Shellpoint Mortgage Servicing, a division of NewRez LLC, is the target of a Shellpoint mortgage lawsuit docket that spans federal and state courts and covers alleged “zombie” second mortgage collection, illegal property inspection fees, mishandled loss mitigation, misleading foreclosure notices, and a $4.65 million enforcement settlement with the Massachusetts Attorney General. Several of these cases remain active in 2026. What follows is where each stands and what the claims involve.
Zombie Second Mortgage Class Actions
The largest cluster of active litigation involves home equity lines of credit (HELOCs) originated before the 2008 financial crisis. Borrowers say they believed the debts were effectively dead after bankruptcy discharge, only to have Shellpoint or its predecessor Specialized Loan Servicing (SLS) resurface years later demanding large sums in accumulated interest and fees, sometimes under threat of foreclosure.
Hodges v. NewRez in Massachusetts
The lead case is Hodges v. NewRez, LLC d/b/a Shellpoint Mortgage Servicing and The Bank of New York Mellon, filed in the U.S. District Court for the District of Massachusetts in January 2025.1National Consumer Law Center. Hodges v. NewRez, LLC d/b/a Shellpoint Mortgage Servicing and The Bank of New York Mellon Plaintiff Eva Hodges took out a $100,000 HELOC in 2005 and filed for bankruptcy in 2008. She alleges that for the next 16 years, SLS (later Shellpoint) sent her no billing statements while continuing to assess interest and fees. In January 2024, she received a Notice of Default and Intent to Foreclose claiming she owed $152,820 in arrears. A later payoff quote put the total above $200,000, with roughly $100,000 consisting of interest and fees accrued during the years of silence.2National Consumer Law Center. Hodges v. NewRez Amended Class Action Complaint
The proposed class includes all consumers with HELOCs serviced by SLS before Shellpoint’s acquisition whose loans were discharged in bankruptcy and who were never sent monthly statements while interest and fees accumulated.3National Consumer Law Center. Hodges v. NewRez Class Action Complaint The complaint asserts violations of the Truth in Lending Act, the Fair Debt Collection Practices Act, and Massachusetts consumer protection statutes.
NewRez and BNY Mellon moved to dismiss in May 2025, arguing that mortgage servicers who do not own the loan are not “creditors” subject to TILA and that the FDCPA cannot enforce TILA billing obligations.4National Mortgage Professional. Shellpoint, BNY Mellon Ask Court to Dismiss Zombie Second Mortgage Class Action On January 26, 2026, U.S. District Judge Allison Burroughs granted the motion, ruling that courts have “consistently ruled that the FDCPA is not properly used as an enforcement mechanism for the TILA” and that Hodges had not identified which entity was responsible for sending statements during the 16-year gap. The dismissal came with leave to amend, giving the plaintiff 21 days to refile.5National Mortgage News. NewRez Beats Zombie Seconds Suit Over Decades-Old HELOC Debt As of March 2026, the case remains active and a Second Amended Complaint has been filed.1National Consumer Law Center. Hodges v. NewRez, LLC d/b/a Shellpoint Mortgage Servicing and The Bank of New York Mellon
Parallel Cases in Georgia and North Carolina
NewRez faces similar zombie mortgage claims in at least two other federal courts. A proposed class action filed in the Northern District of Georgia in late 2023 alleges that Shellpoint and SLS inflated borrowers’ balances on long-dormant second mortgages.6National Mortgage News. NewRez Asks Judges to Dismiss Zombie Mortgage Lawsuits In North Carolina, Tuttle v. NewRez, LLC was filed in the Middle District of North Carolina in March 2025. As of February 2026, a judge dismissed the proposed class action’s claims of unlawful interest collection.7Law360. NC Judge Tosses Zombie Mortgage Debt Collection Suit In both cases, NewRez has raised the same defenses used in Massachusetts: that Shellpoint is not a “creditor” under TILA and that RESPA does not apply as plaintiffs allege.
Property Inspection Fee Cases
A separate line of litigation targets Shellpoint’s practice of charging property inspection and preservation fees to borrowers whose states or loan terms prohibit them.
Maryland: Yates and Richards
Maryland law bars lenders from passing property inspection fees on to residential mortgage borrowers. The Maryland Commissioner of Financial Regulation examined Shellpoint’s records between 2015 and 2018 and found the company had collected more than $270,000 in illegal inspection fees. On August 6, 2018, Shellpoint signed a Memorandum of Understanding requiring it to pay fines, return the fees, and build a new system to prevent recurrence.8FindLaw. Yates v. NewRez LLC
A class action followed. In Yates v. NewRez LLC (Case No. 8:21-cv-03044, D. Md.), plaintiff Irene Yates alleged Shellpoint ordered monthly property inspections on accounts delinquent 90 days or more and charged the fees to borrowers. Yates herself was charged $105.00 and several smaller amounts for inspections on her Lanham, Maryland home in 2018. The suit invoked Maryland’s usury statute, the Maryland Consumer Debt Collection Act, and the Maryland Consumer Protection Act. In August 2023, the court granted class certification, defining the class as Maryland residents whose Shellpoint-serviced Fannie Mae loans were charged property inspection fees.8FindLaw. Yates v. NewRez LLC The case remained active as recently as March 2025.9PACER Monitor. Yates v. NewRez LLC Docket Entry
A related Maryland case, Richards and Maldonado v. NewRez LLC d/b/a Shellpoint Mortgage Servicing (Case No. ELH-20-1282), alleged broader fee-churning: improper late fees, property valuation fees, breach letter fees, failures to correct inaccurate data inherited from prior servicers, and CARES Act violations. The court granted the defendant’s motion to dismiss in part and denied it in part.10U.S. District Court, D. Md. Richards v. NewRez LLC Memorandum Opinion
Washington: Rudin Settlement
An earlier class action, Rudin v. MTGLQ Investors/NewRez (Shellpoint) (Case No. 19-2-17081-6 SEA), targeted Shellpoint’s property preservation and inspection fees in Washington state. The court certified four classes of Washington borrowers: those who paid or were charged property preservation fees on non-vacant properties, and those who paid or were charged inspection fees exceeding $50 per inspection. The settlement fund totaled $152,000. Members who had already paid the disputed fees could submit claims for a share of the fund; those with outstanding charges would have fees automatically reversed or reduced.11BJT Lawyers. Rudin Class Action Settlement12BJT Legal. Rudin v. MTGLQ Investors Long-Form Notice The final approval hearing was held in December 2022.
Loss Mitigation and Dual-Tracking Claims
In March 2026, Pennsylvania homeowners Thomas and Cynthia Maletick filed a seven-count lawsuit against Shellpoint in the Western District of Pennsylvania, alleging the servicer mishandled their loss mitigation applications over an 18-month period. The central claim is dual-tracking. The plaintiffs say they submitted a loss mitigation application on January 23, 2025, but the loan trust moved for a default judgment in the ongoing foreclosure case a month later, on February 24, 2025, before the application had been evaluated. Under Regulation X of RESPA, servicers are generally prohibited from advancing a foreclosure while a complete loss mitigation application is under review.13Mortgage Professional America. Homeowners Sue Shellpoint in Seven-Count Suit Over Loss Mitigation Failures
The complaint also alleges Shellpoint repeatedly told the Maleticks their documents were missing without specifying which ones, requested paperwork already submitted, let applications go stale, and failed to respond adequately to a formal information request. The plaintiffs are seeking actual damages, $2,000 in statutory damages per RESPA violation, treble damages under Pennsylvania consumer protection law, and attorneys’ fees. As of the filing date, Shellpoint had not yet responded, and no rulings have been issued.13Mortgage Professional America. Homeowners Sue Shellpoint in Seven-Count Suit Over Loss Mitigation Failures
Misleading Foreclosure Notices in Massachusetts
In Bryant v. NewRez, LLC et al. (Case No. 1:21-cv-40011), a borrower alleged that NewRez, Shellpoint, and Freddie Mac sent default and right-to-cure notices to Massachusetts homeowners containing materially misleading statements. The notices told borrowers they could avoid foreclosure by paying the total past-due amount “before a foreclosure sale takes place,” but omitted a standard mortgage provision requiring reinstatement at least five days before the sale date. The plaintiff argued the omission rendered foreclosures conducted after such notices invalid.14ClassAction.org. Class Action Claims NewRez, Shellpoint, Freddie Mac Sent Default/Right-to-Cure Notices Containing Misleading Statements The case was originally filed in state court in October 2020 and removed to federal court in January 2021.15ClassAction.org. Bryant v. NewRez LLC et al. Complaint
Massachusetts Attorney General Settlement
On December 17, 2025, Massachusetts Attorney General Andrea Joy Campbell announced a $4.65 million settlement with Newrez LLC as successor to Specialized Loan Servicing. The AG’s investigation covered roughly 24,000 Massachusetts properties and found that SLS had sent notices demanding borrowers cure defaults in 33 days despite a state-mandated 90-day right-to-cure period. The investigation also found failures to notify borrowers of loan modification rights and failures to provide relief required during the COVID-19 pandemic.16Massachusetts Attorney General. AG Campbell Reaches $4.65 Million Settlement With Mortgage Loan Servicer for Unlawful Foreclosures and Deceptive Business Practices
Under the settlement, Newrez must pay the $4.65 million, which includes restitution for affected borrowers, implement new compliance procedures, and submit regular compliance reports to the Attorney General’s office.16Massachusetts Attorney General. AG Campbell Reaches $4.65 Million Settlement With Mortgage Loan Servicer for Unlawful Foreclosures and Deceptive Business Practices
Complaint Trends and Corporate Context
Consumer complaints to the Consumer Financial Protection Bureau help place the litigation in context. Shellpoint saw a spike in home-equity-related CFPB complaints in the third quarter of 2024, peaking at 195. Industry reporting attributed the surge to the onboarding of loans from Specialized Loan Servicing following Rithm Capital’s May 2024 acquisition of SLS’s parent company for $715.5 million.17HELN News. Home-Equity CFPB Complaints Report18U.S. Securities and Exchange Commission. Rithm Capital Corp. SEC Filing Complaint volume has since declined, falling to 63 in the first quarter of 2025 and 46 in the second quarter, though Shellpoint remained the most-complained-about company in the home-equity category during that period.
NewRez, headquartered in Fort Washington, Pennsylvania, is a wholly owned subsidiary of Rithm Capital Corp. and one of the largest mortgage servicers in the United States, handling roughly 1.94 million loans with nearly $400 billion in unpaid principal balance as of mid-2023.19S&P Global. Newrez LLC Servicer Report Shellpoint has been a NewRez brand since 2014, and the 2024 SLS integration is directly tied to several of the active zombie mortgage claims.20U.S. Securities and Exchange Commission. Rithm Capital Corp. Press Release