Source: https://consumerfinancialserviceslaw.us/recent-changes-to-the-law-governing-qualified-written-requests/
Timestamp: 2018-11-21 16:17:13
Document Index: 104003423

Matched Legal Cases: ['art 1024', '§ 1024', '§ 2605', '§ 2605', '§ 2605', '§ 2605', '§ 2605', '§ 2605']

Recent Changes to the Law Governing Qualified Written Requests | Consumer Financial Services Legal Update
by Kaleb McNeely · July 30, 2015
Homeowners who are contemplating or actively engaged in litigation regarding a residential mortgage loan are increasingly taking advantage of a provision of the Real Estate Settlement Procedures Act (“RESPA”) whereby a borrower may request information relating to the servicing of a loan. Such a request for information is termed a Qualified Written Request, or “QWR,” and may impose on loan servicers a duty to respond to borrowers’ inquiries. Financial institutions and others involved in the servicing of residential mortgage loans need to be aware of the duties that can be triggered by receipt of a QWR, particularly in light of recent changes to the statutory response times applicable to QWRs.
What is a QWR and to Whom Does It Apply?
The Consumer Financial Protection Bureau (“CFPB”) has noted, in its Official Interpretations of this provision, that a QWR “is not required to include both types of requests. For example, a qualified written request may request information relating to the servicing of a mortgage loan but not assert that an error relating to the servicing of a loan has occurred.” See 12 C.F.R. Part 1024, Supp. I, § 1024.31.
Courts have held that “RESPA does not require any magic language before a servicer must construe a written communication from a borrower as a qualified written request and respond accordingly.” Catalan v. GMAC Mortg. Corp., 629 F.3d 676, 687 (7th Cir. 2011). Thus, “[a]ny reasonably stated written request for account information can be a qualified written request.” Id. At the same time, “the statutory duty to respond does not arise with respect to all inquiries or complaints from borrowers to servicers.” Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 666 (9th Cir. 2012), cert. den. 133 S.Ct. 2800 (2013). In particular, a QWR must relate to servicing and, thus, a borrower’s request for loan origination information or documents does not qualify as a QWR. See id. at 666-67.
What Actions Are Required upon Receipt of a QWR?
Upon receipt of a QWR, a mortgage servicer is required to take certain steps, each of which is subject to certain deadlines.
Second, within 30 days of receipt of the QWR (with a possible 15-day extension), the servicer must provide a substantive response, the nature of which depends on the type of QWR. Upon receipt of a “notice of error” (i.e., a QWR in which the borrower “asserts an error relating to the servicing of a mortgage loan,” see 12 CFR 1024.35), the servicer must: (1) “make appropriate corrections in the account of the borrower, including the crediting of any late charges or penalties, and transmit to the borrower a written notification of such correction”; or (2) “after conducting an investigation, provide the borrower with a written explanation or clarification” that includes (i) a statement of the reasons the servicer believes the account is correct and (ii) the contact information of a servicer employee or office that can provide assistance to the borrower. See 12 U.S.C. § 2605(e)(2).
Where the servicer receives a “request for information” QWR (see 12 CFR 1024.36), the servicer must provide: (1) the “information requested by the borrower or an explanation of why the information requested is unavailable;” and (2) the contact information of a servicer employee or office that can provide assistance to the borrower. See 12 U.S.C. § 2605(e)(2)(C). While the 30-day deadline for responding to a QWR applies to most borrower inquires, it is important to bear in mind that certain types of “notices of error” and “requests for information” (such as a request for the identity of the owner of the loan under 12 U.S.C. § 2605(k)(1)) may trigger separate deadlines and/or substantive obligations. See 12 U.S.C. § 2605(k)(1); 12 CFR 1024.36(d)(2); 12 CFR 1024.35(e)(3).
Third, during the 60-day period beginning on the date of receipt of a QWR, “a servicer may not provide information regarding any overdue payment, owed by such borrower and relating to such period or qualified written request, to any consumer reporting agency.” See 12 U.S.C. § 2605(e)(3).
First, it is recommended that servicers establish an address to which QWRs must be sent, as permitted by RESPA’s implementing regulation, Regulation X. That address must be communicated to the borrower, included in any communication in which the servicer provides the borrower with contact information for assistance from the servicer, and included on any website maintained by the servicer if the website lists any contact address for the servicer. 12 CFR 1024.35(c). Where a servicer has established such a QWR contact address, borrower requests sent to other addresses are not proper QWRs. See Roth v. CitiMortgage Inc., 2014 WL 2853549 (2nd Cir. June 24, 2014) (dismissing borrower’s RESPA claim where purported QWRs were not sent to servicer’s designated QWR address). In addition to designating a QWR address, mortgage services are advised to establish a method of determining the date of receipt of a QWR (which triggers the applicable response deadlines) and a mechanism for alerting the appropriate department of receipt of a QWR.
Second, mortgage servicers should set up a procedure to stop reporting the borrower to consumer credit agencies upon receipt of a QWR in order to minimize the risk of being deemed in violation of 12 U.S.C. § 2605(e)(3), as discussed above.
Third, mortgage services are advised to establish a system for identifying the deadlines to respond to a QWR and tracking the progress of preparing and submitting such responses. This is particularly important in light of the recent tightening of the timeframe for QWR responses, whereby a servicer has only 5 days to acknowledge receipt of a QWR and 30 days or less to provide a substantive response or seek an extension.
Finally, mortgage servicers should establish procedures for reviewing QWRs, investigating any allegations of account error, and compiling any documents requested by the QWR. If the account at issue is in error, servicers will need to correct such errors and advise the borrower of any corrections that were made. If the account is determined to be without error, servicers will need to communicate this to the QWR sender, and send any documents requested by the QWR and within the scope of a QWR. Although borrower requests for the identity of the owner or assignee of their loans are proper under TILA 1641(f)(2), most courts have found that information regarding loan origination is not properly within the scope of a QWR and servicers do not have a duty to provide such information to borrowers. See, e.g., O’Connor v. Nantucket Bank, 992 F.Supp.2d 24, 36-37 (D. Mass. 2014); Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 666-67 (9th Cir. 2012); Ward v. Security Atlantic Mortg. Elec. Reg. Sys., Inc., 858 F.Supp.2d 561 (E.D.N.C. 2012); MorEquity, Inc. v. Naeem, 118 F.Supp.2d 885 (N.D.Ill. 2000).
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