(a) Notice of error. A servicer shall comply with the requirements of this section for
any written notice from the borrower that asserts an error and that
includes the name of the borrower, information that enables the servicer
to identify the borrower’s mortgage loan account, and the error the
borrower believes has occurred. A notice on a payment coupon or other
payment form supplied by the servicer need not be treated by the servicer
as a notice of error. A qualified written request that asserts an
error relating to the servicing of a mortgage loan is a notice of
error for purposes of this section, and a servicer must comply with
all requirements applicable to a notice of error with respect to such
qualified written request.
(b) Scope
of error resolution. For purposes of this section, the term “error”
refers to the following categories of covered errors:
(1) Failure to accept a payment that
conforms to the servicer’s written requirements for the borrower to
follow in making payments.
(2) Failure
to apply an accepted payment to principal, interest, escrow, or other
charges under the terms of the mortgage loan and applicable law.
(3) Failure to credit a payment to
a borrower’s mortgage loan account as of the date of receipt in violation
of 12 CFR 1026.36(c)(1).
(4) Failure
to pay taxes, insurance premiums, or other charges, including charges
that the borrower and servicer have voluntarily agreed that the servicer
should collect and pay, in a timely manner as required by section
1024.34(a), or to refund an escrow account balance as required by
section 1024.34(b).
(5) Imposition
of a fee or charge that the servicer lacks a reasonable basis to impose
upon the borrower.
(6) Failure to
provide an accurate payoff balance amount upon a borrower’s request
in violation of section 12 CFR 1026.36(c)(3).
(7) Failure to provide accurate information
to a borrower regarding loss mitigation options and foreclosure, as
required by section 1024.39.
(8)
Failure to transfer accurately and timely information relating to
the servicing of a borrower’s mortgage loan account to a transferee
servicer.
(9) Making the first notice
or filing required by applicable law for any judicial or non-judicial
foreclosure process in violation of section 1024.41(f) or (j).
(10) Moving for foreclosure judgment
or order of sale, or conducting a foreclosure sale in violation of
section 1024.41(g) or (j).
(11) Any
other error relating to the servicing of a borrower’s mortgage loan.
(c) Contact information for
borrowers to assert errors. A servicer may, by written notice
provided to a borrower, establish an address that a borrower must
use to submit a notice of error in accordance with the procedures
in this section. The notice shall include a statement that the borrower
must use the established address to assert an error. If a servicer
designates a specific address for receiving notices of error, the
servicer shall designate the same address for receiving information
requests pursuant to section 1024.36(b). A servicer shall provide
a written notice to a borrower before any change in the address used
for receiving a notice of error. A servicer that designates an address
for receipt of notices of error must post the designated address on
any Web site maintained by the servicer if the Web site lists any
contact address for the servicer.
(d) Acknowledgment of receipt. Within five days (excluding legal
public holidays, Saturdays, and Sundays) of a servicer receiving a
notice of error from a borrower, the servicer shall provide to the
borrower a written response acknowledging receipt of the notice of
error.
(e) Response to notice of
error.
(1) Investigation and response requirements.
(i) In general. Except as provided in paragraphs
(f) and (g) of this section, a servicer must respond to a notice of
error by either:
(A)
Correcting the error or errors identified by the borrower and providing
the borrower with a written notification of the correction, the effective
date of the correction, and contact information, including a telephone
number, for further assistance; or
(B) Conducting a reasonable investigation and providing the borrower
with a written notification that includes a statement that the servicer
has determined that no error occurred, a statement of the reason or
reasons for this determination, a statement of the borrower’s right
to request documents relied upon by the servicer in reaching its determination,
information regarding how the borrower can request such documents,
and contact information, including a telephone number, for further
assistance.
(ii) Different or additional error. If during
a reasonable investigation of a notice of error, a servicer concludes
that errors occurred other than, or in addition to, the error or errors
alleged by the borrower, the servicer shall correct all such additional
errors and provide the borrower with a written notification that describes
the errors the servicer identified, the action taken to correct the
errors, the effective date of the correction, and contact information,
including a telephone number, for further assistance.
(2) Requesting
information from borrower. A servicer may request supporting
documentation from a borrower in connection with the investigation
of an asserted error, but may not:
(i) Require a borrower to provide such
information as a condition of investigating an asserted error; or
(ii) Determine that no error occurred
because the borrower failed to provide any requested information without
conducting a reasonable investigation pursuant to paragraph (e)(1)(i)(B)
of this section.
(3) Time limits.
(i) In general. A servicer must comply with the requirements of paragraph (e)(1)
of this section:
(A)
Not later than seven days (excluding legal public holidays, Saturdays,
and Sundays) after the servicer receives the notice of error for errors
asserted under paragraph (b)(6) of this section.
(B) Prior to the date of a foreclosure sale
or within 30 days (excluding legal public holidays, Saturdays, and
Sundays) after the servicer receives the notice of error, whichever
is earlier, for errors asserted under paragraphs (b)(9) and (10) of
this section.
(C) For all other asserted
errors, not later than 30 days (excluding legal public holidays, Saturdays,
and Sundays) after the servicer receives the applicable notice of
error.
(ii) Extension of time limit. For asserted errors
governed by the time limit set forth in paragraph (e)(3)(i)(C) of
this section, a servicer may extend the time period for responding
by an additional 15 days (excluding legal public holidays, Saturdays,
and Sundays) if, before the end of the 30-day period, the servicer
notifies the borrower of the extension and the reasons for the extension
in writing. A servicer may not extend the time period for responding
to errors asserted under paragraph (b)(6), (9), or (10) of this section.
(4) Copies of documentation. A servicer shall
provide to the borrower, at no charge, copies of documents and information
relied upon by the servicer in making its determination that no error
occurred within 15 days (excluding legal public holidays, Saturdays,
and Sundays) of receiving the borrower’s request for such documents.
A servicer is not required to provide documents relied upon that constitute
confidential, proprietary or privileged information. If a servicer
withholds documents relied upon because it has determined that such
documents constitute confidential, proprietary or privileged information,
the servicer must notify the borrower of its determination in writing
within 15 days (excluding legal public holidays, Saturdays, and Sundays)
of receipt of the borrower’s request for such documents.
(5) Omissions
in responses to requests for documentation. In its response to
a request for documentation under paragraph (e)(4) of this section,
a servicer may omit location and contact information and personal
financial information (other than information about the terms, status,
and payment history of the mortgage loan) if:
(i) The information pertains to a potential
or confirmed successor in interest who is not the requester; or
(ii) The requester is a confirmed
successor in interest and the information pertains to any borrower
who is not the requester.
(f) Alternative compliance.
(1) Early correction. A servicer is not required to comply with
paragraphs (d) and (e) of this section if the servicer corrects the
error or errors asserted by the borrower and notifies the borrower
of that correction in writing within five days (excluding legal public
holidays, Saturdays, and Sundays) of receiving the notice of error.
(2) Error
asserted before foreclosure sale. A servicer is not required
to comply with the requirements of paragraphs (d) and (e) of this
section for errors asserted under paragraph (b)(9) or (10) of this
section if the servicer receives the applicable notice of an error
seven or fewer days before a foreclosure sale. For any such notice
of error, a servicer shall make a good faith attempt to respond to
the borrower, orally or in writing, and either correct the error or
state the reason the servicer has determined that no error has occurred.
(g) Requirements not applicable.
(1) In general. A servicer is not required
to comply with the requirements of paragraphs (d), (e), and (i) of
this section if the servicer reasonably determines that any of the
following apply:
(i) Duplicative notice of error. The
asserted error is substantially the same as an error previously asserted
by the borrower for which the servicer has previously complied with
its obligation to respond pursuant to paragraphs (d) and (e) of this
section, unless the borrower provides new and material information
to support the asserted error. New and material information means
information that was not reviewed by the servicer in connection with
investigating a prior notice of the same error and is reasonably likely
to change the servicer’s prior determination about the error.
(ii) Overbroad
notice of error. The notice of error is overbroad. A notice of
error is overbroad if the servicer cannot reasonably determine from
the notice of error the specific error that the borrower asserts
has occurred on a borrower’s account. To the extent a servicer can
reasonably identify a valid assertion of an error in a notice of error
that is otherwise overbroad, the servicer shall comply with the requirements
of paragraphs (d), (e) and (i) of this section with respect to that
asserted error.
(iii) Untimely notice of error. A notice of error
is delivered to the servicer more than one year after:
(A) Servicing for the mortgage loan that
is the subject of the asserted error was transferred from the servicer
receiving the notice of error to a transferee servicer; or
(B) The mortgage loan is discharged.
(2) Notice to borrower. If a servicer determines
that, pursuant to this paragraph (g), the servicer is not required
to comply with the requirements of paragraphs (d), (e), and (i) of
this section, the servicer shall notify the borrower of its determination
in writing not later than five days (excluding legal public holidays,
Saturdays, and Sundays) after making such determination. The notice
to the borrower shall set forth the basis under paragraph (g)(1) of
this section upon which the servicer has made such determination.
(h) Payment requirements
prohibited. A servicer shall not charge a fee, or require a borrower
to make any payment that may be owed on a borrower’s account, as a
condition of responding to a notice of error.
(i) Effect on servicer remedies.
(1) Adverse
information. After receipt of a notice of error, a servicer may
not, for 60 days, furnish adverse information to any consumer reporting
agency regarding any payment that is the subject of the notice of
error.
(2) Remedies permitted. Except as set forth in this section with
respect to an assertion of error under paragraph (b)(9) or (10) of
this section, nothing in this section shall limit or restrict a lender
or servicer from pursuing any remedy it has under applicable law,
including initiating foreclosure or proceeding with a foreclosure
sale.
