The United States District Court for the Northern District of New York recently dismissed a Real Estate Settlement Procedures Act (“RESPA”) complaint brought by a plaintiff who claimed to have purchased the borrowers’ home and assumed their note and mortgage. See Garrasi v. Selene Fin., LP, 2019 WL 4305411 (N.D.N.Y. Sept. 11, 2019). In the case, plaintiff purchased the home of two borrowers, and the borrowers assigned plaintiff “all their rights and interest under the terms of the note and mortgage” on the property. Plaintiff then sent multiple letters to defendants that he designated as qualified written requests (“QWRs”) and asked for information about the owner of the note and mortgage, as well as other information. Defendant responded and informed plaintiff that he was not authorized to receive that information unless he had a third party authorization form signed by the borrowers. Plaintiff then brought this action, alleging that defendant violated RESPA by not properly responding to his QWRs. Defendant moved to dismiss the action.
The Court granted the motion and dismissed the RESPA claim. First, the Court found that plaintiff did not have standing to bring the claim. RESPA provided that entities who fail to comply with certain provisions “shall be liable to the borrower for each such failure.” In this case, plaintiff was not the borrower, and had no standing. Second, the Court found that plaintiff’s letters were not QWRs, which meant that defendant had no obligation to respond to them. “Defendant’s obligation to respond to a borrower’s inquiry under RESPA cannot be triggered when Plaintiff failed to assert an account error or establish any connection between the information sought and the servicing of the loan. Defendant is not required to respond to all inquiries or complaints[.]” Finally, the Court held that “RESPA does not apply to ‘any assumption in which the lender does not have the right expressly to approve a subsequent person as the borrower on an existing federally related mortgage loan.’” 12 C.F.R. § 1024.5(a) & (b)(5).