Ninth Circuit Holds Mortgage Servicers Have No RESPA Duty To Respond to Request for Loan Terms

Mortgage Servicing RESPA

On December 11, the U.S. Court of Appeals for the Ninth Circuit held that letters sent by two borrowers challenging the monthly payment due on their mortgage loan were not “qualified written requests” and therefore did not trigger the servicer’s duty under RESPA to respond. Medrano v. Flagstar Bank, FSB, No. 11-55412, 2012 WL 6183549 (9th Cir. Dec. 11, 2012). The borrowers alleged that their mortgage servicer failed to respond adequately to three letters in which the borrowers challenged the monthly payment due on their loan. RESPA grants borrowers a private right of action against servicers who fail to respond to a “qualified written request.” Following the Seventh Circuit’s decision in Catalan v. GMAC Mortgage Corp., 629 F.3d 676 (7th Cir. 2011), the court held that RESPA provides that such requests must (i) reasonably identify the borrower’s name and account, (ii) either state the borrower’s reasons for the belief that the account is in error or provide sufficient detail to the servicer regarding other information sought, and (iii) seek information relating to the servicing of the loan. The court held that because the letters did not seek information relating to the servicing of the loan, but rather challenged the loan’s terms, the letters were not qualified written requests and the servicer had no duty to respond. The court affirmed the district court’s dismissal of the borrowers’ RESPA claims and remand of the borrowers’ remaining state law claims.