What is a Qualified Written Request and How Can It Help You?
There is a lot of talk about sending a “qualified written request” (QWR for short) to your bank about your mortgage. People (many of them on the Internet) claim that a QWR is a magic bullet that will stop foreclosure and bring your bank to its knees. Although this can be an overstatement, a QWR is still a valuable tool for obtaining information about your mortgage, bringing issues to your bank’s attention, and potentially entitling you to relief if they don’t respond—especially because of recent amendments to the Real Estate Settlement Practices Act under the Dodd–Frank Act.
What is a QWR? First, what is a qualified written request? It’s simple. It must be: (1) in writing, (2) include your name and account number, and (3) either (i) provide a statement of the reason your account is in error, or (ii) request other information about your account.
What can you request? There has been disagreement about what you can request— banks’ lawyers often argue that people can only dispute billing errors, while homeowners often want information about how to stop foreclosure, who owns their mortgage, and so on. This has been clarified by the recent amendments under the Dodd-Frank Act, which requires a mortgage servicer to take timely action to respond to a borrower’s request for information related to “allocation of payments, final balances for purposes of paying off the loan, or avoiding foreclosures, or other standard servicer duties.” Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376, tit. XIV, § 1463(a) (2010). Thus, it is clear that homeowners can ask for information about how to avoid foreclosure.
Where do you send a qualified written request? Banks can designate a specific address to which you must send a QWR. Be careful: this is almost never the address for payments. You may be able to find this address in one of a few places. When you get the loan, it has to be provided to you. And if your loan has been transferred to a new servicer since the origination (and it probably has), then the new servicer was required to give you the QWR address in a note at the time of the transfer. Some banks put it on mortgage statements, although not all do. If you can’t find the servicing transfer notice, and if it’s not on your statement, you may need to call your bank to ask.
Can a QWR stop a foreclosure? A QWR does not necessarily stop a foreclosure. The regulations state that a QWR “does not impede a lender or servicer from pursuing any of its remedies, including initiating foreclosure . . . .” But, if you have a good reason to dispute the foreclosure, bringing the dispute to the bank’s attention may cause them to stop it.
How long does your bank have to respond? Before the Dodd-Frank Act, your bank had to acknowledge the request within 20 business days (about a month), and respond to it in writing within 60 business days (about three months). Now, however—although there is some disagreement about the effective date—those timelines have been significantly shortened, and the bank must acknowledge the request in 5 business days and respond to it in 30 business days.
What are the penalties for not responding to a QWR? This is one of the most important but least thought-about issues. You would be entitled to your “actual damages,” that is, the value of the harm you suffered because of the bank’s failure to fix the issue. If the bank did nothing wrong, then you may not have any actual damages, but if the bank misapplied payments or foreclosed on your home, your damages might be high. Additionally, if you can prove a “pattern or practice” of not responding, you may be entitled to up to $1,000 in statutory damages (or $2,000 in statutory damages for cases after the effective date under the Dodd-Frank Act). You would also be entitled to costs and attorney’s fees. Generally, there is a one-year statute of limitations on lawsuits related to QWRs.
Conclusion So what does a QWR do? It lets you request information and send disputes to your bank related to your loan, both with regard to preventing foreclosure and the administration of your account. But a QWR must be sent to a specific address, and it’s not always obvious which address this is. Although a QWR cannot automatically stop a foreclosure, it does provide you with rights, and remedies, for a bank’s violations of your rights.
Sample Qualified Written Request: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/ramh/res/reslettr
Official Page on RESPA: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/rmra/res/respa_hm