The CFPB meets the obligations of managers to respond to requests from borrowers

On April 4, the CFPB filed an amicus brief in a case on appeal to the United States Court of Appeals for the Ninth Circuit regarding a mortgage manager who allegedly failed to respond to multiple inquiries from two separate consumers regarding their loans despite Regulation X’s requirement that service agents respond when a borrower submits a request for information that “sets out the information the borrower is requesting regarding the borrower’s mortgage loan”. The plaintiffs filed suit after the defendant director refused to provide the requested information, saying he would not respond “because the issues raised are the same or very closely related to the issues raised” in the ongoing litigation regarding mortgages.

The United States District Court for the District of Oregon denied plaintiffs’ claims, noting that under RESPA, “a mortgage servicer has only an obligation to provide a written response to a [qualified written request] which is seeking “information relating to the servicing of this loan”” and that the applicants’ inquiries regarding the ownership of their loans and the request for other miscellaneous information did not “trigger[] [the defendant’s] obligations to respond under Regulation X”, as a servicing agent has a “duty to respond” only if a request for information “relates to the servicing of the loan”.

In urging the appeals court to overturn the decision, the Office argued that under Section 1024.36 of Regulation X, “managers must generally respond to ‘any written request for information from a borrower’ that requests “information…regarding the borrower’s mortgage.” to obtain information “regarding” a loan and thereby triggers a servicing agent’s duty to respond” under the rules. The Bureau said Regulation X generally requires service agents to respond to requests for information “regarding” a borrower’s mortgage, explaining that it “includes explicit language to this effect in the 2013 rule for make it clear that the rule created a unified set of requirements such that repairers’ obligations to respond were the same for a qualified written request as for any other request for information”, and that it “did not exclude requests for ‘information that does not relate to maintenance within the scope of Section 1024.36.’ The Bureau agreed with plaintiffs that there is “no litigation exception to a repairer’s obligation to respond to requests for information under Regulation X”. The Bureau further noted in a blog post that “[a] the pending lawsuit does not remove a borrower’s right to a response from their loan officer under Regulation X.”

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