Recent Amendments to RESPA’s QWR Provisions
Section 1463 of the Dodd-Frank Financial Reform Act (the “Dodd-Frank Act”), which took effect in January 2014, contains several important modifications to the QWR provisions of RESPA. First, a servicer must now acknowledge receipt of a QWR within 5 business days (previously 20 days) and must provide a substantive response to the borrower within business 30 days (previously 60 days), with a possible 15-day extension if the servicer sends the borrower notice of the extension and its reason for the delay in responding. See 12 U.S.C. § 2605(e)(1)(A); 12 U.S.C. § 2605(e)(2); 12 U.S.C. § 2605(e)(4).
Second, the Dodd-Frank Act added Section (k)(1) to RESPA, which provides in part that a servicer shall not “fail to respond within 10 business days to a request from a borrower to provide the identity, address, and other relevant contact information about the owner or assignee of the loan.” 12 U.S.C. § 2605(k)(1). While this section contains similar requirements to Section 1641(f)(2) of the Truth in Lending Act (“TILA”), Section 1641(f)(2) does not contain a specific deadline. See 12 U.S.C. § 1641(f)(2). Although such inquiries are not technically QWRs, borrowers submitting QWRs frequently include requests for the identity of the owner or assignee of their loans, which are often styled as requests under TILA 1641(f)(2). As such, loan servicers need to be aware of the short 10 business day deadline to respond to such inquiries.
Finally, the Dodd-Frank Act increased the statutory damages available to a borrower for a violation of the RESPA QWR provisions. For individual borrowers, available statutory damages increased from $1,000 to $2,000, while in the case of a class action lawsuit, the maximum allowable amount of statutory damages doubled from $500,000 to $1 million. See 12 U.S.C. § 2605(f). In addition to statutory damages, borrowers may also seek to recover actual damages they allegedly have suffered as a result of a servicer’s failure to provide an adequate and timely response to a QWR. However, servicers potentially can mitigate liability pursuant to RESPA’s safe harbor provision, which provides that a “transferor or transferee servicer shall not be liable” for any violation of RESPA’s QWR provisions if, within 60 days of discovering an error and before the commencement of a QWR-based action and receipt of notice of error from the borrower, the servicer notifies the borrower of the error and makes appropriate adjustments. See 12 USC 2605(f)(4).