A few years ago, the Consumer Financial Protection Bureau (“CFPB”) enacted regulations (“Regulation X”) designed to provide fairness and transparency in mortgage servicing. Many of these regulations, if violated, are privately enforceable through the Real Estate Settlement Procedures Act (“RESPA”). In the course of my representing clients who have been subjected to CFPB violations, I have been successful recovering damages for these violations. Some typical violations include: failure to make timely payments out of the borrower’s escrow account; failure to a provide the borrower with a transfer of servicing statement and 60-day payment safe harbor; failure to timely and adequately respond to a borrower’s “Notice of Error” or “Request for Information” (otherwise known as “Qualified Written Requests”); failure to respond to a borrower’s request for the identity of the mortgage owner; failure to comply with early intervention requirements when the borrower falls behind on their mortgage payments, failure to comply with “loss mitigation” procedures, including procedures related to a possible “loan modification”; “dual tracking”; and, obtaining and charging the borrower for force-placed insurance on the property without a reasonable basis for doing so.
Clients facing foreclosure may gain significant financial negotiation leverage by bringing a court action to enforce their rights as compared to not bringing such action. Even if you have already lost your home to foreclosure, you may still have an enforceable claim and be entitled to compensation if the mortgage company violated certain regulations when dealing with you.
In addition to Regulation X as enforced through RESPA, other federal statutes such as the Fair Debt Collection Practices Act (“FDCPA”), the Truth in Lending Act (“TILA”) and the Telephone Consumer Protection Act (“TCPA”), if violated, may add further value to a client’s potential claim. Some of these case may even be appropriate to proceed as a class action lawsuit.
The following is a just a partial list of mortgage loan servicing companies which have been sued for consumer violations:
Aurora Financial Group
Bank of America
Bayview Loan Servicing
Carrington Mortgage Services
Ocwen Loan Servicing
PennyMac Loan Services
PHH Mortgage Corporation
Saxon Mortgage Services
Select Portfolio Servicing
Wells Fargo Home Mortgage
With the array of potential legal remedies available, it is possible that, in some cases, homeowners whose rights have been violated can not only save their home, but they can also come out ahead. Also, since the RESPA, TILA and FDCPA have provisions for the payment of attorney’s fees, in many cases a homeowner can have a lawyer pursue their claims without paying anything.