The U.S. Dept. of Housing and Urban Development has an excellent web site that covers all aspects of Real Estate Settlement Procedures Act. RESPA is a consumer disclosure and anti-kickback statute designed to inform consumers of their settlement costs and to prohibit kickbacks that can increase the cost of obtaining a mortgage.
Different players in the lending game operate under different rules. For example: mortgage lenders and bankers are NOT required to disclose yield spread premiums; mortgage brokers ARE required to offer those disclosures. The yield spread premium is the "refund" or "commission" given to the loan officer/mortgage company for selling the loan above the going interest rate. Most loan officers conveniently "forget" to tell consumers about this charm. Ask the loan officer for copy of the "lock sheet" . If the loan offer declines, DEMAND a copy of the lock sheet!
A consumer with a complaint can use the following format for a letter (taken from HUD web site). (I would highly recommend that the consumer speak with an attorney who is familiar with RESPA and the intricacies of the Act.)
Attention Customer Service:
Subject: [Your loan number]
[Names on loan documents]
[Property and/or mailing address]This is a "qualified written request" under Section 6 of the Real Estate Settlement Procedures Act (RESPA).
I am writing because:
- Describe the issue or the question you have and/or what action you believe the lender should take.
- Attach copies of any related written materials.
- Describe any conversations with customer service regarding the issue and to whom you spoke.
- Describe any previous steps you have taken or attempts to resolve the issue.
- List a day time telephone number in case a customer service representative wishes to contact you.
I understand that under Section 6 of RESPA you are required to acknowledge my request within 20 business days and must try to resolve the issue within 60 business days.
Sincerely,
[Your name]
REMEMBER: This letter SHOULD NOT be included with your mortgage payment, but should be sent separately to the customer service address.
You SHOULD continue to make the required mortgage and escrow payment until the request is resolved.
You may bring a private right of action under Section 6, if you suffer damages due to the lender's servicing of the loan. See the RESPA statute and regulations.
More links:
BEWARE of the BAD "Good Faith Estimate"
Questions to ask your mortgage broker
Junk Fees
"Mean" questions to ask your loan officer
Predatory lending legal specialists (excellent attorneys)
Comments