The Real Estate Settlement Procedures Act: Regulation X
Chicago Consumer Attorneys
In January 2014, The Consumer Financial Protection Bureau (CFPB) made important
changes to Regulation X of the
Real Estate Settlement Procedures Act (RESPA). These changes have created a private right of action for consumers
against mortgage loan servicers who failed in their duty to correct irregularities
with application of payments, promptly and properly respond to requests
for information, assess charges and fees, or comply with timelines for
handling applications for loan modifications, short sales, and deeds in
lieu of foreclosures in a timely manner.
How Does Regulation X Benefit Homeowners?
In the past, dual tracking was a common occurrence among delinquent borrowers.
Even though a homeowner may have been in the middle of obtaining a
loan modification, mortgage loan servicers could still move to foreclose, leaving the homeowner
without remedy or recourse. Other impediments to homeowners included an
inability to bring a claim for mistakes in escrow calculations, late fees,
or unfair corporate advances, or against lenders who failed to provide
the homeowner with monthly mortgage statements that were easy to understand.
Now, changes to Regulation X and TILA’s Regulation Z have defined
new, higher standards for home mortgage lenders, enabling consumers to
have more options for legal action in the event of a dispute with their lenders.
Regulation X enforces the following changes:
- Certain information must be provided to borrowers upon request
- Protections are provided to mortgage loan borrowers in connection with
- Services are obligated to correct errors asserted by mortgage loan borrowers
- Servicers are obligated to establish reasonable policies and procedures
- Servicers must provide information about mortgage loss mitigation options
to delinquent borrowers
- Servicers must evaluate borrowers’ applications for available loss
- Servicers must establish procedures and policies for providing delinquent
borrowers with continuity of contact with servicer personnel
Who May Benefit from a Regulation X Case Review?
Mortgage loan borrowers who meet any of the following criteria should immediately
contact Sulaiman Law Group, LTD to request a case review:
Borrowers who have been recently discharged from
Chapter 7 or
- Borrowers with loan modifications where the loan modification has not been
honored by a loan servicer or successor loan servicer
- Borrowers who have filed bankruptcy to avoid foreclosure, but who had an
application for loss mitigation pending
- Borrowers who had a contract to sell their home by way of a short sale,
but the servicer failed to make a decision within 30 business days from
submission of application and the buyer withdrew
- Borrowers with lender placed or forced placed insurance
- Borrowers who have trial loan modifications that last beyond three months
- Borrowers with a loan modification that is not recognized by a new servicer
- Borrowers with excessive escrow deficiencies
You May Have a Claim Under RESPA!
Consult with Sulaiman Law Group, LTD as soon as possible if any of the
following describe your situation:
- Your loan servicer failed to honor a loan modification that you both agreed to
- Your loan servicer failed to make a timely decision (within 30 days) on
a short sale
- Your loan servicer referred for foreclosure before your payments have been
past-due for more than 120 days
- Your servicer moved forward in any way to foreclose after you have submitted
a complete loan modification application
- Your servicer wrongfully charged you for legal fees, property inspections,
or unnecessary appraisals
- Your servicer failed to properly calculate escrow, resulting in an overcharge
The above actions are considered misconduct under Regulation X, and as
such, you may have a claim against your mortgage loan servicer. We encourage
you to call Sulaiman Law Group, LTD today to speak with an Illinois consumer
lawyer about your case. Our team is well known throughout the state for
our commitment to protecting the rights of consumers and homeowners against
Fill out an online contact form, or call us at (312) 313-1613 to get started with your case evaluation.