Opinion ID: 182516
Heading Depth: 2
Heading Rank: 1

Heading: RESPA’s “Safe Harbor”

Text: Although RESPA provides a private right of action for violations of its requirements, it also includes a nonliability or “safe harbor” provision, which provides: A transferor or transferee servicer shall not be liable under this subsection for any failure to comply with any requirement under this section if, within 60 days after discovering an error (whether pursuant to a final written examination report or the servicer’s own procedures) and before the commencement of an action under this subsection and the receipt of written notice of the error from the borrower, the servicer notifies the person concerned of the error and makes whatever adjustments are necessary in the appropriate account to ensure that the person will not be required to pay an amount in excess of any amount that the person otherwise would have paid. 12 U.S.C. § 2605(f)(4). GMAC Mortgage is not entitled to the protection of the safe harbor in section 2605(f)(4). Although the parties have debated other requirements in the safe harbor provision, GMAC Mortgage did not argue, and nothing in the record shows, that GMAC Mortgage No. 09-2182 15 “notif[ied] the person concerned of the error,” as required to invoke the protection. On this basis alone, GMAC Mortgage was not eligible for protection in the RESPA safe harbor. The district court’s finding otherwise was error. In the district court, GMAC Mortgage argued that it was protected by the safe harbor because, when all was said and done, the plaintiffs did not pay any money in excess of what they otherwise would have paid, and GMAC Mortgage corrected all errors in the plaintiffs’ account within 60 days after receiving the plaintiffs’ December 17, 2004 letter, and before the plaintiffs filed suit. Under this view of the statute, the defendant must have corrected the error only before plaintiffs filed suit, even if the defendant did not discover and correct the error before receiving written notice of it from the borrower. Plaintiffs contend that the safe harbor provision requires the defendant to have corrected the error both before suit was filed and before the defendant received written notice of the error from the borrower. Because GMAC Mortgage’s failure to provide notice keeps it out of the safe harbor in this case, we express no view on the district court’s reasoning on this point.