Introduction
Homeowners who are contemplating or actively engaged in litigation regarding a residential mortgage loan are increasingly taking advantage of a provision of the Real Estate Settlement Procedures Act (“RESPA”) whereby a borrower may request information relating to the servicing of a loan. Such a request for information is termed a Qualified Written Request, or “QWR,” and may impose on loan servicers a duty to respond to borrowers’ inquiries. Financial institutions and others involved in the servicing of residential mortgage loans need to be aware of the duties that can be triggered by receipt of a QWR, particularly in light of recent changes to the statutory response times applicable to QWRs.
What is a QWR and to Whom Does It Apply?
A QWR is defined in RESPA, 12 U.S.C. § 2605(e)(1)(B), 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 borrower; and (ii) includes a statement of the reasons for the belief of the borrower, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.
The Consumer Financial Protection Bureau (“CFPB”) has noted, in its Official Interpretations of this provision, that a QWR “is not required to include both types of requests. For example, a qualified written request may request information relating to the servicing of a mortgage loan but not assert that an error relating to the servicing of a loan has occurred.” See 12 C.F.R. Part 1024, Supp. I, § 1024.31.
Courts have held that “RESPA does not require any magic language before a servicer must construe a written communication from a borrower as a qualified written request and respond accordingly.” Catalan v. GMAC Mortg. Corp., 629 F.3d 676, 687 (7th Cir. 2011). Thus, “[a]ny reasonably stated written request for account information can be a qualified written request.” Id. At the same time, “the statutory duty to respond does not arise with respect to all inquiries or complaints from borrowers to servicers.” Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 666 (9th Cir. 2012), cert. den. 133 S.Ct. 2800 (2013). In particular, a QWR must relate to servicing and, thus, a borrower’s request for loan origination information or documents does not qualify as a QWR. See id. at 666-67.
In addition, the duty to respond to a QWR applies only to a “servicer of a federally related mortgage loan.” See 12 U.S.C. § 2605(e)(1)(A). For purposes of RESPA, a servicer is defined as the person responsible for “receiving any scheduled periodic payments from a borrower pursuant to the terms of any loan . . . and making the payments of principal and interest . . .” 12 U.S.C. § 2605(i)(2)-(3). A “federally related mortgage loan” is generally defined, subject to certain exceptions, as a non-temporary loan, secured by a lien on residential real property, where the lender is regulated by the federal government or the lender’s deposit accounts are insured by a federal agency. See 12 C.F.R. 1024.2(b).
What Actions Are Required upon Receipt of a QWR?
Upon receipt of a QWR, a mortgage servicer is required to take certain steps, each of which is subject to certain deadlines.
First, the servicer must “provide a written response acknowledging receipt of the correspondence within 5 days (excluding legal public holidays, Saturdays, and Sundays) unless the action requested is taken within such period.” See 12 U.S.C. § 2605(e)(1)(A).
Second, within 30 days of receipt of the QWR (with a possible 15-day extension), the servicer must provide a substantive response, the nature of which depends on the type of QWR. Upon receipt of a “notice of error” (i.e., a QWR in which the borrower “asserts an error relating to the servicing of a mortgage loan,” see 12 CFR 1024.35), the servicer must: (1) “make appropriate corrections in the account of the borrower, including the crediting of any late charges or penalties, and transmit to the borrower a written notification of such correction”; or (2) “after conducting an investigation, provide the borrower with a written explanation or clarification” that includes (i) a statement of the reasons the servicer believes the account is correct and (ii) the contact information of a servicer employee or office that can provide assistance to the borrower. See 12 U.S.C. § 2605(e)(2).
Where the servicer receives a “request for information” QWR (see 12 CFR 1024.36), the servicer must provide: (1) the “information requested by the borrower or an...
