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Shellpoint Loan Modification – Problems and Solutions

Shellpoint Loan Modification – Problems and Solutions

Shellpoint Loan Modification – Problems and Solutions 150 150 The Law Office of Nadia K. Kilburn

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Glossary of Terms

Shellpoint Mortgage Servicing, usually known just as Shellpoint, is a residential mortgage servicer that specializes in working with loans that are in default.

Chances are, if you have a loan with Shellpoint, you’re having a difficult experience working with them. Or, you just received a scary-looking goodbye letter saying that your loan is about to be sold to a new lender.

Read on to learn how to contact Shellpoint, how to deal with a service-release issue, how to work with their loss mitigation department, and how to apply for a loan modification.

Additional Resources:

How to prevent foreclosure if you are behind on your mortgage payments

What you need to know about any foreclosure notices you may have received

Why was my loan transferred to Shellpoint?

When your loan is transferred from one bank to another, it is called a service release. Read more about the challenges of a service release and what you can do about it.

Shellpoint is known in the industry as a mortgage servicer that buys the servicing rights of other mortgages.

Specifically, they are known to buy the rights to non-performing loans or loans that are in default. Shellpoint buys the loans in order to add them to their portfolio and make money by servicing them.

If you’re missing payments and your loan was recently taken over by Shellpoint, it is important for you to learn how to communicate with them so you don’t lose your home to foreclosure.

How do I contact Shellpoint?

Here is how to contact Shellpoint if you are having trouble paying your mortgage:

  • If you haven’t already done so, create your “online portal” so you have access to all the documents Shellpoint issues related to your loan
  • Call Shellpoint Loan Servicing’s loss mitigation department at: 866-825-2174
  • Call their customer service department at: 800-365-7107
  • Fax their loss mitigation department at: 866-467-1187
  • Email documents to their loss mitigation department: LossMitigation@shellpointmtg.com (this email address is used for documents only – documents will be received and attached to your account but you will not receive email communication back from Shellpoint)

What does Shellpoint require for their loan modification application?

To apply for a mortgage modification, you will be required to submit a “complete loss mitigation package.” This is basically the lender’s application form plus all of the required financial documents that they require.

The documents include:

(Read this guide to learn about all of the loan modification documents)

The best way to communicate with Shellpoint is through your SINGLE POINT OF CONTACT

Shellpoint will assign you a SINGLE POINT OF CONTACT or “SPOC” once you have missed payments.

Unlike other lenders, Shellpoint’s SPOCs are relatively communicative.

Their SPOCs reply to emails within 7 days of receipt (some of them will reply more frequently). About 50% of the time, if you leave a voicemail for a SPOC – they will return your call.

So, it is definitely worth it to get the name of your SPOC, their direct phone number, and email address. Anyone who answers the phone in Shellpoint’s loss mitigation department can tell you who your SPOC is – their name and contact information are attached to your loan.

If you are missing payments on your mortgage, you will always have a SPOC assigned.

The SPOCs email addresses all end in: @shellpointmtg.com

If you want to speak to your SPOC, you can also have customer service department schedule an appointment to have your SPOC to call you. If you choose to do this, make sure you specifically discuss the time zone of the call. You should also give them a 30 minute window on each end of the call time. They don’t always call on time so give yourself a full hour for them to call you.

Your SPOC may change as frequently as weekly so every time you call for an update, you should ask who your SPOC is to confirm that it’s still the same one.

What is NewRez and why does this name come up when I contact Shellpoint?

NewRez is a mortgage lending company that Shellpoint is a part of. You can expect to see NewRez’s name on your mortgage statement.

Here is some information about this relationship:

https://www.shellpointmtg.com/press-news/shellpoint-mortgage-servicing-announces-ratings-upgrades-from-fitch-with-stable-outlooks/

Make sure you are talking to Shellpoint’s loss mitigation department

Shellpoint has a customer service department and a loss mitigation department. The customer service representatives will try to help you but these representatives are not loss mitigation representatives.

If you’re behind on payments, the most informed people for you to speak with are going to be representatives in the loss mitigation department.

Customer service representatives will tell you that they can help you just as well as someone from loss mitigation can, but that’s not necessarily true.

Push back on them and ask for a warm transfer (in-person transfer) to your SPOC or to a loss mitigation representative (if your SPOC is not available) to ensure you’re receiving the most accurate information.

Shellpoint’s loss mitigation options to avoid foreclosure

Unless you decide to reinstate your loan (meaning – unless you can pay back all the payments you missed at one time), familiarize yourself with the 5 loss mitigation options offered by Shellpoint.

You have to apply and receive Shellpoint’s approval to move forward with one of these options.

  • Loan Modification: A loan modification is a new loan with new terms that allows you to resume mortgage payments without having to pay everything you owe all at once. Usually, your missed mortgage payments get added to your total principal balance and become due at the maturity date of the loan. It is common for loan modifications to offer reductions in interest rates, extended maturity dates, and sometimes – they lower the monthly mortgage payments.
  • Repayment Plan: A repayment plan is an agreement that allows you to resume your regular mortgage payment and pay an extra amount on top of your mortgage payment until you’ve paid back all your missed payments. Once you have paid everything back, you continue making your regular monthly mortgage payment.
  • Forbearance: A forbearance gives you a temporary break in having to pay your mortgage. Once approved for a forbearance, you are allowed to stop payments for the approved months without the lender taking foreclosure action against you.
  • Short Sale: A short sale allows you to sell an underwater property for less than what is owed on the mortgage. Your mortgage lender approves the sale and then typically waives the deficiency balance (the remaining amount owed) so you can sell your home and move on without owing the remaining balance.
  • Deed in Lieu of Foreclosure: A deed in lieu of foreclosure is an agreement between yourself and your mortgage lender where you sign a document giving the house back to the bank in exchange for the bank agreeing not to foreclose on you.

Options for transitioning off of a forbearance plan

If you went on a COVID-19 Forbearance Plan with Shellpoint, you may have additional options to transition back to normal payments:

  • If you have a qualifying investor backing your mortgage (FHA, VA, USDA, Fannie Mae, Freddie Mac) and;
  • You took a COVID-19 forbearance plan as a result of financial hardship caused by the pandemic and;
  • You were current on your mortgage prior to March 1, 2020

You should be able to transition off of your forbearance plan using:

  • A payment deferral – where Shellpoint puts the missed payments on to the end of your loan to help you resume regular monthly payments
  • A partial claim – where Shellpoint creates a subordinate lien containing the lump sum of payments you missed which becomes due at the maturity date of your loan

Shellpoint’s top loan modification problems

Shellpoint is known for being difficult to work with, less so with regards to their daily communication style but more so with regards to one major issue:

Problem: Shellpoint is known for service releasing (or selling your mortgage) to other lenders in the middle of your loan modification (or other loss mitigation) review

Shellpoint has a reputation of opening loss mitigation reviews (for loan modifications or short sales) and then sending a “goodbye letter” shortly after the review is open telling you that your loan is going to be service-released.

The “goodbye letter” will tell you that your loan is being sold to a new servicer (most commonly Selene Financing or Fay Servicing) and it will tell you your “release date” – meaning, the date that your loan will no longer be with Shellpoint.

This happens a lot and is incredibly frustrating.

It’s frustrating because it often means that your review won’t continue until the loan has fully boarded in the new lender’s system. If your review is in the middle of the process (meaning, no decision has been issued), you will likely have to start over with your new lender.

Solution: While you cannot control or prevent the service-release (unfortunately), you can prepare yourself for the service-release in order to set yourself up for the best shot at success with the new lender.

If you’re in the middle of a review and are told that Shellpoint is service-releasing your loan, do the following things to help yourself:

  • Immediately find your new lender’s loss mitigation application. Fill this form out so your loss mitigation package is updated.
  • Update all your supporting financial documentation to the most current versions of the documents (e.g. updated pay stubs and bank statements etc.)
  • Fax your updated package to your new servicer with your social security number on every page (the new servicer won’t have a loan number for you immediately so they identify you with your social security number)
  • On the date that your goodbye letter told you that you would have a new servicer, call the new servicer on that day to help the new servicer prioritize setting up your loan. Since you already faxed your loss mitigation package in before your transfer date, you should be able to point your new servicer to your fax and immediately get your loss mitigation file open

If you are in the middle of a Trial Payment Plan or are pending final loan modification documents, this information SHOULD transfer to your new servicer, meaning you should NOT have to start over.

With that said, it isn’t always easy and sometimes things slip through the cracks so – if you receive a service release letter after you are approved for a loan modification (but before the process is complete), you should probably reach out for help to ensure that nothing falls apart.

Shellpoint Success Story

I recently worked with a client who was in the middle of closing a short sale with Shellpoint. They had already received their short sale approval letter. The approval letter allowed them 30-days to close the sale of their home.

10 days into the 30-day closing period, Shellpoint decided to sell the loan to Selene Financing and the client was told that the short sale would have to start over – meaning, my client would have to start from the beginning with Selene Financing and go back through a 90-day negotiation period.

This would have been detrimental for my client as she had settled subordinate debt and those settlements would have expired.

We worked together to expedite the closing of the sale to beat the service release date. We escalated the matter with Shellpoint and found a supervisor who was willing to review our final documents for closing within 24 hours and record the closing faster than they normally would so the process would not have to start over with Selene.

My client was able to close her short sale and settle her debt per the terms of her original agreement.

Next Steps

It’s great that you are reading about Shellpoint’s loss mitigation options. If you are a Washington State homeowner, the next step would be to schedule a free, mortgage relief consultation with me.

A mortgage and foreclosure attorney will have the experience with your lender and the loss mitigation options that are available to you. Please give me a call today at (425) 654-1674 to discuss your situation.

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