Consumer Law Library
Real Estate Settlement Procedures Act (RESPA)
If your mortgage servicer makes a mistake, RESPA gives you a formal way to make them fix it.
What RESPA covers
The Real Estate Settlement Procedures Act (12 U.S.C. § 2601 et seq.) and the CFPB’s Regulation X (12 C.F.R. part 1024) govern the closing process and — most important for credit repair — how mortgage servicers handle your loan.
Notices of error and requests for information
You can send your servicer a written notice of error (for example, a payment not credited, a wrong escrow charge, or an improper late fee) or a request for information about your loan. Send it to the servicer’s designated address. For most errors, the servicer must acknowledge your notice within 5 business days and, within 30 business days, either correct the error or explain in writing why it believes no error occurred.
Loss mitigation
Regulation X requires servicers to reach out to delinquent borrowers, evaluate complete loss-mitigation applications for all available options, and — in many situations — not move forward with foreclosure while a timely, complete application is pending.
Remedies
A borrower may recover actual damages and, where there is a pattern or practice of noncompliance, additional damages of up to $2,000, plus attorney’s fees. Claims under the servicing provisions generally must be filed within 3 years.
Sources: RESPA, 12 U.S.C. §§ 2605, 2614; Regulation X, 12 C.F.R. §§ 1024.35, 1024.36, 1024.39–1024.41.
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