The dual-tracking claim at the heart of this case should put every servicer on alert
Shellpoint Mortgage Servicing faces a seven-count federal lawsuit alleging it repeatedly mishandled a couple's loss mitigation applications for more than eighteen months.
Thomas Maletick Jr. and Cynthia M. Maletick, homeowners in Pittsburgh, filed the suit on March 10, 2026, in the U.S. District Court for the Western District of Pennsylvania. The case, Maletick et al v. Newrez LLC d/b/a Shellpoint Mortgage Servicing (Case No. 2:26-cv-00389-NR), accuses the servicer of fumbling their efforts to avoid foreclosure — and, at one point, advancing the foreclosure while their application was still pending.
According to court filings, the Maleticks took out a $135,000 mortgage in October 2006. The loan was modified twice — in 2014 under the Home Affordable Modification Program and again in 2019. Shellpoint has serviced the loan since December 2016.
Their financial difficulties began in early 2020, when Mr. Maletick contracted COVID-19 four times between February 2020 and March 2021, resulting in major income loss. A foreclosure action followed in July 2022 in Allegheny County.
What came next, the filings allege, was a drawn-out cycle that will sound uncomfortably familiar to many in mortgage servicing. With the help of a housing counselor from NeighborWorks Western Pennsylvania, the Maleticks submitted multiple loss mitigation applications beginning in September 2023. The servicer repeatedly claimed documents were missing — without specifying which ones — requested paperwork that had already been sent, and let applications go stale before responding.
In one instance, an updated application was submitted on February 8, 2024. Forty-one days passed before the servicer flagged missing documents — including items already provided. Under Regulation X, a complete application must be evaluated within thirty days, making that delay a potential compliance concern for any servicing operation.
The most striking allegation involves dual-tracking. On January 23, 2025, the Maleticks submitted another application. No acknowledgment or deficiency notice followed. Then, on February 24, 2025, the loan trust moved for default judgment in the foreclosure — while the application sat unevaluated. Regulation X prohibits servicers from advancing foreclosure proceedings when a facially complete loss mitigation application has not yet been reviewed.
The lawsuit also challenges Shellpoint's response to a formal information request sent by the Maleticks' attorneys in April 2025. According to the filings, Shellpoint's response omitted key items — including servicing notes and loss mitigation correspondence — and dismissed the request as "overly broad." Two follow-up notices of error were sent. The first, the filings state, went entirely unanswered.
The suit seeks actual damages, statutory damages of $2,000 per RESPA violation, treble damages under Pennsylvania's consumer protection law, and attorneys' fees. A jury trial has been demanded.
No determination has been made in the case, and all allegations remain unproven. Shellpoint has not yet responded to the suit.
For mortgage servicers, the case serves as a sharp reminder of what can go wrong when loss mitigation workflows break down — and how quickly documentation gaps and communication failures can escalate into federal litigation.
