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Thursday, December 26, 2013

Qualified Written Requests – RESPA Revisions in 2014

QUESTION: 
What significant amendments are being made to the Qualified Written Request (“QWR”) rules under RESPA effective January 10, 2014? 

ANSWER:  
Section 1463 (c) of the Dodd-Frank Act modifies RESPA by significantly reducing the time period mortgage servicers have to respond to a QWR from a borrower. Section 1463 (c) contains the following modifications: 

(A) The period of time for a servicer to acknowledge receipt of a borrower’s QWR is reduced from 20 days (current requirement) to 5 business days.

(B) The period of time for a servicer to respond to a borrower’s QWR is reduced from 60 days (current requirement) to 30 business days.  A servicer has a right to a 15 day extension to the 30 business day response period by notifying the borrower of the need for the extension and the reason(s) the extension is needed.

In addition, statutory damages available to a borrower have been increased. Statutory damages have been increased from $1,000 to $2,000. Lastly, statutory damages in class action lawsuits have been increased from $500,000 to $1,000,000.

Given these changes and the increased exposure to mortgage servicers resulting therefrom, mortgage servicers need to make sure that their policies and procedures are updated to avoid running afoul of the new time lines concerning responding to a QWR.

Michael Barone
Director/Legal & Regulatory Compliance
Lenders Compliance Group