Loans

Centlar RESPA Violation Lawsuit Dismissed in Part



A federal judge partially granted Cenlar’s motion to dismiss the allegation of violations of the Real Estate Settlement Procedures Act. loan modification This case highlights what courts may consider priorities in formal copyright communications.

O’Keefe, Eastern District Judge Edmund Sargus Jr. of the Southern District of Ohio, allowed the portion of the claim centered on the erroneous notification documents to move forward but dismissed other claims related to the request for information in the case. v. Cenlar.

The case centers on what prosecutors say was a dispute that stemmed from a request by one of the men to correct the spelling of their name in an amended agreement that was reportedly recorded without an adjustment to the bill.

The plaintiffs allege that they subsequently received a new, corrected mod, which the service provider said was modified because the previous mod did not meet expectations. They refused to sign the new modification because they found the $90,000 difference unacceptable.

During the dispute, Complainant issued both an information request and an error notice.

The NOE notified the company that the defendants believed it was a mistake to refuse to accept payment under the modified terms of the record. It also notified Cenlar that it believed the interest, fees and charges received as billed under the original loan terms were in error.

The RFI requested “call records, recording service records, and communications between Cenlar and reporters” as well as “all documents from January 2021 to the present” related to the current issue.

Sargus said in the opinion and order filed last week that “Plaintiffs’ only damages as a result of Cenlar’s patently fraudulent RFI responses appear to be the costs required to prepare and transmit the QWR, which this court finds insufficiently specific.” Sargus said in the opinion and order filed last week said in an opinion and order filed last week. Earlier.

However, the judge said he did believe the alleged harm could have been “caused by the NOE.”

According to court documents, the content of the service’s response to the NOE played a role in his conclusion.

Sargus 表示,NOE 的回應應該包含更正或“合理的調查”,並以“一份書面通知結束,其中包括服務機構確定沒有發生錯誤的聲明”、做出這一決定的原因以及借款人如何獲得支持document.

Therefore, “the fact that Cenlar, after conducting a reasonable investigation, concluded that no enforceable loan modification existed does not relieve them of their responsibility to conduct a reasonable investigation and explain their belief,” he said.

The case is part of a broader body of law that servicers and litigators are reviewing to update compliance parameters for dealing with the issue. Qualified written request Under RESPA.

Another recent legal development is part of a broader lawsuit centered on responses to formal borrower communications involving specialized loan servicing and allegations brought by a former couple, Michael and Renita Russell. .

The dispute involves a loan dating back to the loose, securitization period mortgage underwriting They’re common, and housing crashes are complicated Bad Mortgage However, the defendants allege that it was not until 2019 that SLS “erroneously added $276,582.70 as ‘previously deferred principal.'”

“The ‘previous deferred principal’ should not have been added because that amount was already included in the modified unpaid principal balance,” they said in court documents. They noted that this brought their debt to a difficult level. The level of management exceeds the value of $946,239.60. their home.

Their amended complaint, filed in California Superior Court in January, alleges that although the servicer submitted a 72-page response to their qualified written request regarding the issue, the document “violated RESPA because SLS provided no information to explain the significant increase”. ”.

The condemned eventually applied for and received approval for the short sale. Their home sold for $793,918.78, an amount that was used to pay off their higher debt obligations, but they claim that “the actual debt obligation at the time of the short sale was approximately $600,000” and that it should return the funds to them.

SLS does not comment on legal proceedings, according to an emailed statement from a spokesperson for its parent company Computershare.

The servicer did file a cross-complaint in February, claiming that “Plaintiff’s financial mismanagement was the primary, if not the sole, reason why Detainee defaulted on his loan, was unable to reinstate the loan, sold his property and suffered any losses.” The interests of the husband and wife are divided according to the circumstances of the separation of the husband and wife.

The defendants, in turn, entered defenses to the cross-complaint.

The defendants claim that “SLS maintains that Defendants’ continued claim was a wrongful foreclosure and therefore Defendants’ ability to afford the property at issue,” but that information is incorrect given that the home was sold through a short sale.

Additionally, the defendants allege that “at all relevant times in this case, Michael and Renita were a married couple protecting jointly owned property that Michael and Renita held as joint tenants” and further claimed that “the cross-complaint is frivolous Yes, because the only purpose of delay is.”

At the time of writing, no further action on the case is expected until June.





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