Litigation Exposure Under The 2013 Dodd-Frank Mortgage Servicing Regulations

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In This Issue:

- Introduction

- Potential Litigation Exposure Under the New Mortgage Servicing Regulations Governing Responses to Borrower Inquiries

..Which of the New Servicing Regulations Governing Responses to Borrower Inquiries Are Privately Actionable And Which Are Not?

..Potential Litigation Challenges Presented by Notices of Error and Requests for Information Under RESPA

..Potential Challenges Specific to “Notices of Error” Under §1024.35

..Potential Challenges Specific to “Requests for Information” Under §1024.36

..Potential Challenges Specific to Requests for Payoff Statements Under §1026.36

- Interface of the New Loss Mitigation and Mortgage Servicing Regulations with the Foreclosure Process

..Which of The New Loss Mitigation Regulations Are Privately Enforceable?

..Section 1024.39 - Early Intervention Requirements

..Section 1024.41 – Loss Mitigation Requirements

..Defining “Application”

..Pre-Foreclosure Limitations

..Notice and Review Requirements For Loss Mitigation

..Limitations on Dual Tracking

..Loss Mitigation Appeals

..Back to Where We Started – Are §§1024.35 (Notice of Error) and 1024.36 (Request for Information) Conditions Precedent to Foreclosure?

- Conclusion

- Excerpt from Potential Litigation Exposure Under the New Mortgage Servicing Regulations Governing Responses to Borrower Inquiries:

As amended, Regulations X and Z contain three new provisions impacting servicer responses to borrower inquires. While Dodd-Frank made certain changes directly to RESPA’s existing framework for a Qualified Written Request (“QWR”), the effect of the Notice of Error, Information Request, and Payoff Request regulations will increase the number and type of written inquiries that trigger a legal obligation on the part of the servicer to respond in a specified time and manner. Failing to do so will potentially create litigation exposure under the private rights of action of both the TILA and RESPA.

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