Published
November 14, 2026
Louisiana homeowners whose mortgage servicer, NewRez (Shellpoint Mortgage Servicing) or GMFS, held $25,000 or more in home insurance settlement proceeds for more than 30 days without paying interest, beginning August 1, 2022, may qualify to claim 3% annual interest on those funds from the Shellpoint and GMFS class action settlement. Claims are open through February 26, 2027, and the final approval hearing is set for January 27, 2027.
Current Status
Claims are open. The deadline is February 26, 2027, for online claims and for paper claim forms postmarked by that date. Judge Jennifer F. Richard of the 17th Judicial District Court for the Parish of Lafourche preliminarily approved the settlement and conditionally certified the class in an order signed October 6, 2026, but the settlement is not yet final: the court will consider final approval at a hearing on January 27, 2027. No payments have been made, and none will be until the court grants final approval and any appeals are resolved.Free settlement alerts
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Status
Claims Open
Claim Deadline
February 26, 2027
Estimated Payout
3% interest
Per year · on held proceeds of $25,000+ · from day 31
Proof Required
Yes
Signed claim form with date of birth and last four SSN digits · online login not yet checked
What Changed Recently?
GMFS, LLC and NewRez, LLC, which does business as Shellpoint Mortgage Servicing, agreed to settle Vaughn v. GMFS, LLC and NewRez, LLC, a Louisiana state court class action over interest on home insurance money the companies held in escrow. The court granted preliminary approval in an order signed October 6, 2026, after a September 24 hearing, and the court-authorized settlement website and notice are now live with claim, opt-out and objection deadlines. The defendants deny all allegations and any wrongdoing, and the settlement agreement says they dispute that they were required to pay 3% interest under Louisiana law or any Fannie Mae or Freddie Mac guideline; they agreed to pay it to eligible claimants for settlement purposes only.Who Qualifies?
The settlement class covers individuals who own residential property in Louisiana and meet all three conditions:- NewRez was the loan servicer, or GMFS was the mortgagee, on a mortgage loan secured by that property;
- beginning August 1, 2022, NewRez or GMFS held insurance settlement proceeds of $25,000 or more for more than 30 days without paying interest on them; and
- the borrower was not in default, not past due on mortgage payments and not in foreclosure at the time the proceeds were held.
How Much Can You Get?
Each class member who submits a timely, valid and verified claim form will receive interest at 3% per year on the held insurance proceeds. Interest runs from the 31st day the proceeds sat in escrow until the date the escrowed balance fell below $25,000. As a rough illustration, $60,000 held for a full year after day 30 would earn about $1,800; actual amounts depend on each borrower’s balance and how long it stayed at or above $25,000, which the administrator calculates. A claims schedule filed with the preliminary approval motion lists 809 potential class members with amounts ranging from a few dollars to about $21,000, and puts the potential total at $1,076,815.51 if every class member files.The notice does not set a total settlement fund or a cap. Notice and administration costs, attorneys’ fees and expenses of up to $350,000, and a case contribution award of up to $2,500 are paid separately by the defendants and do not reduce class members’ payments.
What Proof or Notice ID Is Required?
A claim form must be filed; payment is not automatic. The notice calls for a “valid and verified” claim form, and the settlement agreement says NewRez will give the administrator a class list of names and addresses. The paper claim form, which carries a reference number printed by the administrator, asks for each borrower’s name, mailing address, date of birth and the last four digits of their Social Security number, plus a signed certification under penalty of perjury that the loan, escrow and payment-status conditions were met. If more than one borrower is named on the loan, each must complete and sign it, except that only one of two married co-borrowers needs to. OCA has not been able to review the online claim form, so whether it requires a login ID is not confirmed here. No receipts are required; the interest is calculated from the servicer’s own escrow records.What Is the Deadline?
Claims must be submitted online by February 26, 2027, or mailed on a paper claim form postmarked by February 26, 2027. Requests for exclusion must be mailed and postmarked by December 28, 2026. Objections, and any notice of intent to appear at the hearing, must be filed with the court and mailed to counsel by December 28, 2026.How Do You Take Action?
Claims are filed through the official Louisiana Insurance Interest Settlement website, which links to the online claim form and offers instructions and a claim form in Spanish. Paper claim forms, opt-out requests and objections go to the addresses listed in the notice and on the settlement website. A class member who does nothing receives no payment and gives up the right to sue the defendants over the released claims.What Happens Next?
The final approval hearing is scheduled for January 27, 2027, at 1:30 p.m. CST in Division B of the 17th Judicial District Court in Thibodaux, Louisiana, where the court will also consider the fee request and the case contribution award. The date can change without further notice. Payments are to be distributed after final approval and after any appeals are resolved; no payment date has been announced.Sources and Verification
- Louisiana Insurance Interest Settlement — the court-authorized settlement website run by Kroll Settlement Administration
- Notice of Class Action and Proposed Settlement (embedded below)
- Stipulation and Settlement Agreement, Vaughn v. GMFS, LLC and NewRez, LLC, Case No. C-152523, 17th Judicial District Court, Parish of Lafourche, Louisiana
Questions
What are insurance settlement proceeds in this case?
The notice defines them as money from an insurance settlement for damage to a borrower’s Louisiana home that the mortgage servicer received and held in escrow until it was paid out to the borrower, the usual arrangement when a homeowners insurer makes a repair check payable to both the owner and the lender.
Does a homeowner who fell behind on the mortgage qualify?
Not under the class definition. It covers only borrowers who were not in default, not past due on payments and not in foreclosure at the time the insurance proceeds were held.
Do attorneys’ fees reduce the payments?
No. The notice says GMFS and NewRez will pay notice and administration costs, attorneys’ fees and costs of up to $350,000, and a case contribution award of up to $2,500 separately, so those amounts do not come out of class members’ interest payments.
What did the lawsuit claim?
The plaintiff alleges that GMFS and NewRez violated Louisiana Revised Statute 6:337 by not paying interest on escrowed insurance settlement proceeds of $25,000 or more held 30 days or longer. The defendants deny the allegations and any wrongdoing, dispute that they owed 3% interest, and the court has not decided who is right.
Official Settlement Notice
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Settlement Amount
3% annual interest on held proceeds · about $1.08 million if all 809 class members claim
Case Title
Racheal M. Vaughn v. GMFS, LLC and NewRez, LLC, d/b/a Shellpoint Mortgage Servicing
Case Number
C-152523
Court
17th Judicial District Court, Parish of Lafourche, Louisiana
Final Approval Hearing
January 27, 2027 at 1:30 PM CST
Division B, Thibodaux, Louisiana
Administrator
Kroll Settlement Administration
Official Website
Louisiana Insurance Interest Settlement
