Shellpoint Mortgage Inadequate Explanation of Payoff Items Class Action

Shellpoint Mortgage Services, officially called Newrez, LLC, is a mortgage servicer. This class action alleges that Shellpoint issues mortgage payoff that do not comply with federal laws, like the Fair Debt Collection Practices Act (FDCPA) and Florida state laws. The complaint claims that the mortgage payoff statements issued by the company to borrowers include a number of vague, not itemized, and possibly unlawful charges.

The National Class for this action is all persons in the US who were charged for fees that were not enumerated or explained on a payoff statement, within a category identified only as “Fees” or “Funds owed by borrower.” A Florida Subclass has been proposed for members of the class in Florida.

The plaintiffs in this case, Marc and Karen Weinberger, took out a mortgage in 2007 in the amount of $189,000 to buy their home in Ft. Lauderdale, Florida. The lender was Homecomings Financial, LLC, and the servicing rights were assigned to Shellpoint.

At some point, because of financial hardship, the Weinbergers were unable to pay their mortgage. In March 2014, Green Tree Servicing, LLC, the apparent successor to Homecomings, started foreclosure proceedings.

In October 20, 2021, the Weinbergers sent Shellpoint a request for a payoff statement. Shellpoint sent them a purported payoff quote on the following day.

However, the complaint alleges that this “payoff letter was inaccurate as it contains a line item of charges which are completely vague and identified only as ‘Fees.’ The composition and the amounts comprising the charges for ‘Fees’ is not completely itemized or disclosed. Indeed, many of the items comprising the ‘Fees’ under the heading of ‘Fee Details’ are vague…, with no explanation as to their propriety; they are just titled as ‘FC Costs.’”

The complaint suggests that these fees may be estimates or they may be invalid. For example, the complaint claims that some of the amounts “appear to be for fees for ‘Attorney Costs’ or ‘Court Costs’ for which the amount of same was not sought or awarded in the underlying foreclosure action as is required by Florida law.” The letter also includes some “Funds owed by borrower” that are not itemized or identified.

Shellpoint sent additional payoff letters, one each on November 1, 2, 3, 4, 5, and 9, 2021. However, the total amount demanded in each letter was different, with no reason given for the differences.

The complaint alleges that Shellpoint “is fully aware … that the standard mortgage loan agreements it services … do not authorize the charging of fees which are estimates or not actually incurred such as those contained in the ‘Fees’ and ‘Funds owed by borrower.’”

Article Type: Lawsuit
Topic: Loans
Tags: FDCPA, Mortgage-Related Unfair Practices, Payoff Statement, Servicing Your Mortgage