The United States District Court for the District of New Jersey recently denied a defendant loan servicer’s motion to dismiss a Real Estate Settlement Procedures Act (“RESPA”) claim, holding that plaintiff borrowers had adequately pled that defendant had failed to respond to their qualified written request (“QWR”) under RESPA. See Herrera v. Cent. Loan Admin. & Reporting, 2017 WL 4548268 (D.N.J. Oct. 12, 2017). In the case, plaintiffs defaulted on their loan and, before the foreclosure sale, sent multiple requests to defendant in order to obtain their servicing files, but without success. They also submitted loss mitigation paperwork but defendant denied their application. In September 2016, the day after the foreclosure sale, plaintiffs sent defendant a request for information on why defendant denied their mitigation application, but defendant did not respond. Six months later, plaintiffs sent a Notice of Error to defendant. Defendant responded by admitting it had not responded to the September 2016 letter but claiming that it previously had responded to plaintiffs’ inquiries. Plaintiffs then commenced this action seeking to compel defendant to comply with its RESPA obligations. Defendant filed a motion to dismiss, arguing: (i) the September 2016 letter was not a QWR requiring a response; (ii) it previously sent most of the information requested in the QWR; and (iii) plaintiffs did not allege either actual damages or a pattern or practice of noncompliance by defendant, which is required under RESPA. The Court denied the motion to dismiss.
First, the Court held that the September 2016 letter was a QWR under RESPA. RESPA defines a QWR as “written correspondence . . . that includes a statement of the reasons for the belief of the borrower, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.” 12 U.S.C. 2605(e)(1)(B)(ii). Although defendant argued that plaintiffs did not set forth any reason to believe their account was in error, the Court held that simply seeking their mitigation files “provides sufficient detail to the servicer regarding other information sought by the borrower.” Second, the Court held that defendant’s claim that it sent “most” of the information requested by plaintiffs in prior responses did not meet RESPA’s standards because it indicated that some requested information was omitted. Finally, the Court found that plaintiffs’ allegations indicated that they sent a series of requests to defendant that were not timely or completely answered, which was sufficient to allege a pattern or practice of noncompliance.