Consumer complaint received 2023-12-09
Product: Mortgage — FHA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — Loan estimate or other related disclosures
Company: CARRINGTON MORTGAGE SERVICES, LLC (MD)

Dear Carrington Mortgage Services , LLC . ( Carrington ) As servicer of the subject mortgage loan, Carrington shall treat this as a Notice of Error pursuant to the Real Estate Settlement Procedures Act ( RESPA ), subject to the response period set out in Regulation X, 12 C.F.R. 1024.35 ( b ) ( 1 ) - ( 11 ), and as a Request for Information pursuant to Sections 1024.35 and 1024.36 ( d ) ( 2 ) ( i ) ( B ). Please note the same written inquiry from a borrower or borrowers agent can both dispute a servicers action and seek information, and that therefore, a request for information and a notice of error can be contained in the same writings or sent as separate writings. See Amini v. Bank of Am. Corp., 2012 WF 398636 ( W.D. Wash. Feb 7, 2012 ) ; Luciw v. Bank of Am. , 2010 WL 3958715 ( N.D. Cal Oct 7, 2010 ) ( statute is drafted in the disjunctive so that request for account information alone, without statement that account is in error, is a valid qualified written request ) ; Goldman v. Aurora Loan Servs. , L.LC., 2010 WF 3842308 ( N.D. Ga. Sept, 2010 ) ( same ) ; Rodeback v. Utal Fin., 2010 WL 2757243 ( D. Utah July 13, 2010 ) ( same ). 

I am in receipt of the letter from Carrington dated XX/XX/XXXX, in response to my complaint to the CFPB. Carrington submitted a Note and Deed of Trust dated XX/XX/XXXX, claiming that as evidence that the loan is legitimate. The loan purports to be FHA insured. 

FHA requires that the servicer offer the borrower a Face to Face meeting prior to moving forward with any foreclosure proceedings. I did not receive such a letter. If Carrington claims such a letter was issued, then I request that letter be provided to me with proof of it being issued to me as required by FHA. 
Via a letter dated XX/XX/XXXX, Carrington issued to me copy of the 1003 claimed to be signed by me and used to originate this subject loan. The 1003 contains no income listed. The 1003 also reflects that I was to get {$6600.00} in cash back at the settlement. Carrington also provided a document that reflects Borrower Income Documentation as Stated Income. 

I never received any cash out from the refinance as reflected on the 1003. Please provide proof of the check that would have been issued to me via this refinance. I also require a copy of the final HUD1. 

I have reviewed FHA underwriting guidelines and FHA requires that income documentation be provided. I request an explanation as to how my loan was approved to be FHA insured when FHA prohibits stated income loans. I require a copy of the 1003 that was provided by XXXX XXXX XXXXXXXX to FHA. 

Carrington, you claim the current owner of my loan is XXXX XXXX, XXXX, however, I did not ever receive notice of this change in ownership. Regulation Z ( 15 U.S.C. 1641 ) 131 ( g ) of the Truth in Lending Act ( TILA ), which was enacted on XX/XX/XXXX, as Section 404 ( a ) of the Helping Families Save Their Homes Act. TILA Section 131 ( g ) became effective immediately upon enactment and established a new requirement for notifying consumers of the sale or transfer of their mortgage loans. The statute requires that a purchaser or assignee that acquires a loan to provide the disclosures in writing no later than 30 days after the date on which the loan was sold, transferred or assigned. I have never received any notice that anyone other than the originator of the subject loan was the owner of my loan. I require copies of all notices that were required to be provided to me pursuant to TILA. 

In XX/XX/XXXX, the Bureau issued several final rules to address the systemic problems in the mortgage servicing industry to implement protections for borrowers with regard to mortgage servicing. These new rules amended 12 C.F.R. Part 1024, RESPA ( Regulation X ), and became effective on XX/XX/XXXX. 

Notably, under RESPA, [ l ] oss mitigation option means any alternative to foreclosure offered by the owner or assignee of a mortgage loan that is made available through the servicer to the borrower. 12 C.F.R. 1024.31. This definition was intended to be expansive, encompassing not just loan modifications, but also forbearance plans, short sale agreements, and deed-in-lieu of foreclosure programs. Loss mitigation application means any oral or written request for a loss mitigation option that is accompanied by any information required by a servicer for evaluation for a loss mitigation option. Id. 

Under RESPA, [ s ] ervicer means a person responsible for servicing a federally related mortgage loan ( including the person who makes or holds such loan if such person also services the loan ). Id. Servicing means receiving any scheduled periodic payments from a borrower pursuant to the terms of any federally related mortgage loan, including amounts for escrow accounts... and making the payments to the owner of the loan or other third parties of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the terms of the mortgage servicing loan documents or contract. Id. Carrington is a servicer pursuant to RESPA. 

CFPB regulations effective XX/XX/XXXX, as well as RESPA itself, require servicers, through amendments made by the Dodd-Frank Act, to take timely action to correct errors relating to avoiding foreclosure, suggesting that borrowers should be able to assert under RESPA errors related to loss mitigation. See 12 U.S.C. 2605 ( k ) ( 1 ) ( C ). Thus, CFPBs new provisions are relevant to this this Notice of Error, and pursuant to these new provisions, I request Carrington process this Notice of Error as follows : The servicer must acknowledge receipt of a notice of error within five days ( excluding holidays, XXXX, and XXXX ) after receiving the notice, rather than the twenty business day period under the former law. See Reg. X, 12 C.F.R. 1024.35 ( d ) ( effective Jan. 10, 2014 ). 

Alternatively, the servicer need not provide this acknowledgment or otherwise satisfy the compliance requirements if it corrects the error or errors asserted by the borrower, and notifies the borrower in writing of the correction, within the five business day period. 

See Reg. X, 12 C.F.R. 1024.35 ( d ) - ( f ) ( effective Jan. 10, 2014 ) Carrington is required to respond to and correct the above noted errors as it is a standard servicer duty. Under 12 U.S.C. 2605 ( k ) ( 1 ) ( C ) a servicer shall not fail to take timely action to respond to a borrowers requests to correct errors relating to allocation of payments, final balances for purposes of paying off the loan, or avoiding foreclosure, or other standard servicers duties. 

These errors on Carringtons part must be addressed and reconciled immediately, specifically, pursuant to Regulation X, 12 C.F.R. 1024.35 ( d ) and ( e ), Carrington has 5 days within which to acknowledge receipt of this request and must respond no later than 7 days. 
Carrington is further advised that, under recently-amended Section 6 of RESPA, Carrington must acknowledge in writing its receipt of this XXXX  request within five ( 5 ) business days of receiving it ; to issue a substantive response to the requested information within thirty ( 30 ) business days ; and to reconcile existing irregularities or inconsistencies within a maximum of forty-five ( 45 ) business days ( The XXXX XXXX XXXX Reform and Consumer Protection Act allows for a 15-day extension only if I am informed about it and given the reasons for the extension ). 12 U.S.C. 2605 ( e ). A failure to comply with this request may result in fines of up to {$2000.00} plus any attorneys fees and costs. 12 U.S.C. 2605 ( f ). In addition, Section 2605 ( e ) ( 3 ) directs Carrington as the loan servicer to not report negative information regarding my account to a consumer reporting agency during the 60 days following receipt of the XXXX  concerning overdue payments related to that period or to the XXXX. 
Please ensure that all copies of the following documents that Carrington provides are clear, legible, and copied in their entirety. I will check off the following items I receive from you as you provide them : Copy of the HUD1 from settlement ; Copy of the check from any cash out I received at settlement.

Under RESPA, [ s ] ervicer means a person responsible for servicing a federally related mortgage loan ( including the person who makes or holds such loan if such person also services the loan ). 12 U.S.C. 2605 ( i ). Servicing means receiving any scheduled periodic payments from a borrower pursuant to the terms of any federally related mortgage loan, including amounts for escrow accounts... and making the payments to the owner of the loan or other third parties of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the terms of the mortgage servicing loan documents or contract. Id. Based on the representations made to me and the foregoing definitions, it is clear that Carrington holds itself out as the servicer of my loan and that its activities with respect to the loan meet the definition of servicing.

Carrington is required to respond and correct the above noted errors as it is a standard servicer duty. Under 12 U.S.C. 2605 ( k ) ( 1 ) ( C ) a servicer shall not fail to take timely action to respond to a borrowers requests to correct errors relating to allocation of payments, final balances for purposes of paying off the loan, or avoiding foreclosure, or other standard servicers duties.

These errors on Carrington part must be addressed and reconciled immediately, specifically, pursuant to Regulation X, 12 C.F.R. 1024.35 ( d ) and ( e ), Carrington has 5 days within which to acknowledge receipt of this request and must respond no later than 7 days.

Be advised that RESPA and Regulation X provide a private right of action if a servicer fails to comply with the statute or regulation. 12 U.S.C. 2605 ( f ) ; 12 C.F.R. 1024.41 ( a ). I am a borrower entitled to the protections codified at 12 U.S.C.A. 2605 and 12 C.F.R. 1024.41. The mortgage loan subject to this action is a federally related mortgage as defined in 12 C.F.R.1024.2 and involves a consumer transaction at the time the loan was taken out by me. Carrington is a mortgage servicer subject to the mandatory requirements of 12 U.S.C.A. 2605 and 12 C.F.R. 1024.41.

In conclusion, I trust Carrington will comply with the CFPB, TILA and RESPA requirements as Ive requested herein by correcting the errors noted, providing me with the name of the purported owner of my loan with evidence to support that claim and to cancel the schedule sale as we are under bankruptcy protection.