In a class-action lawsuit filed in the United States District Court for the Eastern District of Virginia, plaintiff Mariel Castellon accuses Newrez, LLC (doing business as Shellpoint Mortgage Servicing) and Gulf Harbour Investments Corporation of fraudulently inflating mortgage interest amounts. The suit alleges that these companies retroactively charged interest on loans previously set to 0% by prior servicers, misleading borrowers into believing they owed more than they did. Castellon claims she was falsely led to believe she owed approximately $200,000 in interest alone. The case involves violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), the Virginia Consumer Protection Act (VCPA), and other federal statutes.
Shellpoint and Gulf Harbour are accused of collaborating with other investors to collect on “zombie” second mortgages—dormant debts from before the 2008 financial crisis. The complaint details how these companies allegedly sent false statements through mail and electronic communications, asserting inflated loan balances. Castellon seeks damages, including treble damages under RICO, as well as declaratory relief to prevent further collection of these disputed amounts.
The court filing also highlights Shellpoint’s failure to respond adequately to a Qualified Written Request submitted by Castellon, violating the Real Estate Settlement Procedures Act (RESPA). This failure has reportedly caused her significant emotional distress and financial harm.
Source: 125cv01917_Mariel_Castellon_v_Newrez_LLC_Complaint_Eastern_District_Virginia.pdf
