Mortgage -- Trouble during payment process -- Complaint #15634773
Mortgage Servicer's Escrow Errors Force Homeowner to Pay Property Taxes Directly
Complaint Overview
Complaint ID: 15634773
Company: Shellpoint Partners, LLC
Product: Mortgage
Sub-Product: Conventional home mortgage
Issue: Trouble during payment process
Sub-Issue: Escrow, taxes, or insurance
State: Washington
ZIP Code: 98133
Date Received: 2025-08-31T12:00:00-05:00
Date Sent to Company: 2025-08-31T12:00:00-05:00
Company Response: Closed with explanation
Timely Response: Yes
Consumer Disputed: N/A
Submitted Via: Web
Risk Assessment
Risk Level: high
The risk is high because the servicer's repeated errors in property tax payments could lead to significant financial penalties for the consumer, including tax delinquency, late fees, and potentially even foreclosure if the issue escalates. The ongoing nature of the problem and lack of resolution despite multiple contacts indicate a systemic failure by the servicer.
Consumer Sentiment: frustrated
Topics: mortgage-servicing, escrow-account-mismanagement, property-tax-payment-failure, shellpoint-partners-llc, newrez, consumer-complaint, real-estate-settlement-procedures-act
AI Analysis
This complaint details a serious issue where your mortgage servicer, Newrez (operating under Shellpoint Partners, LLC), has repeatedly failed to correctly manage your property tax payments. Despite your escrow account being funded, they used an incorrect parcel number for your property, causing payments to be misdirected to the wrong county tax account on three separate occasions. You've contacted them multiple times over an extended period, but they've offered no real solution, only stating the issue was 'processing.' Because of their errors and delays, you were forced to pay your property taxes out-of-pocket to avoid penalties, incurring a direct financial burden and significant stress. The problem persists, as their system still shows the incorrect parcel number, raising concerns about future erroneous payments and potential damage to your credit standing. This situation is concerning because timely and accurate property tax payments are crucial for maintaining homeownership and avoiding severe financial penalties, including foreclosure. It's also important because mortgage servicers have a legal obligation to manage escrow accounts properly. While specific data on Newrez's patterns isn't publicly detailed here, issues with escrow management and property tax payments are not uncommon in the mortgage servicing industry, especially with large servicers handling many accounts. The likely root cause appears to be a systemic data error within Newrez's system regarding your property's parcel number, coupled with a failure in their customer service and internal processes to identify and rectify this persistent error despite repeated customer contact. The company's response of 'Closed with explanation' suggests they may believe they've addressed it, but your narrative indicates the problem is ongoing, which is a significant red flag. For others facing similar issues, it highlights the importance of vigilant monitoring of escrow accounts and property tax payments, and the need to escalate complaints when initial attempts at resolution fail.
Consumer Narrative
I am writing to file a complaint against my mortgage loan servicer, Newrez ( XXXX ), regarding the mishandling of my escrow account and property tax payments. Despite my escrow account being properly funded, Newrez has repeatedly failed to make timely and correct property tax payments on my behalf. Specifically : 1 ) Incorrect Parcel Number Newrez has been using an incorrect parcel number for my property. As a result, payments were sent to the wrong county tax account. This error has occurred three separate times. 2 ) Lack of Resolution Despite Repeated Requests Since XX/XX/year>, I have made five to six phone calls and sent multiple emails to Newrez regarding this issue. Each time, I was told that the matter was " still processing '' and that I would need to wait up to 30 days. No substantive resolution has been provided. 3 ) Forced to Pay Out-of-Pocket Because of Newrezs ongoing errors and delays, I was ultimately forced to pay my property taxes directly through the countys online system to avoid delinquency and penalties. 4 ) Ongoing Errors As of XX/XX/year>, Newrezs system still shows the incorrect parcel number for my home. I have reason to believe they are continuing to make erroneous payments, which could further complicate my tax records and credit standing. This persistent mismanagement has caused me significant stress, financial burden, and wasted time.
What You Should Do -- Consumer Action Plan
1. **Document Everything:** Keep meticulous records of all phone calls (dates, times, representative names, summary of conversation), emails, letters, and any proof of your out-of-pocket tax payments. 2. **Send a Formal Demand Letter:** Write a formal letter to Newrez (Shellpoint Partners, LLC) detailing the history of the errors, the incorrect parcel number used, the dates you contacted them, the fact that you had to pay taxes out-of-pocket, and demand that they correct the parcel number in their system immediately and confirm this correction in writing. State that you expect them to reimburse you for any penalties or fees incurred due to their error, and for any costs associated with your direct payments if applicable. Send this via certified mail with return receipt requested. 3. **File a Complaint with the CFPB:** If you haven't already, file a detailed complaint with the Consumer Financial Protection Bureau (CFPB) online at consumerfinance.gov. Reference your previous complaint if applicable. 4. **Contact Your State Attorney General:** File a complaint with the Washington State Attorney General's Office. They handle consumer protection issues and may be able to intervene. 5. **Dispute Errors with Credit Bureaus:** If you believe these errors have impacted your credit report (e.g., if taxes were reported as delinquent), dispute the inaccuracies with each of the three major credit bureaus (Equifax, Experian, TransUnion).
Legal Context & Consumer Protection Laws
The Real Estate Settlement Procedures Act (RESPA) is highly relevant, specifically Section 6, which governs mortgage loan servicing. It requires servicers to establish loss mitigation procedures and handle escrow accounts properly. A violation could occur if Newrez failed to manage the escrow account in accordance with RESPA's requirements, leading to improper tax payments. The Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) provision of the Dodd-Frank Act is also applicable. Newrez's repeated failure to correct a known error, causing financial harm and stress to the consumer, could be considered an unfair or deceptive practice.
Regulatory Insight
This complaint pattern, involving repeated errors in property tax payments and a lack of effective resolution despite consumer outreach, suggests potential systemic issues within the mortgage servicer's operational or data management processes. The CFPB frequently receives complaints related to escrow account mismanagement and property tax payment failures. Such recurring issues can indicate broader problems with a servicer's internal controls, technology, or training, potentially leading to UDAAP violations if they are deemed unfair or deceptive.
Resolution Likelihood
40%
State-Specific Consumer Protections
In Washington State, consumers can file complaints with the Washington State Attorney General's Office, Consumer Protection Division. They enforce state consumer protection laws, which may offer additional protections beyond federal laws. It's advisable to check the AG's website for specific complaint forms and procedures relevant to mortgage servicing issues.
Industry Comparison
This type of error, while frustrating, is not entirely uncommon across the mortgage servicing industry, particularly with large servicers handling vast portfolios. However, the persistence of the incorrect parcel number and the lack of resolution despite multiple contacts suggest Newrez may be performing below the industry average in terms of customer service responsiveness and internal error correction.
Related Issues
Frequently Asked Questions
My mortgage servicer keeps messing up my property tax payments. What should I do?
This is a serious issue that can lead to penalties and damage your credit. First, document every interaction you have with your servicer regarding this problem – keep notes of calls, save emails, and gather proof of any payments you make out-of-pocket. Next, send a formal demand letter via certified mail to your servicer, clearly outlining the errors, your previous attempts to resolve them, and what you expect them to do (e.g., correct system errors, reimburse you for fees). Simultaneously, file a complaint with the Consumer Financial Protection Bureau (CFPB) online at consumerfinance.gov. You should also consider filing a complaint with your state's Attorney General's office. If the errors have affected your credit report, dispute them directly with the credit bureaus (Equifax, Experian, TransUnion).
What are my legal rights when my mortgage servicer fails to pay my property taxes correctly?
Your primary legal rights stem from federal laws like the Real Estate Settlement Procedures Act (RESPA) and the Dodd-Frank Act. RESPA requires mortgage servicers to manage escrow accounts properly and handle payments accurately. Failure to do so, especially if it results in penalties or harm to you, could be a violation. The Dodd-Frank Act prohibits Unfair, Deceptive, or Abusive Acts or Practices (UDAAP). If your servicer's repeated errors and failure to resolve the issue cause you financial harm or significant stress, it could be considered a UDAAP violation. You have the right to accurate account servicing and to be free from deceptive or unfair practices.
Should I file a complaint with the CFPB about my mortgage servicer's errors?
Yes, absolutely. Filing a complaint with the Consumer Financial Protection Bureau (CFPB) is a crucial step. The CFPB acts as a central repository for consumer complaints against financial institutions and has the authority to investigate patterns of misconduct. To file, visit their website (consumerfinance.gov) and submit a detailed account of the problem, including dates, specific errors, and any communication you've had with the company. Include any supporting documentation you have. This not only helps you seek resolution but also contributes to the CFPB's oversight of the industry.
What is Shellpoint Partners/Newrez's track record with escrow complaints?
While specific, real-time track records are difficult to ascertain without direct access to internal CFPB data or ongoing investigations, complaints regarding mortgage servicers like Shellpoint Partners/Newrez often involve issues with escrow account management, payment processing, and customer service responsiveness. The CFPB's public complaint database can provide insights into the types and volume of complaints filed against specific companies. If multiple complaints surface regarding similar escrow or tax payment issues, it may indicate a pattern of operational deficiencies within the company.
What are my next steps if my mortgage servicer won't fix their escrow errors?
If your servicer is unresponsive or unwilling to fix the errors, your next steps should involve escalating the issue. First, send a formal demand letter via certified mail, clearly stating the problem and your expectations. If that yields no results, file formal complaints with the CFPB and your state Attorney General. You may also consider consulting with a consumer protection attorney to understand your options for legal recourse, especially if you've incurred significant financial damages or penalties. In some cases, if the errors are widespread and affect many consumers, a class-action lawsuit might be a possibility, though this is less common for individual servicing errors unless they are systemic.
How can my mortgage servicer's escrow errors affect my credit score?
Mortgage servicers are responsible for ensuring that property taxes and homeowners insurance premiums paid from your escrow account are made on time. If your servicer fails to make these payments due to errors (like using the wrong parcel number), and this leads to delinquency or penalties being reported to the credit bureaus, it can negatively impact your credit score. Even if you pay the taxes yourself to avoid penalties, if the servicer incorrectly reports the status of your taxes or escrow account to the credit bureaus, it could still cause inaccuracies on your credit report. It's crucial to monitor your credit reports and dispute any errors that arise from these servicing mistakes.
Could this issue lead to a class action lawsuit against Shellpoint Partners/Newrez?
A class action lawsuit is typically pursued when a company's actions have harmed a large group of consumers in a similar way. For this specific issue—an incorrect parcel number leading to misdirected tax payments—it's possible, but less likely to form the basis of a class action on its own unless it's part of a broader, systemic failure affecting many customers. Class actions are more common for widespread issues like illegal fees, widespread loan modification denials, or systematic violations of consumer protection laws. However, if this incorrect parcel number issue is a recurring problem for many customers due to a systemic flaw in Shellpoint/Newrez's data management or processes, and if significant damages are incurred collectively, it could potentially become grounds for a class action. You can check legal resources or consult with a consumer attorney specializing in class actions to see if similar issues have been aggregated.
Disclaimer
This analysis is generated by an AI and is for informational purposes only. It does not constitute legal advice.