Sunday, October 23, 2011

HOMEOWNERS CAN BENEFIT FROM BANK SERVICER VIOLATIONS OF QUALIFIED WRITTEN REQUESTS UNDER RESPA & TILA

There may be gold in the hands of distress homeowners if their bank servicers' fail to promptly comply with QWR and TILA requests.  Homeowners can sue their servicers in Small Claims Courts for violations of the Dodd-Frank Financial Reform Act.  Banks could end up paying $2,000 for RESPA time violations and $4,000 for TILA time violations.  As banks never respond adequately to QWRs, borrowers could sue for each violation -- and the money could add up  to as much as $6,000 per QWR.  Just imagine -- it could cost the banks plenty.  This could be the new version of "Make Banks Pay."

If you as a borrower are facing foreclosure, it is increasingly ciritical to determine who owns the mortgage and whether or not the entity taking action is in fact the actual creditor or actual owner of the Note secured by the mortgage or deed of trust.  Most of the time the actual owner is not the same entity as the mortgage servicer (the company that collects payments and sends out monthly statements.  To find out more about finding out who owns the mortgage note see "How to Find the Owner of the Mortgage Note" published on-line by the Law Office of Richard Shepherd.

Effect of Dodd-Frank Financial Reform Act, Public Law 111-203, Section 1463

Section 1463 of the Dodd-Frank Financial Reform Act reduces Qualified Written Request (QWR) deadlines and requires that the bank servicer acknowledge receipt of a QWR within 5 business days and must give a substantive response within 30 business days, with a possible 15 day extension of the servicer sends notice of the delay and its reason.
This law adds new 6 (k) to RESPA stipulating that the servicer "shall not fail to respond within 10 business days to a request by the borrower to provide the identity, address, and other relevant information about the owner or assignee of a home mortgage loan."

It further address the lack of a specific time deadline in TILA Section 1642(f)(2) by providing that it shall be a violation of TILA for a servicer to fail to identify the "owner or assignee" of a loan within 10 business days following a written request with respect to a loan secured by the borrower's principal dwelling.

TILA Section 1641(f)(2) applies only to loans secured by the borrower's Principal Dwelling.  RESPA's QWR rules apply too practically any loan secured by a one to four family residential structure, regardless of who occupies it. 

Penalties for Violations:  Violations of RESPA QWR rules make the servicer liable for statutory damages of $2,000 under the Dodd-Frank Reform Act in the even the Court finds a "pattern or practice" of non-compliance.  Violations of TILA Section 1641(f)(2) make the "creditor" liable for statutory damages up to $4,000, plus actual damages and attorney fees.

Effective Date:  All sections of Dodd-Frank were effective July 22, 2010 unless "otherwise provided" or regulations are necessary in order to implement such section.  See Dodd-Frank Section 1400.  Because no regulations appear to be required to implement the particular provisions mentioned above, there is a reasonable argument that these particular provisions became effective July 22, 2010 though most industry lawyers will probably disagree with this interpretation.

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Sample QWR Letter:

By Certified US Mail # (send certified to servicer, return receipt)

Servicer Name & Address (can be found on the back of your mortgage statement)

Dear Servicer:

RE:  Loan Number with Borrower's name and address of the property

This is a Qualified Written Request as defined by the Real Estate Settlement Procedures Act (“RESPA”) for information regarding the servicing of this mortgage loan.  This is also a request made pursuant to §1641(f)(2) of the Truth in Lending Act (“TILA”) for the name, address and telephone number of the owner of the mortgage Note the evidences this debt obligation.

Based on information I have received about this loan in monthly statements, I am uncertain as to who is the current owner of the mortgage Note.  Please resolve this uncertainty and dispute by providing me with the following information:

1.     1.   Please provide the complete name and address of the entity that currently owns the Note that is     secured by this mortgage loan. 
2.     2.   Please provide a copy of the front and back of all pages of that Note.  
3.     3.   Please provide copies of all Endorsements of that Note.
4.     4.   Please provide a copy of all Allonges to that Note.
5.     5.   Please provide a copy of all Assignments of the Deed of Trust securing this Note.

Sincerely,
Borrower

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6 comments:

  1. Make Banks Pay!!!!

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  2. http://www.sec.gov/about/laws/wallstreetreform-cpa.pdf

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  3. RESPA and TILA are federal laws, so where can you sue for failure to answer a QWR? Can you sue in small claims court?

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  4. Bank of America refused to answer some of the questions.

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  5. Make sure you ask for the loan balance and an accounting of all escrow transactions.

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  6. I received a Notice of Default notice from Green Tree Servicing who is the new servicing company for Bank of America Home Loans. I responded to the Notice of Default with a qualified written request letter on August 8, 2013. I received a letter from their attorney saying the were initiating a lawsuit to foreclose on September 21, 2013. I mailed the attorney and Green Tree stating that I sent my request to the servicing company on August 8th and am requesting the same information from them on October 8th. They both signed the certified mail receipt on 10/11/13. 60 days from this is on December 13, 2013. What do I do next?

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