NewRez Foreclosure Defense

NewRez calls itself one of the largest non-bank mortgage originators in the United States. Prior to 2018, the company was known as Penn Financial but it was during that year that the company was acquired by New Residential Investment Corporation and was rebranded as NewRez LLC. Shortly thereafter, the company acquired Shellpoint Partners LLC, commonly referred to as simply Shellpoint.

NewRez offers conventional loans, FHA loans, VA loans, refinancing, and more. As with many of the major mortgage lenders and servicers in the country, NewRez is not always honest in their dealings and they have been the center of many lawsuits in the past. Below, one of our Fort Lauderdale foreclosure defense lawyers outlines more about NewRez, and what you can do if the company violates your rights.

What are the Drawbacks to Obtaining a Loan from NewRez?

As with any company that offers mortgage loans, there are some drawbacks to obtaining a loan from NewRez. First and foremost, they tout themselves as a company that is great for first-time homebuyers who are unsure of the type of mortgage they need. They may advertise this in order to attract customers who are easily taken advantage of, which has happened according to many lawsuits in the past.

NewRez also requires customers to work with a loan officer, which is another disadvantage. Loan officers are representatives of credit unions, banks, and other financial institutions. Their main role is to help borrowers with the application process, but it is important to remember that they still work for the institution and so may not always have the customer’s best interests at heart. Still, while they work for the financial institution, they are paid by the consumer, which means it costs even more to obtain a home loan.

Lawsuits Against NewRez

NewRez has had many lawsuits filed against them in the past, including class actions. One of these stemmed out of West Virginia in which the plaintiff argued that they were taken advantage of and were subject to predatory loan practices. The plaintiff was solicited by Countrywide to purchase a foreclosed property appraised at $71,500. It was not until much later that the plaintiff learned the property was worth much less than that. The plaintiff, Thomas Root, claimed in the lawsuit that he had trouble understanding financial details and that NewRez took advantage of that.

NewRez, operating as Shellpoint, also settled another class action lawsuit for $500,000. This lawsuit also alleged that borrowers were sent misleading mortgage statements. Consumers stated that they had a forbearance plan under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Still, the customers received misleading mortgage statements while they were still in forbearance.

The same lawsuit also alleged that Shellpoint violated the Fair Debt Collection Practices Act (FDCPA). The Act prohibits lenders from taking certain actions, including calling consumers very early in the morning or very late at night, using harassing or threatening language, representing themselves as a lawyer when they are not, and more.

Defenses to NewRez Foreclosure

There are many common defenses to foreclosure in Florida including lack of standing, loan modifications, deeds-in-lieu of foreclosure, and more. When it comes to NewRez, and in particular the class action lawsuits they have faced, some defenses may be more appropriate than others. These include:

• Fraud: Fraud played a role in both of the previously mentioned class action lawsuits. In the first case, the plaintiff was misled about the value of the home, which is a fraudulent practice. In the second case, consumers were sent misleading mortgage statements, which also constituted fraud. Mortgage lenders and servicers must always remain honest and transparent in all of their interactions with consumers and when they are not, it can be classified as fraud.
• Undue influence: The defense of undue influence is most appropriate in the first class action lawsuit. Undue influence refers to influencing someone to act in a certain way without regard to the consequences. Considering that the plaintiff was not aware of the consequences, one could argue he was under undue influence.
• Unclean hands: The defense of unclean hands is a combination of the two defenses above. When a person or company is accused of having unclean hands, it means they have engaged in fraudulent, illegal, or oppressive actions in order to file a lawsuit. NewRez did not only engage in fraud, but they have also been accused of violating the law by not upholding the rights of consumers outlined in the FDCPA.

The above are affirmative defenses. An affirmative defense means the defendant in a foreclosure lawsuit did default on their mortgage but they had a valid reason for doing so.

Filing an FDCPA Lawsuit

While it is not a defense, consumers can file their own lawsuit against any company that violates the FDCPA. Those who are successful with their lawsuit can claim damages for any loss they sustained. For example, the plaintiff who was misled about the value of his home stated that he had suffered emotional distress and the fear of losing his home. These damages are known as actual damages because they are losses a plaintiff actually lost.

The FDCPA also allows for an additional award of $1,000. This is known as statutory damages. Lastly, a plaintiff can also recover their attorney fees and other legal costs they incurred as a result of filing the lawsuit. Regardless of whether you need to file a lawsuit on your own or you need to defend against a foreclosure lawsuit, it is always recommended that you work with a Fort Lauderdale foreclosure defense lawyer.

Our Foreclosure Defense Lawyers in Fort Lauderdale are Ready to Help

If you have a mortgage with NewRez and they are now taking legal action against you, it is important to contact our Fort Lauderdale foreclosure defense lawyers. At Loan Lawyers, our seasoned attorneys can help you fight back against predatory lending practices, prepare a strategy for your defense, and perhaps even help you keep your home. Call us now at (954) 523-4357 or contact us online to schedule a free consultation and to get more information.