RESPA Violations and Foreclosure

Under RESPA, your mortgage servicer is required to provide you certain information related to your loan and to correct any errors. If not, you can sue and recover money damages.

The Real Estate Settlement Procedures Act (RESPA) was enacted to protect consumers and primarily requires mortgage lenders, servicers, and brokers to provide borrowers with certain disclosures regarding the nature and costs related to the purchase of real estate. While RESPA contains many protections for consumers, the section that may be most useful for borrowers facing foreclosure is Section 6, which pertains to qualified written requests.

What is a Qualified Written Request?

A qualified written request, or QWR, is a written letter sent to the mortgage servicer that:

  • requests information pertaining to the mortgage loan, or
  • requests that the servicer correct an error (such as unwarranted late charges or misapplied payments).

The correspondence can both dispute a servicer action and seek information--either request by itself qualifies as a QWR. Additionally, a request for information about the status of a loan modification qualifies as a QWR. Woods v. Greenpoint Mortg. Funding, Inc., 2010 WL 1729711 (E.D. Cal. Apr. 28, 2010).

The correspondence must include, or enable the servicer to be able to identify, the name and account of the borrower, as well as a statement of the reasons why the borrower believes that the account is in error or a detailed description of the information the borrower is seeking. 12 U.SC. § 2605[e][1][B]. Any written document (such as a typed letter or a handwritten note) will suffice as a QWR, although the request may not be written on the payment coupon or other payment media supplied by the servicer. 12 U.SC. § 2605[e][1][B]. The correspondence does not need to be signed by the borrower. Moon v GMAC Mortg. Corp., 2009 WL 3185596 (W.D. Wash. Oct. 2, 2009). To be considered a QWR, the letter must be sent to the loan servicer, not to any other party related to the loan, and should identify itself as a “qualified written request under Section 6 of RESPA.” A sample QWR is available on the website of the Department of Housing and Urban Development.

Servicer Actions Required

Once the servicer receives a QWR, the servicer must acknowledge receipt of the correspondence within five days (excluding Saturdays, Sundays, and legal holidays), unless the action requested is taken within that timeframe. 12 U.SC. § 2605[e][1][A].

Within 30 days (excluding Saturdays, Sundays, and legal holidays), the servicer must:

  • correct the account, including crediting any late charges or penalties, as well as transmit a written notification of the correction to the borrower and provide the name and telephone number of a representative of the servicer who can provide further assistance to the borrower
  • after investigating the matter, provide the borrower with a written explanation or clarification that includes a statement of the reasons why the servicer believes the account is correct and the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the borrower; or
  • after investigating the matter, provide the borrower with a written explanation or clarification that includes the information requested by the borrower or an explanation of why the information that was requested is unavailable or cannot be obtained and the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the borrower. 12 U.SC. § 2605[e][2].

The 30-day period may be extended by an additional 15 days (excluding Saturdays, Sundays, and legal holidays) if the servicer notifies the borrower of the extension and the reasons for the extension in writing before the end of 30 days. 12 U.SC. § 2605[e][4].

Damages for RESPA Violations

If the servicer fails to take one of the required actions within the time limit, under RESPA a borrower may recover:

  • any actual damages suffered by the borrower
  • if there is a pattern or practice of servicer noncompliance, additional damages not to exceed $2,000, and
  • attorneys’ fees and costs. 12 U.S.C. §§ 2605[f][1], 2605[f][3].

The statute of limitations for violations is three years. 12 U.S.C. § 2614.

RESPA does not prohibit the lender from initiating or moving forward with a foreclosure. Even while a QWR is pending, the servicer may still pursue any of its available remedies, including foreclosure, if the borrower has defaulted on the mortgage loan. 24 C.F.R. § 3500.21[e][4][ii].

A QWR can be a powerful tool for a borrower facing foreclosure, because it forces the servicer to provide information about the account to the borrower. This is especially important in nonjudicial foreclosures states, where the foreclosure process is not overseen by a court that can order the servicer to produce information about the account for the borrower's review.

For More Information

The Real Estate Settlement Procedures Act is found at 12 U.S.C. § 2601, et seq., and is implemented by Regulation Z, which is found at 24 C.F.R. § 3500. As of July 21, 2011, RESPA is administered and enforced by the Consumer Financial Protection Bureau (CFPB). You may contact the CFPB at 855-411-2372 (855-729-2372 TTY/TDD) if you have a complaint about your mortgage servicer, or go to http://www.consumerfinance.gov/ for more information.

Talk to a Lawyer

Need a lawyer? Start here.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you
NOLODRUPAL-web3:DRU1.6.12.2.20161011.41205