There is confusion abound as to what constitutes a “qualified” written request or “QWR” and how such QWRs may be useful for homeowners (or those representing them) in the foreclosure defense arena. Unfortunately, the internet has contributed in no small measure to this confusion with well meaning but nevertheless non-expert commentators distributing all manner of “samples” some of which arguably bare little resemblance to a true QWR as contemplated by statute.
What follows are some tips as and a quick overview of pertinent sections of RESPA[1] for the practitioner and homeowner:
1. What is a QWR?
The Statute defines QWRs very broadly as:
“…a written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, that (i) includes, or otherwise enables the servicer to identify, the name and account of the homeowner; and (ii) includes a statement of the reasons for the belief of the homeowner, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the homeowner.”[2]
The statute’s definition of a QWR is broad but that does not necessarily mean that a QWR can ask for everything under the sun. There is still some dispute about this, but in general, a QWR should be limited to requests for information reasonably related to servicing. In this author’s view, targeted itemized requests are much more effective (and likely more supportive of a claim for damages based on RESPA’s QWR provisions) than a broad “discovery type” set of questions.
2. What are a Servicer’s Obligations Upon Receiving a QWR
With rather surprising regularity, QWRs go unanswered by servicers. This should certainly not be the case as servicers have very clear obligations under RESPA in this regard. Upon receipt of a QWR, the Servicer must:
- Within 5 days (20 days pre-Dodd-Frank) (excluding weekends and legal holidays) –provide a written response acknowledging receipt of the QWR.[3]
- Within 10 business days – respond within to a request from a homeowner to provide the identity, address, and other relevant contact information about the owner or assignee of the loan.[4]
- Not later than 30 days (60 days pre-Dodd-Frank) (excluding weekends and legal public holidays) – if applicable, before taking any action with respect to the inquiry of the homeowner, the servicer must[5]:
- (A) make appropriate corrections in the account of the homeowner, including the crediting of any late charges or penalties, and transmit to the homeowner a written notification of such correction (which must include the name and telephone number of a representative of the servicer who can provide assistance to the homeowner);
- (B) after conducting an investigation, provide the homeowner with a written explanation or clarification that includes–
- (i) to the extent applicable, a statement of the reasons for which the servicer believes the account of the homeowner is correct as determined by the servicer; and
- (ii) the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the homeowner; or
- (C) after conducting an investigation, provide the homeowner with a written explanation or clarification that includes–
- (i) information requested by the homeowner or an explanation of why the information requested is unavailable or cannot be obtained by the servicer; and
- (ii) the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the homeowner.
It is important to note that under the regulations, a servicer may designate in a notice of transfer of servicing or in some other communication a separate address where qualified written requests must be sent.[6] It is therefore possible that a servicer may not be liable for not answering a QWR that was not sent to the correct address.
3. Consequences for RESPA Violations
There are rather severe consequences for RESPA violations by a servicer. Section 2605 (f) of RESPA states:
“DAMAGES AND COSTS.—Whoever fails to comply with any provision of this section shall be liable to the homeowner for each such failure in the following amounts:
(1) INDIVIDUALS.—In the case of any action by an individual, an amount equal to the sum of–
(A) any actual damages to the homeowner as a result of the failure; and
(B) any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not to exceed $2,000 ($1,000 pre Dodd-Frank).
(2) CLASS ACTIONS.—In the case of a class action, an amount equal to the sum of–
(A) any actual damages to each of the homeowners in the class as a result of the failure; and
(B) any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not greater than $2,000 for each member of the class, except that the total amount of damages under this subparagraph in any class action may not exceed the lesser of–
(i) $1,000,000 ($500,000 pre Dodd-Frank); or
(ii) 1 percent of the net worth of the servicer.”
In addition, RESPA Section 2605(f)(3) allows for the recovery of attorneys fees and costs in a successful action.
4. RESPA and Dodd-Frank
This article references RESPA provisions which include amendments to the law made by the Dodd-Frank Act. Note that implementing regulations for the Dodd-Frank amendments are scheduled to be finalized by the Consumer Financial Protection Bureau (CFPB) no later than January 21, 2013 with possible effective dates as late as January 21, 2014. For a comparison of pertinent RESPA sections before and after Dodd-Frank, see table 1 below.
Table 1: Comparison Between Current RESPA Provisions and Dodd-Frank RESPA Amendments
|
Current RESPA |
Dodd-Frank Amendments |
| Acknowledgment of QWR |
20 days |
5 days |
| Time to Respond to QWR |
60 days |
30 days (15 day extension possible) |
| Damages for Each Violation – Individuals |
Actual Damages plus up to $1,000 |
Actual Damages plus up to $2,000 |
| Damages for Each Violation – Class Actions |
The lesser of $500,000 or 1% of servicer net worth. |
The lesser of $1,000,000 or 1% of servicer net worth. |
[1] 12 U.S.C. 2601 et seq, full text of RESPA is available online at: http://www.fdic.gov/regulations/laws/rules/6500-2530.html . This article references RESPA provisions which include revisions to the law made by the Dodd-Frank Act. Note that implementing regulations are scheduled to be finalized by the Consumer Financial Protection Bureau (CFPB) no later than January 21, 2013 with possible effective dates as lat as January 21, 2014.
[3] RESPA Section 2605(e)(1)(A)
[4] RESPA Section 2605(k)(1(D)
[5] RESPA Section 2605(e)(2)(A)-(C). Note that per RESPA section 2605(e)(4)the servicer may extend this 30 day period by an additional 15 days if the servicer notifies the homeowner of the extension and the reasons for the delay in responding. Note also that per RESPA Section 2605(e)(3) upon receipt of a QWR, a servicer may not provide information regarding any overdue payment, owed by a homeowner, to any consumer reporting agency for 60 days.
[6] See 24CFR 3500.21(d)(3)(ii)
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