An Overview of the Qualified Written Request (QWR) Process with a Focus on Borrower's Rights
Qualified written requests (QWR) may be an effective tool for homeowners in foreclosure. As Margery Golant has stated in her Legal Guide “Foreclosure Defenses," litigation is about leverage. Through a QWR, a borrower may obtain useful information and build specific defenses to foreclosure. In my experience, too often I have seen “boilerplate" court papers filed on behalf of borrowers. These papers essentially try to throw in everything but the kitchen sink and hope something sticks. The papers are usually not tailored to a borrower’s specific situation, but are often derived from forms circulating around the Internet.
The best foreclosure defense is a detailed and specific one. A QWR is an official written letter or notice sent to the servicer by the borrower. It should be titled as a “qualified written request." The QWR must include the borrower’s name and account number, or enough information for the servicer to identify it. The QWR must also include a statement of why the borrower believes the account to be in error, or be specific as to other information the borrower seeks.
Frequently, borrowers will send a QWR to the foreclosure plaintiff’s attorney (usually the plaintiff is the lender or servicer). The federal statute governing QWRs provides that the QWR must be sent to the servicer. There are a few courts who have allowed the QWR to be sent to the servicer’s attorney but it is best to be on the safe side and follow the exact requirements of the statute.
The servicer must acknowledge receipt of the QWR within 20 business days. An exception to this is when the servicer grants the borrower’s requests prior to the 20-day deadline. Within 60 business days of receiving the QWR, the servicer must do one of three things:
Make necessary corrections to any errors in the borrower’s account;
After making an investigation, explain to the borrower why there are no errors in the account; or
After making an investigation, explain to the borrower why the requested information cannot be obtained by the servicer.
In all three situations the servicer must also provide the borrower with a name and telephone number of its representative who can further assist the borrower. For the duration of the 60-day period, the servicer is not permitted to report overdue payments relating to the QWR to any consumer reporting agency.
If a servicer fails to comply with these provisions, it may be liable to the borrower for damages, costs and attorney’s fees. In the case of an individual borrower, the damages are limited to those actually suffered by the borrower as a result of the servicer’s failure. The court may also grant the borrower additional damages not to exceed $1,000.00. If a class action has been filed against the servicer (meaning a lawsuit filed on behalf of numerous persons in the similar situation) the servicer may be liable for attorney’s fees and actual damages of the class as well as additional damages not to exceed $500,000.00 or 1% of the servicer’s net worth, whichever is less.
However, a servicer will not be liable to failing to comply with the above requirements if they took action to correct an error in the borrower’s account within 60 days after discovering it, before a QWR or written notice of the error is filed. The servicer must notify the borrower, make necessary corrections to the account and make sure that unnecessary fees or costs will not be assessed against the borrower.
In practical life, often borrowers will not properly enforce their rights under QWR procedures. I have frequently seen a QWR filed in a case and the borrower never follows up on it. Know your rights and enforce them. Use the following events to your advantage if a servicer fails to send the 20-day acknowledgment, fails to issue the 60-day response, fails to give you a servicer representative’s contact information who can further assist you, makes any unauthorized reports to a credit agency or otherwise fails to comply with the laws.
If you send the QWR to a plaintiff’s attorney instead of the servicer itself, the attorney may file a motion with the court to strike the QWR, meaning the servicer would not have to comply with the requests contained in your notice. Other times, a plaintiff’s attorney may ask the court the strike the QWR because it is too vague and not detailed enough. There is Florida law to support this proposition, where plaintiffs say that the borrowers cannot file a general laundry list of grievances. This goes back to my opening statements that foreclosure defenses must be as specific as possible.
However, you may not know whether certain errors exist and the servicer is in the only position to know. I believe that questions seeking information as to how the plaintiff obtained ownership of the loan and the servicer’s right to manage the loan are fair game, for example, since ownership of the loan is the cornerstone to the plaintiff’s case.
A common theme in foreclosure defense is following up with the servicer or party with authority to give the homeowner relief. For the homeowner, the QWR process is no different. If the borrower properly monitors the status of his or her QWR request, this may go a long way in creating leverage in favor of the borrower.