Consumer complaint received 2024-03-16
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Applying for a mortgage or refinancing an existing mortgage — Delays in the application process
Company: LoanCare, LLC (MD)

Dear LoanCare, As servicer of our mortgage loan, LoanCare shall treat this as both 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 XXXX v. Bank XXXX XXXX. XXXX, XXXX WF XXXX ( XXXX. XXXX XX/XX/XXXX ) ; XXXX XXXX Bank XXXX XXXX XXXX XXXX XXXX XXXX ( XXXX XXXX XX/XX/XXXX ) ( 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 ) ; XXXX XXXX XXXX XXXX XXXX XXXX XXXX, XXXX XXXX XXXX ( XXXX XXXX XXXX, XXXX XXXX ( same ) ; XXXX XXXX XXXX XXXX, XXXX XXXX XXXX ( XXXX Utah XX/XX/XXXX ) XXXX same ). 

We participated in mediation with LoanCare and its attorney, XXXX XXXX XXXX, wherein it was agreed by all parties that we would pay {$71000.00} as a downpayment to enter into a loan modification. We upheld our end of the deal by paying the {$71000.00} on XX/XX/XXXX. XXXX XXXX confirmed receipt of our payment and LoanCare issued to us a tax document reflecting the payment was received. Despite our multiple emails to XXXX XXXX, we have not yet received the final loan modification documents. XXXX XXXX and LoanCare both stated that we would receive the final loan modification documents within 30 days of our payment. It has now been close to 60 days without receipt of the loan modification documents. There is a pending foreclosure action that is to be dismissed once the loan is modified. We are fearful that LoanCare has reneged on its agreement to modify our loan despite our timely paying the down payment of {$71000.00}. 

In XX/XX/XXXX, the XXXX 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 XXXX be required pursuant to the terms of the mortgage servicing loan documents or contract. Id. LoanCare 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, we request LoanCare 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 XXXX 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 ) 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 LoanCare holds itself out as the servicer of my loan and that its activities with respect to the loan meet the definition of servicing. 
LoanCare 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 LoanCare part must be addressed and reconciled immediately, specifically, pursuant to Regulation X, 12 C.F.R. 1024.35 ( d ) and ( e ), LoanCare 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. LoanCare is a mortgage servicer subject to the mandatory requirements of 12 U.S.C.A. 2605 and 12 C.F.R. 1024.41. 

Sincerely, XXXX XXXX and XXXX XXXX XXXX : Consumer Financial Protection Bureau, XXXX XXXX XXXX