It Is Your Legal Right To Know Everything About Your Home Loan
By: Lance T. Denha, Esq.
For those who have been inquiring about Foreclosure defense, one of the effective tools recently used by Borrowers in an effort to gain a better understanding of the loans they previously signed and executed, has been to prepare and submit a Qualified Written Request (“QWR”). A QWR is a contract right found in every mortgage, which provides that the borrower has the right under the Real Estate Settlement Procedures Act (“RESPA”) and the related implementing regulation, to request information from the servicer. This language is found in the four corners of a mortgage and does not state any limitations on what information can be sought via a RESPA QWR.
In a typical scenario, a bank will receive a letter from a mortgage borrower, or his/her attorney or other agent acting on behalf of that borrower. The letter will generally demand that the lender provide the inquirer with a wide-ranging amount of information concerning the borrower’s loan and the transaction in general. The communication may assert that there is a defect or mistake in the borrower’s account, and then demand that immediate action be taken to correct that mistake.
The letters often assert the existence of predatory lending and/or fraudulent activities that have hurt or negatively affected the borrower. The letters may make detailed demands for enormous amounts of information relating to all aspects of the loan’s origination and processing.
The relevance of the RESPA provisions set forth above is that, unlike other inquiries from consumers, the duties that arise from inquiries that qualify as a QWR have potent legal consequences. RESPA damages have increased from $1,000 to $2,000 for violations involving a pattern and practice of non-compliance. Furthermore, now under Dodd-Frank Wall Street Reform (“Dodd-Frank”), servicers are required to respond faster to a QWR by acknowledging same within 5 days, rather than 20, and responding within 30 days instead of 60 days. The new shorter 30 day period can be extended for up to 15 days, but only if the servicer notifies the borrower within a certain period of time and provides a reason for the delay. Dodd-Frank also bans fees for responding to a valid QWR.
Even further, in the Helping Families Save Their Homes Act, Congress amended a portion of the Truth In Lending Act (“TILA”) to include a new provision, Section 131(g), that requires the assignee of a mortgage loan to notify a consumer borrower that his loan has been transferred. In fact, the new owner or assignee of a mortgage loan must notify the borrower in writing within 30 days after his mortgage loan is sold or otherwise transferred. This is extremely helpful for borrowers because failure of the lender to notify a borrower of a transfer of their loan will result in penalties borrowers may recover from lender for a TILA violation in connection with a loan in the amount of $4,000.
Borrowers and consumers deserve the best possible care and attention from their lending institutions. Such attention includes speedy and thorough answers to all inquiries involving their loan accounts.