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RESPA Qualified Written Requests May Not Be Used to Create Foreclosure Defenses

The United States District Court for the District of Massachusetts has held that failure to respond to a purported Qualified Written Request, sent to a loan servicer pursuant to the Real Estate Settlement Procedures Act, 12 U.S.C. 2605 et seq. ("RESPA"), cannot serve as a defense to collection of a promissory note where a defendant suffered no actual damages as a result of any purported RESPA violation.  Santander Bank v. Sturgis, et al., (C.A. No. 11-10601-DPW) (D. Mass. Nov. 13, 2013).

The bank brought suit against the defendants to collect on deficiencies on three promissory notes, after foreclosure on the properties securing the notes failed to satisfy the outstanding debts.  Defendants counterclaimed for alleged violations of RESPA, claiming that the bank failed to respond adequately to a purported Qualified Written Request.

The Court entered summary judgment in favor of the bank, finding that the defendants suffered no actual damages as a result of the purported RESPA violations, such actual damages being required by the statute.  The Court went on to note that Qualified Written Requests under RESPA should not be used to create affirmative claims or foreclosure defenses.  "I agree with and am mindful of the fact that 'RESPA and the QWR regulation was not designed, and should not be used, as a vehicle to permit in default borrowers to flood their lender with documentation requests, on the hope that a failure to timely comply will lead to an affirmative cause of action, or a defense to a collection or foreclosure action.'"  (Citing Eifling v. National City Mortg., 2011 WL 8932333 at *3 (W.D. Wash. March 15, 2011).  The Court went on to note that even drawing all inferences in the defendants' favor, it was clear to the Court that the bulk of the purported QWR letter was intended to do just that.

Alleging RESPA violations is a common practice in foreclosure actions.  The United States District Court has signaled that those allegations will not be successful without actual injury, and will not be credited when used simply to create foreclosure defenses.

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