“Qualified Written Request” Claim Requires Homeowner Show Actual Damages; Foreclosure Notices Defici
First, the decision clarifies the law on what a mortgage servicer must do when responding to a homeowner’s “qualified written request” sent pursuant to the Real Estate Settlement Procedures Act (RESPA).
Under RESPA, a homeowner may send what is called a qualified written request (QWR) to their mortgage bank asking for information about, or stating a dispute about, the servicing of their loan. The bank must respond within 30 business days, under most circumstances.
In this case, the homeowner asked for information about his mortgage from when the loan had previously been within another bank. (Mortgages are frequently transferred from one bank to another over the life of the loan.) The servicer did not respond, and the homeowner filed a lawsuit.
The judge ruled that a bank must provide all account information, even if that information is from a previous bank. Since the responsibility for servicing the loan is transferred in full, the new bank “cannot stick its head in the sand” when information is requested about the history of the loan.
But, the judge ruled that the homeowner did not suffer any adverse effect from the failure to receive the requested information. As a result, there were no damages, and his RESPA claim for the deficient answer to the qualified written request was dismissed.
The lesson from this decision is that despite some fanfare about qualified written requests that homeowners may find on the Internet, they are not a magic bullet. A QWR must be tailored to show that the failure to provide the information requested will result in actual damages. A bank’s failure to provide an answer, with more, is not necessarily sufficient to bring it to the table.
The homeowner also brought claims against the bank for sending inaccurate pre-foreclosure notices. Prior to foreclosure, a bank must mail notices under two requirements, Massachusetts General Laws chapter 244, section 35A (called the Section 35A Notice), as well as under the terms of the loan itself (usually under Paragraph 22 of the mortgage).
The notices must contain the amount of money required to reinstate the loan. In this case, the homeowner alleged that the bank provided the wrong amounts.
The judge ruled in favor of the homeowner, holding that the foreclosure process essentially had to be restarted if the notices were inaccurate. Some courts have ruled the opposite, and held that the notices do not need to strictly comply with the foreclosure laws.
Homeowners should carefully scrutinize all notices sent from banks related to foreclosure. Massachusetts allows for non-judicial foreclosure, which means that there is no court oversight of the foreclosure process. To stop a foreclosure, a homeowner has to file a lawsuit and ask for a court to issue a restraining order. There are good grounds to do this if there are deficient foreclosure notices.
Although in many respects Massachusetts courts have made groundbreaking decisions about foreclosure law, the contours of the law are constantly evolving, as shown by this decision.
The decision is available here: Bulmer v. MidFirst Bank, FSA
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