The Real Estate Settlement Procedures Act (RESPA) was primarily designed to ensure that consumers in real estate transactions receive timely information about the costs of the settlement process, but it also imposes certain requirements on loan servicers.
Some of RESPA's requirements can be helpful to people facing foreclosure who believe their mortgage servicers have made mistakes in servicing their accounts. Specifically, RESPA sets forth requirements related to qualified written requests, which require mortgage servicers to correct errors or provide information to borrowers who ask for it.
Read on to learn more about RESPA, how to make a qualified written request, and how it can help you, especially if you’re facing a nonjudicial foreclosure.
(If you have fallen behind on your mortgage payments and are facing imminent foreclosure, visit our Foreclosure section for help.)
If you are facing foreclosure and are having a difficult time obtaining information about your account from your loan servicer, you can make a qualified written request. (A mortgage servicer is the company that collects monthly mortgage payments from borrowers on behalf of the owner of the loan. The servicer also tracks account balances, manages the escrow account, handles loss mitigation applications, and pursues foreclosure in the case of defaulted loans.)
A qualified written request is a letter written to the mortgage servicer to:
By making a qualified written request, a borrower can force the servicer to provide detailed information about the account.
Under amendments to Regulation X (which implements RESPA) that went into effect January 10, 2014, your inquiry may be categorized as: a “request for information” or a “notice of error.” These new categorizations expand on the previous qualified written request requirements. There are different time frames for the servicer to respond to you depending on the type of request you send.
Request for Information. The servicer must acknowledge a request for information within five business days, and respond within 30 business days.
Notice of error. Your servicer must acknowledge a written request that asserts a particular error (such as failing to properly apply payments or certain errors pertaining to loss mitigation) within five business days. it must correct the error, provide notice about the correction, and provide contact information for you to follow up (or let you know that no error occurred along with the reasons for this determination):
The 30-day time frame can be extended for an additional 15 days if the servicer notifies you within the 30-day period of the extension and gives you the reasons for the delay. (The servicer can’t get the extension if the notice of error pertains to a payoff statement request or certain errors pertaining to loss mitigation and foreclosure.)
The servicer does not have to comply with your error resolution or information request if the notice of error or request for information is essentially the same as one you previously sent or your request is overbroad, though it must notify you within five business days after making that determination and provide the basis for its determination.
Qualified written requests can be a particularly useful tool in a nonjudicial foreclosure, where the lender does not have to go through state court to foreclose. (Read more about How Nonjudicial Foreclosure Works.)
Since there is no judge in a nonjudicial foreclosure to order the servicer to produce information about the account for the borrower to review, a qualified written request may be a borrower’s best chance at obtaining information about the account.
(To learn more about this difference between judicial and nonjudicial foreclosures, visit Nolo's Judicial v. Nonjudicial Foreclosure page.)
(To find out if your state primarily uses a judicial or nonjudicial foreclosure process, check our Summary of State Foreclosure Laws.)
To make a qualified written request, you must send a letter to the servicer with the following information:
There is no specified format required for making a qualified written request, but the letter should:
It is recommended that you send the letter via certified mail, return receipt requested, so you will have confirmation that the servicer received the letter. You can find sample letters to send at www.consumerfinance.gov/askcfpb/1857/how-do-i-request-information-my-mortgage-servicer-about-my-mortgage-loan.html (follow the “sample letter” link) and www.consumerfinance.gov/askcfpb/1855/how-do-i-dispute-error-my-servicer-about-my-mortgage.html. (Again, follow the “sample letter” link.) You can send a request for information and a notice of error in the same letter or separately.
If the servicer fails to comply with the law, a borrower may recover:
The statute of limitations (the time period in which you must sue) for violations is three years (12 U.S.C. § 2614).
The lender or servicer may generally initiate or continue a foreclosure even if a qualified written request is outstanding, but not if you send a notice of error based on certain loss mitigation errors (such as an error based on the 120-day pre-foreclosure waiting period or dual-tracking restrictions). Then the issue must be resolved before the foreclosure sale can proceed – so long as the servicer receives the notice of error more than seven days before foreclosure sale.
There is no “trick” to making a qualified written request. If anyone offers to write the request for you and send it to your servicer for a fee, it is probably a scam since you can easily do it yourself. The Internet is full of sample qualified written request templates. A good one can be found on the U.S. Department of Housing and Urban Development’s website at www.hud.gov. Enter “Qualified Written Request” in the search box to find the sample.
RESPA is administered and enforced by the Consumer Financial Protection Bureau (CFPB). Go to www.consumerfinance.gov for more information.
If you are facing foreclosure and you think that the mortgage servicer has made errors in the servicing of your account, a qualified written request is just one way to deal with the matter. Any given foreclosure or legal situation has many potential claims and defenses. It is recommended that you seek the advice of local counsel or a legal aid organization to explore all possible avenues and defenses that may be available in your particular situation.
For more information on challenging a foreclosure in court, see our article Should You Fight Your Foreclosure in Court?