On Tuesday February 10, 2015, the United States District Court for Southern District of Alabama adopted a Magistrate Judge’s Report and Recommendation dismissing a Real Estate Settlement Procedures Act (RESPA) claim brought by a borrower against a former servicer of her mortgage loan. The borrower’s RESPA claim was based on a response to a Qualified Written Request (QWR) she mailed to her former servicer, Nationstar Mortgage, LLC, several months after she refinanced her loan and after Nationstar had ceased servicing her loan. In her QWR she asked why her payments had increased by $100.00 per month during the time Nationstar serviced her loan. Nationstar timely responded to the QWR, explaining that it reviewed its servicing records and that it had not erred in servicing the borrower’s loan. Additionally, Nationstar’s response attached several documents associated with the loan, including a detailed payment history. Nationstar also provided additional contact information in case the borrower desired further information.
The borrower alleged that Nationstar failed to comply with RESPA because Nationstar’s response to the borrower’s QWR “failed to correct” a servicing error and contained boilerplate statements without sufficient detail to explain why there was no servicing error. The borrower further alleged that Nationstar had a “pattern or practice” of providing similar boilerplate responses to QWRs to five other individuals in Alabama and other states.
Nationstar moved to dismiss the complaint and a Magistrate Judge issued a report and recommendation, finding that Nationstar’s QWR response complied with RESPA because a servicer is only required to do one of three things once it receives a QWR: (1) make appropriate corrections to the borrower’s account, (2) explain why it believes the account is correct, or (3) provide requested information or explain why it is not available. According the Magistrate Judge’s report, Nationstar’s response, that “related documents [to the loan] were reviewed” and that “after conducting an investigation, Nationstar is unable to locate the information you requested …. However, we did review the account, and all transactions appear to be correct from our records,” complied with RESPA. Specifically, “[u]nder RESPA, Nationstar is not required to give a response that is desired by or satisfies Plaintiff, but is merely required to ‘provide a statement of its reasons,’ which Nationstar did.” The Magistrate Judge also found that the borrower failed to adequately allege the existence of actual damages, that the expense of sending a QWR (e.g. postage) cannot provide the sole basis for actual damages under RESPA, and that the borrower could not establish a causal link between her alleged damages (the $100/month overpayment) and the QWR response, in part, because the alleged damage had occurred before the QWR was sent. Further, Nationstar was not required to “correct the account” because Nationstar’s response indicated that it had determined that the account appeared to be correct. Finally, the Magistrate Judge found that, because there was no RESPA violation in this case and the borrower had provided only one additional QWR response, the borrower’s pattern or practice claim was insufficient as a matter of law.
The borrower filed a notice of appeal to the Eleventh Circuit shortly after the District Court adopted the Magistrate Judge’s Report and Recommendation.