What is Regulation X?
On January 10, 2014, new regulations issued by the Consumer Financial Protection Bureau (CFPB) went live which fundamentally changed the Real Estate Settlement and Procedures Act of 1974 (RESPA). Borrowers now have the right to sue for Regulation X violations. Jacobs Keeley developed aggressive legal strategies using these regulations to create legal leverage for you.
The Miami foreclosure defense lawyers at Jacobs Keeley recognize these new regulations provide additional protections. For each violation, the borrower may sue for money damages which may include
- Statutory damages of up to $2,000 per violation;
- Actual damages suffered by the borrower;
- Attorneys’ fees and costs.
Since January 2014, the CFPB has created a reporting system to bring violations of the new regulations to its attention. The system is so effective that many law firms advised minutes that they received notice that Jacobs Keeley filed a Reg X complaint against their client. The expectation is these servicers would prefer to resolve their claims rather than litigate with Jacobs Keeley and the CFPB.
As part of recently updated CFPB rules, errors under this section may include:
- Failure to accept payment that conforms to the servicer’s written requirements;
- Failure to apply accepted principal, interest or other charges;
- Failure to credit a payment to the loan account;
- Failure to pay taxes, insurance or other charges the servicer previously agreed to pay, or to refund the escrow account balance;
- Imposition of an unreasonable charge or fee;
- Failure to give an accurate account payoff balance amount when the borrower requests it;
- Failure to give the borrower accurate and timely information regarding loss mitigation options to help a borrower avoid foreclosure;
- Pressing forward with foreclosure judgment or order of sale in violation of 12 CFR 1024.41.
Servicers are not allowed to charge borrowers a fee as a condition of response to a Qualified Written Response, and for 60 days following receipt of a notice of error, servicers can’t report adverse actions to any credit reporting agency regarding any payment subject to that notice.Other Amendments to Regulation X
In response to the foreclosure crisis, the CFPB amended Regulation X with a final rule, effective Jan. 10, 2014, implementing sections of the Dodd-Frank Act as it relates to mortgage servicer obligations.
Those include the aforementioned obligations to provide certain requested information to the borrower, as well as to correct errors asserted by the borrower. Additionally, it provides protections in connection with force-placed insurance, requires the release of accurate mortgage loss mitigation options for borrowers who are delinquent and mandates a “continuity of contact” with servicer staff capable of helping struggling homeowners. It also set the standard for evaluating loss mitigation options, and streamlined other existing provisions of the statute related to mortgage servicing.
Specifically with regard to borrowers who have fallen behind on payments, the new rules say that mortgage servicers:
- Must call or have contact with most borrowers by the time they are 36 days late on their payments.
- Must wait until a borrower is at least 120 days delinquent before initiating foreclosure. The idea is to grant borrowers enough time to inquire about loan modification or other foreclosure alternative.
- May no longer start or continue a foreclosure while simultaneously working with the homeowner seeking a foreclosure alternative (a process known as dual-tracking).
- Must ensure those taking calls from borrowers have access to important documents and are able to answer questions.
- Have to provide homeowners with accurate, timely information when asked about it.
- Must assist borrowers in providing information about all relevant loss mitigation options, and offer a complete evaluation of each option as it applies to that borrower’s situation.
- Must explain to a borrower exactly why he or she is not eligible for certain loss mitigation options.
Our experienced Miami foreclosure defense attorneys are committed to ensuring mortgage servicers adhere to their obligations and respect your rights.
If you're battling foreclosure in Miami or the surrounding areas contact Jacobs Keeley Trial Lawyers for a confidential appointment to discuss your rights.
Call us at (305) 358-7991.