating consumer protection laws. This complaint is substantiated by documented evidence, including the Consumer Financial Protection Bureau 's ( CFPB ) Consent Order, Settlement, and Guidance documents, all of which are appended to this letter.

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