What We Do
We sue loan servicers and credit reporting agencies who violate the rights of consumer borrowers.
Home Loan Servicing Laws
Tough federal laws protect home loan borrowers from the harm caused by the mistakes and misconduct of banks, mortgage lenders, and predatory lenders. The Real Estate Settlement Procedures Act (RESPA), the Truth in Lending Act (TILA), the Fair Credit Reporting Act, and other laws, both state and federal, offer protections against lender misconduct, and credit reporting problems that come up in the context of a home loan.
Home loan borrower disputes with mortgage lenders often involve frustration in obtaining account information and meaningful, or any, assistance in resolving loan servicing mistakes. Consumer borrowers spend hours trying to resolve servicing errors, often with no success, usually spending many of those hours attempting to navigate the lender’s voice mail system in search of someone who might provide reliable information about the borrower’s account or have the authority to resolve disputes, a vexing, protracted, and often fruitless process. On top of this is the problem of your lender compounding its mistakes by reporting falsely that you are behind in making loan payments.
In 1990, Congress amended RESPA to add new requirements on servicers of federally-related mortgage loans. RESPA requires servicers to respond to borrower inquiries and correct account errors, disclose information relating to the transfer of servicing operations, and make timely payments out of escrow accounts.
A loan “servicer” is the entity responsible for accepting your loan payments, maintaining escrow accounts, and the like. This will be the maker or holder of the loan if it also services the loan.
Your Rights Under RESPA
RESPA’s loan dispute provisions permit consumers to obtain information about the servicing of their home loan and escrow accounts by providing a written inquiry, known under the statute as a “Qualified Written Request” or a “Notice of Error.” These dispute rights require the home loan servicer to respond to the specific dispute, and, when appropriate, require the servicer to take corrective action.
This dispute must be done in writing. The law puts certain time deadlines on loan servicers. Importantly, during this time period, your loan servicer cannot give any adverse information to a credit reporting agency about the payments subject to your dispute. This means that they can’t put bad information on your credit report during the sixty-day period they have to respond to your dispute.
In responding to your dispute, the servicer must:
» Make any necessary corrections to the borrower’s account, including crediting any late charges or penalties resulting from the error, and provide written notification of the corrections they make
» After conducting an investigation, provide the borrower with a written explanation or clarification as to why the servicer believes the account is correct
» After conducting an investigation, provide the borrower with the information requested, or an explanation why the information sought is unavailable
Each of these forms of response to the borrower must include the name and telephone number of a servicer representative who can provide assistance to the borrower.
RESPA gives the consumer borrower the right to sue for violation of the statute. This right to sue gives the consumer the right to recover actual damages, statutory damages, costs and reasonable attorney fees. There is a three-year statute of limitations for actions under this law. Most courts have found that a consumer borrower is entitled to recover actual damages for emotional distress.
Your Rights Under TILA
In addition to the rights provided under RESPA, the Truth in Lending Act requires servicers to provide information about ownership of a note or mortgage within 10 business days, and to provide information about loan payments, loan history, and other pertinent loan matters within 30 business days.
If your loan servicer reports incorrect information on your credit report, you have the right to dispute the false information, and to sue if proper corrections are not made.