Source: https://fightforeclosure.net/2014/06/11/how-homeowners-can-effectively-use-respa-in-their-foreclosure-defense/
Timestamp: 2019-04-18 13:38:32+00:00

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It is important for every homeowner to use the RESPA provisions in their foreclosure defense.
Most Homeowners often wonder what is RESPA. This post is designed to enlighten homeowners as to what RESPA is and how the provisions of RESPA can help them in the foreclosure fight.
1. RESPA initially applied to loans subject to a first lien on residential property of one to four units. In 1992, it was amended to apply to subordinate loans on such property as well. The implementing regulations are contained in Regulation X, 24 C.F.R. § 3500, as well as in Regulation Z, 12 C.F.R. § 226.19.
2. RESPA requires good faith estimates of Truth In Lending Act disclosures before consummation or within three business days after the creditor receives the consumer’s written application, whichever occurs earlier. Re-disclosure is required no later than consummation or settlement. According to § 226.19(b), when dealing with variable-rate loans a booklet on adjustable rate mortgages must be provided along with other detailed disclosures specified in the regulations.
3. RESPA prohibits mortgage transaction servicers from giving and creditors from accepting “any portion, split or percentage” of any charge made or received for settlement services “other than for services actually performed. 12 U.S.C. § 2607(b). High and unearned fees that are not actionable under RESPA, are still subject to challenge as unconscionable and that it is an unfair and deceptive practice to represent a charge as for a specific purpose, when the actual cost of that item is much less.
4. RESPA also requires servicers of covered mortgages to respond to written requests from the borrower or the borrower’s agent for information or disputes concerning the servicing of the loan, and to either make appropriate corrections or, after investigation, explain why the account is correct. Failure to comply with the response requirements gives rise to liability for actual damages, statutory damages up to $1000 in case of a pattern or practice of noncompliance and attorneys’ fees and costs, with special class action provisions.
exclusively with escrow accounts and limits the amount servicers can demand to be deposited in an escrow account and requires an escrow analysis be conducted to determine the proper escrow payment. § 2609(a); It also requires servicers to provide an annual escrow statement § 2609(c) and a notice of escrow shortages or deficiencies.
6. There is one requirement imposed by § 2605 that does not apply if the borrower is behind on payments. Section 2505(g) requires a servicer to make payments from an escrow account for taxes, insurance and other charges “in a timely manner as such payments become due.” As long as the borrower’s mortgage payment is not more than thirty days late, the servicer must pay escrow items such as taxes and insurance in a timely manner even if there are not sufficient funds in the escrow account to cover the items. Reg. X, 24 C.F.R. § 3500.17(k)(2). RESPA creates an express right of action for a servicer’s failure to make payments from an escrow account for taxes, insurance and other charges “in a timely manner as such payments become due.” 12 U.S.C. § 2605(g). Regulation X provides that this obligation to make timely disbursements out of escrow does not apply when the “borrower’s payment is more than 30 days overdue.” Reg. X, 24 C.F.R. § 3500.17(k)(1), (2) The regulation has no explanation of this limitation. It could be interpreted to mean that a servicer has no obligation to timely disburse payments for taxes and insurance or other charges whenever the home owner’s mortgage payment is more than thirty days late at the time the disbursement becomes due, even if there are sufficient funds in the escrow account to cover the disbursement.
action for disclosure violations, analyzing the disclosures often reveals Truth in Lending and HOEPA violations.
(Section 3, entitled “Funds for Escrow Items”), requires the servicer to maintain the escrow account in compliance with RESPA. A provision in the plan can require the servicer to comply with the RESPA escrow account requirements during the administration of the plan.
preempted only to the extent of their inconsistency with RESPA. 12 U.S.C. § 2616. State laws providing greater protections to borrowers than RESPA that are not inconsistent with RESPA are not preempted.
fees; Making charges for which no identifiable services are provided; Improper servicing of loan.
(a) Mortgagees shall provide loan information to mortgagors and arrange for individual loan consultation on request. The mortgagee must establish written procedures and controls to assure prompt responses to inquiries.
(c) Within thirty days after the end of each calendar year, the mortgagee shall furnish to the mortgagor a statement of the interest paid, and of the taxes disbursed from the escrow account during the preceding year. At the mortgagor’s request, the mortgagee shall furnish a statement of the escrow account sufficient to enable the mortgagor to reconcile the account.
(d) Mortgagees must respond to HUD requests for information concerning individual accounts.
(e) Each servicer of a mortgage shall deliver to the mortgagor a written notice of any assignment, sale, or transfer of the servicing of the mortgage. The notice must be sent in accordance with the provisions of § 3500.21(e)(1) of this title and shall contain the information required by § 3500.21(e)(2) of this title. Servicers must respond to mortgagor inquiries pertaining to the transfer of servicing in accordance with §3500.21(f) of this title.
result of the mortgagor’s error or omission. The mortgagee shall use the procedures set forth in § 3500.17 of this title, implementing Section 10 of the Real Estate Settlement Procedures Act (12 U.S.C. 2609), to compute the amount of the escrow, the methods of collection and accounting, and the payment of the bills for which the money has been escrowed.
In the case of escrow accounts created for purposes of § 203.52 or § 234.64 of this chapter, mortgagees may estimate escrow requirements based on the best information available as to probable payments that will be required to be made from the account on a periodic basis throughout the period during which the account is maintained.
The mortgagee shall not institute foreclosure when the only default of the mortgagor occupant is a present inability to pay a substantial escrow shortage, resulting from an adjustment pursuant to this section, in a lump sum.
When the contract of mortgage insurance is terminated voluntarily or because of prepayment in full, sums in the escrow account to pay the mortgage insurance premiums shall be remitted to HUD with a form approved by the Secretary for reporting the voluntary termination of prepayment. Upon prepayment in full sums held in escrow for taxes and hazard insurance shall be released to the mortgagor promptly.

References: § 3500
 § 226
 § 226
 § 2607
 § 2609
 § 2609
 § 2605
 § 3500
 § 2605
 § 3500
 § 2616
 § 3500
 § 3500
 §3500
 § 3500
 § 203
 § 234