RESPA Violations as a Defense
The Real Estate Settlement Procedures Act provides multiple foreclosure defenses — improper fees, failure to respond to QWRs, and servicing errors.
Overview
The Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601 et seq., and its implementing regulation, Regulation X (12 CFR Part 1024), impose extensive obligations on mortgage servicers. RESPA violations can be asserted as: (1) an affirmative defense to foreclosure (the servicer's illegal conduct precludes foreclosure), (2) a counterclaim for damages (actual damages, statutory damages, attorney fees), or (3) grounds for a TRO/injunction (the servicer is violating federal law). Key RESPA provisions: § 2605(e) — duty to respond to Qualified Written Requests (QWRs) and Notices of Error within 30 days (acknowledgment within 5 days, substantive response within 30 business days), § 1024.35 — error resolution procedures for 9 categories of errors, § 1024.36 — requests for information, § 1024.38 — general servicing policies, § 1024.41 — loss mitigation procedures (dual tracking).
Legal Definition
RESPA and Regulation X impose specific duties on servicers: duty to respond to QWRs and Notices of Error (acknowledge within 5 days, investigate, correct errors, provide written explanation within 30 business days), duty to provide payoff statements within 7 business days, duty to provide payment histories, duty to maintain reasonable servicing policies, duty to evaluate loss mitigation applications, and duty not to dual track. Violations entitle the borrower to actual damages, statutory damages ($2,000 for pattern-or-practice violations), and attorney fees.
When This Defense Applies
Asserted when the servicer: ignored a QWR or Notice of Error, failed to respond within the statutory deadline, failed to correct errors, failed to provide a payoff statement or payment history, maintained improper servicing policies, charged improper fees, or dual-tracked. RESPA violations are among the most common servicing violations and should be asserted early.
Common Foreclosure Scenarios
The borrower sent a QWR disputing fees and the arrears amount — the servicer never responded, and filed for foreclosure based on the disputed amount
The borrower sent a Notice of Error identifying 5 specific errors in the payment history — the servicer responded with a generic letter and made no corrections
The servicer assessed property inspection fees ($15 per inspection, weekly) while the borrower was in active loss mitigation review — improper under § 1024.38
The servicer charged attorney fees before the attorney actually performed the work — advance fees without actual work are improper
The borrower requested a payoff statement to refinance — the servicer didn't provide it for 35 days (exceeding the 7-business-day requirement)
Burden of Proof
The BORROWER must prove: (1) a valid QWR or Notice of Error was sent to the servicer's designated address, (2) the servicer received it (certified mail receipt), (3) the servicer failed to comply with the statutory deadlines/requirements, and (4) damages resulted. The servicer's defenses: the QWR was not sent to the proper address, the QWR was not a 'qualified' written request (didn't identify the account or the error sufficiently), or the error was corrected within the statutory period.
Court Considerations
Courts generally enforce RESPA strictly — the deadlines are mandatory. Key issues: whether a QWR that disputes the validity of the debt (not just servicing errors) is covered (courts are split), whether the servicer's response was 'substantive' (a form letter saying 'we're investigating' with no follow-up is not substantive), and whether RESPA violations alone can stop a foreclosure (typically, RESPA violations support damages and a defense, but the foreclosure may still proceed if the underlying debt is valid).
Homeowner Strategies
Send QWRs and Notices of Error via certified mail, return receipt requested, to the servicer's designated QWR address (NOT the payment address)
Be specific — identify the error, the account, the dates, and the resolution requested; a vague complaint is not a QWR
Track the deadlines: 5 business days for acknowledgment, 30 business days for substantive response
If the servicer fails to respond, send a follow-up and reference the first QWR — this establishes a pattern for statutory damages
Use the servicer's non-compliance as a defense to the foreclosure and a counterclaim for damages
Related Court Documents
Related Court Procedures
Frequently Asked Questions
What is a Qualified Written Request (QWR)?+
A QWR is a written correspondence (not on your payment coupon) that: (1) includes your name and account number, and (2) states the reasons you believe the account is in error or provides sufficient detail for the servicer to identify the information you're requesting. Under § 2605(e), the servicer must acknowledge within 5 business days and respond substantively within 30 business days. A QWR can dispute fees, payments, escrow analysis, or request information about the loan. It's one of the most powerful tools a homeowner has — and one of the most underutilized.
Can I send a QWR myself, or do I need a lawyer?+
You can send a QWR yourself. There is no requirement that a QWR come from an attorney. However, an attorney-drafted QWR (on law firm letterhead) often gets more attention from the servicer's legal/compliance department rather than the customer service queue. The QWR must go to the servicer's designated QWR address — check your monthly statement or the servicer's website for the correct address.
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