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QWR-Qualified Written Request pursuant to RESPA section 6


Why you need to write a QWR to your Mortgage Lender


My name is Jeff Greenberg, I am a forensic mortgage auditor and also a realtor. I have assisted many homeowners with their mortgage issues. I work out of a bankruptcy law firm in

Warrenton, Virginia and have references. Attorneys trust me with their clients mortgage issues.


If you are behind on your mortgage or even if you are considering going behind or think you will be forced to go behind on your mortgage, no matter what the cause you need to send a QWR to your lender. If there is any probability that you will be requesting a short sale or a mortgage modification or if there is any reason you have to believe that you might be foreclosed upon your best first action is a QWR. If you think your lender overcharged you on your HUD 1, or is calculating your monthly payment incorrectly; or, if you think your mortgage broker mistreated you by charging too many points or unearned fees; IF you are in ANY TYPE OF SUBPRIME LOAN, you need to send in a QWR.


What is a QWR?


A qualified written request is a legally crafted letter written pursuant to Section 6 of the Real Estate Settlement Procedures act of 1974 to your lender requesting that an issue related to a real estate based loan or a mortgage be cured -AND- that the lender send you documents related to such loan be forwarded to you. The QWR does two things for the homeowner. First is sets off 2 timers. The bank MUST acknowledge the receipt of the QWR with 20 days of its receipt. Secondly, the bank must resolve the issue within 60 days. The bank is PREVENTED BY LAW from reporting the homeowner as late on payments during this 60 day period and most of the banks continue to halt late credit reporting after this 60 day period. Further, the lender MUST forward with their answer to your QWR a phone number and name of an individual employee of the bank who is assigned to handle your issue. This is a much better situation than being one of the sheep that call in on the customer service number.


The QWR should be sent certified, return receipt requested to an officer of or to the general counsel of the bank. The banks are well aware that the a forensic audit is what typically follows a QWR and that 90% on non-conventional loans contain defects. Finding these defects in your mortgage IS THE DIFFERENCE between your lender having the upper hand or you having the upper hand in ANY negotiation whether for a modification or a short sale. If, for example you find that the finance charge on your final TILA disclosure was understated by more than $35.00 you have a serious violation of RESPA and a potential rescission action against your lender. This is leverage friends. If you find that you never received your federally mandated booklets on Adjustable rate notes or if you never received two (2) COPIES of your right to cancel the transaction, again you have a rescissionable violation of RESPA and leverage on your lender. If you think your lender used its own affiliated appraisal company without disclosing it to you or if you were not given a GFE (good faith estimate) within three days of submitting your written loan application, or worse yet, if you didnt get your GFE until the closing date of your loan. YOU HAVE LEVERAGE.


The documents that are sent to you by your lender pursuant to your QWR are everything they have related to your loan, thus everything they could possibly use to defend a rescission or some other relief you might seek. No matter what your circumstance is your situation is markedly improved by sending a qualified written request to your bank. Once you have all of your documents we are happy to give you a free ½ hour consultation to do a quick review of your documents in order to determine if there are violations that would merit a full Forensic Audit.


Click on this link to download a free copy of the QWR we recommend sending out to your lender.


Download Sample QWR


Here is Wiki's description of RESPA and the Qualified Written Request :



The Real Estate Settlement Procedures Act, (known as "RESPA"), was an Act passed by the United States Congress in 1974. It is codified at Title 12, Chapter 27 of the United States Code, 12 U.S.C. § 2601–2617.

Purpose

It was created because various companies associated with the buying and selling of real estate, such as lenders, realtors, construction companies and title insurance companies were often engaging in providing undisclosed Kickbacks to each other, inflating the costs of real estate transactions and obscuring price competition by facilitating bait-and-switch tactics.

For example, a lender advertising a home loan might have advertised the loan with a 5% interest rate, but then when one applies for the loan one is told that one must use the lender's affiliated title insurance company and pay $5,000 for the service (whereas the normal rate is $1,000). The title company would then have paid $4,000 to the lender. This was made illegal. The reason is to make prices for the services clear so as to allow price competition by consumer demand and to thereby drive down prices.

 

Restrictions

The Act prohibits kickbacks between lenders and third-party settlement service agents in the real estate settlement process (Section 8 of RESPA). Even reciprocal referrals among these types of professions could be construed in court as a violation of the law of RESPA. It requires lenders to provide a good faith estimate for all the approximate costs of a particular loan and finally a HUD-1 (for purchase real estate loans) or a HUD-1A (for refinances of real estate loans) at the closing of the real estate loan. The final HUD-1 or HUD-1A allows the borrower to know specifically the costs of the loan and to whom the fees are being allotted.

 

Account Inquiries

If the borrower believes there is an error in the mortgage account, he or she can make a "qualified written request" to the loan servicer. The request must be in writing, identify the borrower by name and account, and include a statement of reasons why the borrower believes the account is in error. The request should include the words "qualified written request". It cannot be written on the payment coupon, but must be on a separate piece of paper. The Department of Housing and Urban Development provides a sample letter. [1]

The servicer must acknowledge receipt of the request within 20 business days. The servicer then has 60 business days (from the request) to take action on the request. The servicer has to either provide a written notification that the error has been corrected, or provide a written explanation as to why the servicer believes the account is correct. Either way, the servicer has to provide the name and telephone number of a person with whom the borrower can discuss the matter. The servicer cannot provide information to any credit agency regarding any overdue payment during the 60 day period.

If the servicer fails to comply with the "qualified written request", the borrower is entitled to actual damages, up to $1000 of additional damages if there is a pattern of noncompliance, costs and attorneys fees.

However, critics say that kickbacks still occur. For example, lenders often provide captive insurance to the title insurance companies they work with, which critics say is essentially a kickback mechanism. Others counter that economically the transaction is a zero sum game, where if the kickback were forbidden, a lender would simply charge higher prices. One of the core elements of the debate is the fact that customers overwhelmingly go with the default service providers associated with a lender or a realtor, even though they sign documents explicitly stating that they can choose to use any service provider. Some say that if the profits of the service providers were truly excessive or if the price of the services were excessively inflated because of illegal or quasi-legal kickbacks, then at some point non-affiliated service providers would attempt to target consumers directly with lower prices to entice them to choose the unaffiliated provider.

There have been various proposals to modify the Real Estate Settlement Procedures Act. One proposal is to change the "open architecture" system currently in place, where a customer can choose to use any service provider for each service, to one where the services are bundled, but where the realtor or lender must pay directly for all other costs. Under this system, lenders, who have more buying power, would more aggressively seek the lowest price for real estate settlement services.





Disclosure: this document is not meant to contain legal advice, it is meant to be informative in nature. please have your attorney review anything you decide to do related to issues of law.

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