Notice of Error RESPA

The Consumer Financial Protection Bureau (CFPB) modified Regulation X, which administers the Real Estate Settlement Procedures Act, on January 10, 2014. (RESPA). These rules concern a servicer’s duty to respond to – and, if necessary, fix – inaccuracies asserted by borrowers regarding the servicing of their home mortgage loans, among other things.

The Consumer Financial Protection Bureau (CFPB) modified Regulation X, which administers the Real Estate Settlement Procedures Act, on January 10, 2014. (RESPA). These rules concern a servicer’s duty to respond to – and, if necessary, fix – inaccuracies asserted by borrowers regarding the servicing of their home mortgage loans, among other things.

Consumer lawyers are attempting to use RESPA and Regulation X for purposes Congress never intended, from attempting to revive time-barred claims or avoid the fate of res judicata to simply inundating servicers with requests for information already known and, in many cases, already obtained through similar requests for discovery in foreclosure proceedings.

Borrowers frequently use the regulations and provisions to build the foundation for new litigation against a servicer, either in advance of or in response to filing a foreclosure action. For example, a borrower may send a QWR to a servicer and argue that the answer is insufficient. The servicer’s investigation results are inaccurate, notwithstanding the extensive responses and documents supplied.

However, the court noted the statute’s potential for abuse in a recent Southern District of Florida case that granted final judgment for the servicer on charges. It failed to reply sufficiently to the borrower’s five QWRs. “RESPA exists to prohibit abuse of borrowers by servicers—not to permit abuse of servicers by borrowers,” the court in Russell v. Nationstar Mortgage, LLC said, quoting another district court.

The Russell court went on to say that “The relevant requirement for loan servicers to meet the substance of RESPA is good faith, not borrower satisfaction. In retrospect, Congress could hardly have intended for [the act] to function as a “gotcha”…”.

While servicers should be aware of the provisions of RESPA and Regulation X, when confronted with a Notice of Error or QWR, they can at least rest assured that the inevitable dissatisfied borrower is not the criterion for servicer responsibility under RESPA.

Any written letter from the borrower asserting an error, including the borrower’s name, information allowing the servicer to identify the borrower’s mortgage loan account, and the error the borrower believes has happened. A message on a payment coupon or other payment form provided by the service does not have to be viewed as an error notice.

When is it possible to prolong the 30-day response period? If the servicer tells you of the extension within the 30 days and informs you of the reason for the delay, you will have an additional 15 days to react.

When the service provider must reply more quickly, if you’re trying to find out the identity, address, or other contact information for the owner of your mortgage loan, the servicer must respond within ten business days. In some cases, the servicer is not required to respond to your notification of error or request for information, such as when:

• Your letter concerns a mistake that is nearly identical to the one you previously claimed (and the servicer has already responded to it)
• Your letter wants the same information as a previous request (and the servicer already responded to your request)
• your request is too general, or
• You’re inquiring about a loan transferred to a different servicer (or paid off) over a year ago.

Even if your notice meets one of the four conditions listed above, the servicer cannot just disregard it. It must notify you within five business days if it determines that it does not have to deal with your notification or request and must explain why.

Understand your legal rights.

Your servicer is required by the Real Estate Settlement Procedures Act (RESPA) to:

• Within five business days of receiving your letter (“qualified written request”), acknowledge it in writing.
• Within 30 business days, either repair your account or conclude that there is no error.
• Send you a written notification of the action taken and why and the name and phone number of someone to contact for more information or assistance.

After a transfer to a new service, you get a 60-day grace period. That means you won’t be charged a late fee if you accidentally send your on-time mortgage payment to the previous servicer, and your new servicer won’t report it as late to a credit bureau.

Missed Mortgage Payments: Foreclosure and Default

If you skip one or more payments on your mortgage loan, your debt is usually regarded as default; however, you may have exceptional privileges during the COVID-19 epidemic.

In other cases, the servicer may arrange “default-related services,” such as inspections, lawn mowing, landscaping, and repairs, to protect the property’s value. These services will be charged to your loan account, costing hundreds or thousands of dollars.

If the lender decides to pursue foreclosure, the procedure might cost you hundreds or thousands of dollars. This might make keeping up with payments, making back payments, and keeping your house even more difficult.

Stay in touch with your servicer if you’re facing foreclosure. Try to work out a plan to make your past payments, alter your loan, enter into a repayment plan, or receive a temporary decrease or suspension of payments. Your new servicer may be considered a debt collector if your loan defaulted when they took over, and you may have additional rights.

Mortgage Lending Complaint Legal Assistance

To comprehend the documentation’s complexity and the available financial facts, the lawyer assigned to the case may need to consult with an expert witness. The case may necessitate a thorough understanding of the lender’s policies and the mortgage process at the time.

Obtaining Assistance

Consider talking with a lawyer if the servicer fails to respond to your notice of error or request for information or if the servicer disputes that it made an error or refuses to furnish you with particular information. Talk to an attorney straight away if you’re facing a foreclosure sale. Sending a notice of error or a request for information to the servicer is unlikely to prevent a foreclosure. An attorney can assist you in making decisions about your circumstances and enforce your rights.