Five error notices, one refund, and a foreclosure the borrower says never should have happened
A Florida homeowner says her mortgage servicer twice force-placed flood insurance she never needed, then moved to foreclose over the resulting charges.
The lawsuit, filed July 2, 2026 in federal court in Miami, lays out a servicing dispute that started small and grew into a foreclosure. The borrower owns an eighth-floor condo in Aventura. According to the filing, her building carries a master flood policy that insures the whole structure, her unit included. She bought the place in February 2023, and when her first servicer asked for proof of that coverage in October 2023, she says she provided it and the matter ended there, with no lender-placed policy and no extra charges.
Shellpoint took over servicing in the summer of 2024. The loan was current, the suit says, with a monthly payment of $1,987.13.
In October 2024 the servicer sent a flood insurance notice, but the borrower says the link she needed to upload her proof was buried in small print at the bottom of the page. On November 18, 2024, Shellpoint force-placed a flood policy and began drawing the premium from her escrow. She says she found the link that same month and uploaded the master policy declaration page, the document that shows the policy number and the insurer's identity and contact details. The servicer received it, the filing states, and did not cancel the policy or refund the charges.
From there the numbers climbed. A January 14, 2025 escrow analysis showed the account at negative $4,039.33 with a shortage of $5,741.54, which the suit ties to the force-placed charges. Shellpoint spread that shortage over sixty months and raised the monthly payment to $2,637.49, effective March 1, 2025.
The borrower pushed back in writing, over and over. Court papers describe five notices of error between February 2025 and April 2026, each explaining that the building was already covered. RESPA and Regulation X give a servicer tight windows on those notices - roughly five business days to acknowledge and thirty to correct the error or explain why it thinks there isn't one. The lawsuit says Shellpoint acknowledged the disputes but missed the deadlines, not substantively answering the first two until August 5, 2025, when it said no error had occurred.
One day later, on August 6, the servicer reversed itself, cancelling the first policy back to its start date and confirming there had been no lapse in coverage, according to the filing. It refunded $3,125.77 on August 7. But the suit says the cleanup stopped there. The inflated payment stayed, an $89.20 late charge stayed, and the past-due credit reporting stayed. The servicer said it "will not remove the reported delinquencies," the filing states, quoting the servicer's own letter.
The account, meanwhile, was heading toward foreclosure on the disputed numbers. An August 25, 2025 default notice said the loan's owner - the filing identifies it as Fannie Mae - had instructed the servicer to begin foreclosure. The servicer assessed $2,315.00 in foreclosure-related costs, the suit says, made up of a $1,620.00 attorney charge, a $540.00 foreclosure charge, and a $155.00 title charge.
Then, the suit says, it happened again. In late 2025 Shellpoint force-placed flood insurance a second time, with charges of $854.63, $284.88, and $284.88 drawn between December 2025 and March 2026 - $1,424.39 in all - even though the borrower had submitted new proof of coverage in December 2025. The servicer did not refund those charges, according to the filing.
By a March 18, 2026 statement, the suit says, the servicer reported that foreclosure had been initiated, demanded $15,281.24 to reinstate the loan, and had accelerated the balance to $304,058.00.
The filing also points to a March 31, 2026 Statement of Charges from the Washington State Department of Financial Institutions, which it says accuses Shellpoint of similar escrow and force-placement failures across many loans. The suit is careful to state that the servicer can contest those charges, that they remain pending, and that they are offered as evidence of a claimed pattern, not as proven findings.
The homeowner brings two counts. One alleges violations of RESPA and Regulation X. The other alleges a violation of Florida's Consumer Collection Practices Act, a state law that bars trying to collect money the collector knows is not owed. She seeks actual, statutory, and punitive damages along with injunctive and declaratory relief.
None of the allegations have been proven, and no court has ruled on any of the claims.
