The homeowners beat the bank in the first round of RESPA/FDCPA litigation, upholding the private right of action under Reg. X.
The case is Rios v. Rushmore, from the Southern District of Florida.
The homeowners alleged that Rushmore Loan Management Services failed to adequately respond to their Notice of Error pursuant to 12 U.S.C. 2605(k)(1)(C)..
They sought explanations for fees and charges, apparently added to their loan during a trial modification period; they asked for receipts and other support for the charges.
The servicer apparently wrote back to the effect, we’re right, you’re wrong.
Judge Marra said, not so fast. Homeowners have adequately pled a violation of the statute and declined to accept the servicer’s bald pronouncement that their action had been proper.
Why Rios gladdens my heart
Homeowner vs. Servicer has seemed like David and Goliath for so long. A home is a family’s largest asset and their largest debt, and they have too often been at the mercy of the bank and its minions when it comes to visibility into the loan balance.
The Dodd Frank additions to RESPA providing for enforceable Requests for Information and Notices of Error are godsends for borrowers.
But the tools of RESPA are only useful if lawyers have them in their tool box, and judges keep the cutting edges sharp.
CFPB provides a template for a Request for Information; NCLC has list of tips for using it.
