Real Estate Settlement Procedures Act (RESPA)

Do you suspect your rights as a homeowner have been violated? Get in touch with the knowledgeable OC real estate lawyers at McFarlin LLP for immediate legal assistance. You may be entitled to recover damages that have resulted from the wrongful actions of the lender, servicer and/or broker. To learn more about your rights and legal options, call us today at (888) 728-0044.

What Is RESPA in Real Estate?

In effect since July 21, 2011, the Real Estate Settlement Procedures Act (RESPA) is administered and enforced by the Consumer Financial Protection Bureau (CFPB). Under this statute, borrowers must receive certain vital information and services concerning the purchase of real estate. Lenders, services and brokers that fail to comply with their required duties may be subjected to paying any resultant damages.

What Is a Qualified Written Request?

Borrowers can request certain information pertaining to their mortgage loan (including status of a modification) or dispute an action committed by their mortgage servicer (such as charging unwarranted late charges or misapplying payments) by sending a qualified written request (QWR) to the servicer.

A QWR can be handwritten or typed as long as the media is appropriate (QWRs cannot be written on payment media). The borrower must make his/her name and account information along with the details of his/her request or concern clear to the servicer. The document must also identify itself as a “qualified written request under Section 6 of RESPA.” A signature is not necessary.

Response by the Loan Servicer

Upon receiving a QWR, the loan servicer must commit the following actions as is appropriate within 30 days (barring weekends and legal holidays):

  • Correct any errors, such as crediting unwarranted charges or penalties, and send a notification to the borrower that includes the contact information of a loan representative who can provide further assistance
  • If the alleged error is actually a legitimate action taken by the servicer, the borrower must receive a detailed explanation of the reasons why the action is valid along with the contact info of a loan representative who can provide further assistance
  • Provide the requested information to the borrower or, if the request is not valid, an explanation of why the requested information is not available, in addition to the contact info of a loan representative who can provide further assistance

If the servicer requires more time to formulate a response, they may request a 15 day extension as long as the borrower is notified of the extension before the end of the initial 30 day period.

RESPA Violations Penalties

If a servicer violates a borrower’s rights as established by RESPA, they may be required to provide coverage for the following damages:

  • Actual damages suffered by the borrower as a result of the servicer’s actions;
  • Additional damages of up to $2,000 if the servicer has a history of noncompliance; and
  • Attorney fees and other legal expenses.

The statute of limitations for RESPA violations is three years, according to 12 U.S.C. § 2614.

Preserving Your Rights as a Homeowner

At McFarlin LLP, we are thoroughly familiar with the tactics used by shady lenders to profit off of unsuspecting and struggling homeowners. We can protect you against them so you don’t become a victim. Submit an online contact form or call our offices for trusted legal counsel.