Consumer complaint received 2025-11-11 00:00:00
Product: Mortgage — VA mortgage
Issue: Trouble during payment process — Payment process
Company: Rithm Capital Corp.
State: TN

Complaint narrative:
I. Core Event XX/XX/XXXX Admission On XX/XX/XXXX, a XXXX  agent admitted on a recorded call that {$12000.00} of borrower payments were unapplied and promised allocation of {$8000.00} toward XXXX and XXXX payments with a {$4000.00} refund. 
This admission, verified by recording and transaction data, was never honored. Subsequent calls produced contradictory statements, new totals, and later a written response blaming agent error. 

That reversal confirms the existence of no functioning control systema total collapse of governance and supervision throughout XXXX, XXXX, and by extension, their parent, Rithm Capital Corp . 



XXXX. Pattern of XXXX and XXXX XXXX XXXX XXXX recorded calls, agents delivered mutually exclusive statements regarding balance, payment posting, and unapplied funds. 
Each agent quoted a different total for the same due date. 
Confirmed ACH drafts were not reflected in ledgers. 
Payment application tasks were promised, opened, and never executed. 
Portal balances shifted within XXXX hours without explanation. 

These inconsistencies demonstrate systemic control failure, not clerical error. The later claim that our agent made a mistake merely concedes that the company lacks any internal consistency or compliance supervision. 



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

12 C.F.R. 1024.35 ( b ) ( 1 ) Failure to correct acknowledged servicing errors.

12 C.F.R. 1024.41 ( g ) Continuation of collection/foreclosure during active dispute.

Each violation multiplied by every misapplied payment constitutes a regulatory offense. 



IV. Fiduciary Oversight and Corporate Governance Failure A. Applicable Standards XXXX. In re XXXX XXXX XXXX. XXXX XXXX, XXXX XXXX XXXX ( XXXX. Ch. XXXX ) XXXX duty to implement and monitor information systems ; knowing failure = bad-faith oversight. 
XXXX. XXXX XXXX XXXX ( XXXX ), XXXX XXXX XXXX ( XXXX. XXXX ) Directors must monitor mission-critical risks ; ignorance equals loyalty breach. 
XXXX. XXXX XXXX XXXX XXXX XXXX, XXXX XXXX XXXX ( XXXX Cir. XXXX ) Executives incur personal exposure for reckless disregard of control breakdowns. 

B. Application to Rithm Capital Corp . 
Governance chain : XXXX XXXX XXXX XXXX XXXX, XXXX, Chairman XXXX XXXX XXXX XXXX XXXXXXXX / CXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX / XXXX XXXX Managing Directors Findings : XXXX. Mission-critical failure : Mortgage-servicing accuracy is XXXX core business function. Allowing inconsistent unapplied-funds handling constitutes a XXXX breach XXXX 
XXXX. Absence of escalation : No evidence the XX/XX/XXXX red flag or subsequent contradictions reached the boardviolating Boeings monitoring mandate. 
XXXX. Willful blindness : Accepting the agent-error explanation without independent audit meets XXXX definition XXXX reckless disregard. 
XXXX. XXXX  certification risk : Repeated servicing irregularities undermine internal-control assertions under XXXX XXXX & XXXX XXXX rendering XXXX XXXX certifications suspect. 

These failures expose XXXX board and senior officers to derivative liability for breach of fiduciary duty and bad-faith oversight. 



XXXX XXXX XXXX XXXX When a parent corporation allows its servicing subsidiaries to issue contradictory financial representations, the problem is structural. 
XXXX inability to produce a single, reconcilable ledger for this loanand likely thousands moremeans its financial statements and XXXX XXXXlings XXXX be materially misstated. 
This is not an operational error ; it is a governance crisis spanning the XXXX XXXXo the audit chair. 



VI. Monetary Demand and Exposure Category Basis Amount Immediate remedial application/refund Unapplied payment pool reconciliation {$100000.00} Compensatory damages Economic, credit, emotional harm {>= $1,000,000} Statutory / treble Willful violations of federal servicing rules {>= $1,000,000} Punitive adjustment Governance & fiduciary collapse {>= $1,000,000} Total Exposure {>= $1,000,000} XXXX. Demands for XXXX XXXX XXXX. Full transaction export ( XXXX ) : all timestamps, user IDs, and reversal codes. 
XXXX. XXXX XXXX of all unapplied funds with corrected amortization schedule. 
XXXX. Written certification from XXXX XXXX and XXXX XXXX confirming reconciliation accuracy. 
XXXX. Rescission of any foreclosure or collection actions initiated during unapplied-fund periods. 
XXXX. XXXX credit bureau reports reflecting corrected payment history. 
XXXX. XXXX notification to CFPB and XXXX within XXXX business days outlining corrective plan. 

XXXX. Closing NewRezs claim that an agent made an error is an admission that no one within XXXX mortgage-servicing empire knows where borrower funds reside. 
Such ignorancepermitted and perpetuated by senior officersconstitutes reckless, bad-faith governance under XXXX, XXXX, and XXXX. 
Until XXXX delivers a verified ledger and issues full restitution, it remains in active breach of fiduciary duty and federal law. 







Addendum Rebuttal of XXXX XX/XX/XXXX Dispute After acknowledging on XX/XX/XXXX that {$12000.00} of borrower funds were being held unapplied, XXXX XXXX XXXX course and submitted a written statement claiming that its own agent had made an error. 
That reversal can not withstand factual scrutiny : XXXX. XXXX XXXX. The call is preserved in full. The agent confirmed specific dollar amounts {$8000.00} will be applied, and {$4000.00} refunded. Those numbers match contemporaneous ledger values visible in the borrower portal. 
XXXX. XXXX XXXX. Within twenty-four hours of that call, the transaction history displayed corresponding task completed entries and the unapplied-funds total declined to {$0.00}. That digital signature proves the company itself executed changes consistent with the agents promise. 
XXXX. Subsequent Contradictions. XXXX later representatives ( XXXX, XXXX, XXXX ) referenced completed tasks or unapplied balances without noting any correction, demonstrating that no single internal record source exists. 
XXXX. Failure to Preserve Evidence. When confronted, XXXX produced no internal ticket number, supervisor review note, or quality-assurance record. Under XXXX C.F.R. XXXX ( c ), servicers must retain evidence of investigations into asserted errors ; failure to do so confirms non-compliance. 
XXXX. Constructive Knowledge. By invoking agent error without reviewing the underlying ledger event or recording, management acted with reckless disregard of the truthprecisely the XXXX XXXX XXXX bad-faith oversight. 

Therefore, the agent error defense is affirmative evidence of a cover-up : it proves that XXXX internal systems permit unverified, retroactive alteration of financial data. The reversal transformed a documented, verifiable correction into a false narrative to evade liability. That act converts operational negligence into knowing misrepresentation. 

This XXXX XXXX followed by the written denialmarks the precise breach point where : XXXX XXXX controls failed ; Rithm Capitals governance obligations under XXXX, XXXX, and XXXX attached ; and XXXX certifications under XXXX XXXX & XXXX became unreliable. 

Henceforth, every inconsistent balance or unapplied-fund fluctuation is imputed to XXXX leadership as an ongoing fiduciary violation, not a servicing variance.

Company response to consumer: Closed with explanation