A federal law—the Real Estate Settlement Procedures Act (RESPA)—requires mortgage lenders, loan servicers, and brokers to give borrowers certain disclosures regarding the nature and costs related to buying real estate. RESPA also requires servicers to provide borrowers with information about their loan and to correct errors if a borrower makes a qualified written request. If the servicer doesn't comply with your request, you can sue and recover money damages.
Making a qualified written request can also be very useful if you're facing a foreclosure.
A qualified written request, or QWR, is a written letter sent to the servicer that:
To qualify as a QWR, the letter must enable the servicer to be able to identify the borrower's loan account, as well as include 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.
Any written document, like a letter or a handwritten note, counts as a QWR—but not if you write it on the payment coupon or other payment form that the servicer supplied. (12 C.F.R. §§ 1024.36, 1024.35).
Under RESPA, the servicer has to respond to your QWR within specific time limits.
Once the servicer receives a QWR, it has to acknowledge receipt within five days (excluding Saturdays, Sundays, and legal holidays).
After receiving your letter, the servicer must give you the information or fix the mistake by a particular deadline, and give you contact information so that you can get further help.
When it comes to requests for information, in most cases, the servicer has to provide you with the information you requested within 30 business days—or tell you why the information you want isn't available—as well as give you contact information, including a telephone number, so you can get further help. The servicer can get another 15 business days to respond if it informs you about the extension within the 30 days and explains the delay. (If you asked for the identity, address, or other contact information for the owner of your mortgage loan, however, the servicer has to give you that information within ten business days.)
The amount of time a servicer gets to respond to a notice of error depends on what kind of error it made. If the servicer didn't give you an accurate payoff statement after you asked for one, the servicer must respond no later than seven business days after getting your letter. If the servicer shouldn't have started a foreclosure—or wrongfully moved for a foreclosure judgment or order of sale, or conducted a foreclosure sale, in violation of federal law—the servicer has to respond before the earlier of the foreclosure sale or within 30 business days after getting your letter. If the servicer made some other error, like misapplying payments or overcharging fees, it has to respond within 30 business days after getting your letter. Though, in most cases, it can extend the response period by 15 business days if it tells you about the extension within the 30-day period and provides a reason for the delay.
In some situations, RESPA lets the servicer off the hook. The servicer doesn't have to help you if, for example:
Even in these situations, the servicer must tell you within five business days that it isn't going to help you and let you know why.
If the servicer fails to comply with RESPA's requirements, a borrower may recover any actual damages, additional damages not to exceed $2,000 (if a pattern or practice of servicer noncompliance exists), 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).
A QWR can be a powerful tool for a borrower facing foreclosure because it can force the servicer to provide information about the account. QWRs are particularly useful in nonjudicial foreclosures because a court doesn't oversee the process.
In a judicial foreclosure, the court may order the servicer to produce information about the account for the borrower's review. But in a nonjudicial foreclosure, because a court isn't involved in the process, submitting a QWR is a good way for you to get information about your account—like by requesting a payment history or communication logs—from the servicer. This information can help you decide if you want to file your own lawsuit to fight the nonjudicial foreclosure.
If you're facing a foreclosure and you think it's because the servicer made an error, contact a foreclosure lawyer immediately to get advice about your situation. Sending a QWR to the servicer probably won't stop the foreclosure from going forward. The lender or servicer may generally initiate or continue a foreclosure even if a qualified written request is outstanding, except under limited circumstances, like if you assert specific loss mitigation mistakes, like the servicer wrongfully started the foreclosure during 120-day preforeclosure period or dual-tracked. In these situations, the servicer has to resolve the matter before proceeding with a foreclosure sale—so long as it receives your notice of error more than seven days before a foreclosure sale.
If you aren't in foreclosure yet and the servicer won't respond to your notice of error or request for information (or if the servicer says it didn't make a mistake or won't give you the information you asked for), consider talking to a lawyer who can advise you about next steps.