How do you fix a problem you’re having with your mortgage company? Most of the time, you can do it without hiring a lawyer or going to court.
But if you try to get it done with a quick phone call, you’ll probably just get that familiar message: “We’re experiencing unusually high call volume. Please hold for the next available operator.” And you hold and hold and the Indian kid that finally answers the phone is an overworked, underpaid peon who has no authority to do anything more than repeat what his computer tells him about your account.
So you write a letter. But not just any letter. A special kind of letter, one that your mortgage servicer is required by law to acknowledge within 5 days. You write a Qualified Written Request.
If you search the internet for an example of a Qualified Written Request (QWR), you are likely to find a lot of documents that claim to be QWRs, but really are not. Why? Because most of the “QWRs” out there are just blanket requests for information, demanding all sorts of loan documents and other things. Mortgage servicers have no obligation to respond to a request that doesn’t “state the reasons for the belief of the borrower that the account is in error.” Walker v. Equity 1 Lenders Group (S.D. Cal. 2009).
Here is what makes a QWR a QWR:
1. You specify particular errors or omissions that you believe to exist with the account. For instance, you may believe that you were wrongfully assessed $15 “property preservation fees” for 3 months. You need to state that fact in your letter.
2. QWR response requirements only apply to servicers, not the originator or the holder of the mortgage. This is usually the people who send you a statement every month. If you receive regular statements, look on the back of the statement for a Qualified Written Requests address. This may be different from the regular correspondence address and the payment address. If you don’t send it to that address, you may not be able to hold them liable for failing to respond.
3. Demand specific information. DO NOT send a gigantic list of requests for documents. The new CFPB regulations 1024.35 specifically exempt servicers from liability in response to an overbroad request. You can request documents, but they must relate to your dispute. For instance, if you are disputing the servicer’s right to charge you force-placed flood insurance, then you can rightfully request:
- Proof that the policy was paid for;
- The identity of the insurer;
- The provision in the mortgage and note that allows them to charge you such fees;
- Declarations pages and other documents relating to the insurance policy;
- Flood zone certification.
If your only problem is that they’re charging you bogus flood insurance, that does not give you the right to demand a copy of the appraisal used when you bought the house back in 2007.
4. Demand specific corrective action. This should be obvious, but it is something that a lot of people fail to do because they’re more concerned with getting documents and hoping to find a technical violation they use against their lender. The purpose of the QWR and the Notice of Error is to help you and the bank correct mistakes without having to go to court. If you don’t tell them what you want fixed, you can’t hold them liable for failing to fix it! So if they’ve assessed you $45 of bogus “property inspections,” you need to demand that they credit you for that $45, plus any interest or other fees that arose from your not having paid that amount. You also can request that they fix any mention of such account on your credit report.
HERE is a sample QWR that demands information relating to insurance and property inspection fees. Sample QWR
NOTE: There are two exceptions to the rules that a QWR relate to a specific dispute. Even if there is no evidence of a mortgage company doing anything wrong, you always have the right to know a) who owns your mortgage and b) what is the payoff amount. The Dodd-Frank Amendments to TILA allow you to request the identity of the holder of your mortgage note at any time and without being charged a fee. 15 U.S.C. 1641(f).
In Alabama, your QWR should mention that you demand a payoff statement pursuant to Ala. Code Sec. 35-10-91. Alabama law provides a specific right to know the payoff amount for your loan.
The QWR can be a very useful tool for fixing account errors and learning why you have been charged amounts you may not legitimately owe, but it must be used judiciously and done properly. If a bank refuses to acknowledge your QWR within 5 days or correct/explain the mistake with 30, then they are liable to you for any damages you sustain as a result. You can do this.