RESPA Requires Servicers Who Receive a Notice of Error

If you submit a qualifying written request under RESPA, your mortgage servicer is required to provide you with particular loan information and correct any inaccuracies.

The Real Estate Settlement Procedures Act (RESPA) mandates that mortgage lenders, loan servicers, and brokers provide borrowers with particular disclosures about the nature and costs of real estate purchases. RESPA also mandates that servicers furnish borrowers with loan information and remedy inaccuracies if a valid written request is made. You have the right to sue the servicer if they do not comply with your request. If you’re facing foreclosure, submitting a valid written request can help.

What is the definition of a qualified written request?

A qualified written request, or QWR, is a letter addressed to the servicer that includes the following information:

• demands loan details (known as a “request for information” under RESPA) and
• requests that the servicer fixes a problem (a “notice of error”).

The letter must enable the servicer to identify the borrower’s loan account and provide a summary of the reasons why the borrower believes the account is incorrect or a thorough explanation of the information the borrower is seeking to qualify as a QWR.

Any written document, such as a letter or a handwritten note, counts as a QWR—but not if it’s written on the servicer’s payment coupon or another payment form.

Where Can I Find QWR Letter Samples?

Visit the Consumer Financial Protection Bureau’s website for sample letters and instructions on what to include in a request for information or notice of error letter.

Ensure you send your letter to the correct address; a servicer may create an address for submitting your request for information or notice of error by providing written notice to the borrower.

Required Servicer Actions

RESPA requires the servicer to react to your QWR within certain time frames. The servicer must acknowledge receipt within five days of receiving a QWR (excluding Saturdays, Sundays, and legal holidays).

Service Provider Requirements: Information or Error Correction

After receiving your letter, the servicer must provide you with the information or correct the error within a specific timeframe and provide you with contact information for future assistance.

• Informational Requests

  In most situations, the servicer is required to supply you with the information you requested within 30 business days—or explain why the information you seek isn’t available—and provide you with contact information, including a phone number, so that you may receive more assistance. If the servicer notifies you of the extension within 30 days and explains the delay, you can give it another 15 business days to respond. (However, if you requested the identity, address, or other contact information for the owner of your mortgage loan, the servicer must respond within ten business days.)

• Error Notifications

  The amount of time service has to reply to an error notice is determined by the type of issue. If the servicer failed to provide you with an accurate payback statement after requesting one, they must answer within seven business days of receiving your letter. Suppose the servicer launched a foreclosure when it shouldn’t have, improperly moved for a foreclosure judgment or order of sale, or performed a foreclosure sale in violation of federal law. In that case, the servicer must react before the foreclosure sale or within 30 business days of receiving your letter. If the servicer committed another mistake, such as misapplying payments or overcharging fees, it has 30 days to respond after receiving your letter. Though, in most situations, it can extend the response time by 15 working days if it notifies you of the extension within the 30-day timeframe and explains why.

When a Servicer Isn’t Required to Help You

RESPA allows the servicer off the hook in some cases. The servicer is not required to assist you if, for example:

• You had inquired about the situation previously, and the servicer had already responded.
• The information is kept private.
• Your request is rather broad. For example, if you tell the servicer you believe it made a mistake on the account but don’t describe that mistake and ask for all of the servicer’s data on your account, the servicer is unlikely to react.
• You have a question concerning a debt that has already been moved to another servicer or has been paid off more than a year ago.

Even in these cases, the servicer must notify you within five business days if it cannot assist you and explain why.

RESPA Violations Damages

Where a servicer violates RESPA’s standards, a borrower may be entitled to recover actual damages, extra damages up to $2,000 (if there is a pattern or practice of servicer noncompliance), and attorneys’ fees and costs. Violations have a three-year statute of limitations.

In a Foreclosure, creating a QWR is beneficial because it forces the servicer to give information regarding the account, a QWR can be a strong weapon for a borrower facing foreclosure. Because a court does not supervise the process, QWRs are especially useful in non-judicial foreclosures.

The court may direct the servicer to submit account information for the borrower’s examination in a judicial foreclosure. Because a court isn’t engaged in a non-judicial foreclosure, submitting a QWR is a good way for you to acquire information about your account from the servicer, such as payment history or communication logs. This information can assist you in deciding whether or not to file a lawsuit to stop the non-judicial foreclosure.

When Should You Seek Advice?

If you’re facing foreclosure and believe it’s due to a servicer error, speak with a foreclosure lawyer right away to receive assistance on your case. Sending a QWR to the servicer is unlikely to stop the foreclosure from proceeding, except in limited circumstances, such as if you assert specific loss mitigation mistakes. The servicer incorrectly started the foreclosure during the 120-day pre-foreclosure period or dual-tracked; the lender or servicer may generally initiate or continue a foreclosure even if a qualified written request is outstanding. If the servicer receives your notification of error more than seven days before the foreclosure auction, it must remedy the issue before proceeding with the foreclosure sale.

If you aren’t yet in foreclosure and the servicer hasn’t responded to your notice of error or request for information (or if the servicer claims it didn’t make a mistake or refuses to provide you with the information you requested), speak with a lawyer about your options.