QWR's and NOE's

​In the intricate and often daunting realm of mortgage servicing, borrowers frequently find themselves confronted with an array of challenges, ranging from deciphering the complexities of loan agreements to addressing discrepancies in their accounts. These challenges, compounded by the potential for errors or misunderstandings during the servicing process, can impact borrowers' financial well-being and peace of mind. Fortunately, to mitigate such issues and uphold standards of transparency and fairness, borrowers have access to two invaluable tools: Qualified Written Requests (QWRs) and Notices of Error (NOEs).
 
QWRs and NOEs stand as formal methods of communication between borrowers and mortgage servicers, offering avenues for borrowers to articulate concerns, seek resolution, and obtain critical information regarding the management of their mortgage loans. At the core of this framework is the Qualified Written Request, a mechanism governed by the Real Estate Settlement Procedures Act (RESPA). Through a QWR, borrowers can detail what they believe are errors or discrepancies related to their loan servicing. Whether it entails disputing inaccuracies in loan balances, questioning the legitimacy of imposed fees, or seeking clarification on the handling of escrow accounts, a QWR empowers borrowers with the means to address a broad spectrum of issues affecting their mortgage arrangements. The QWR can also be used as a request for information.
 
Complementing the QWR is the Notice of Error, a counterpart regulated under the Consumer Financial Protection Bureau's (CFPB) Mortgage Servicing Rules. NOEs are specifically tailored to target errors in the servicing of the loan, affording borrowers an avenue to rectify issues such as misapplied payments, erroneous assessment of charges, or mishandling of escrow funds. Through the NOE mechanism, borrowers can assert their rights and compel servicers to remedy inaccuracies or deficiencies in the management of their mortgage accounts.
 
The process of initiating a QWR or NOE begins with the borrower submitting a formal written communication to their mortgage servicer. The best practice would be to send the letter via certified mail, thereby ensuring the verifiable delivery of their request. Upon receiving the communication, the servicer is required to acknowledge its receipt within five business days. This acknowledgment marks the commencement of an investigative process, during which the servicer is obligated to scrutinize the concerns raised by the borrower and provide a substantive response within a prescribed timeframe.
 
RESPA stipulates that servicers must furnish a comprehensive response to a QWR within 30 business days of receipt. Similarly, NOEs, governed by Regulation X, necessitate a timely response within the same timeframe. However, in instances where the complexity of the issue warrants additional scrutiny, servicers are allowed an extension of up to 15 additional business days, provided they furnish the borrower with a detailed explanation for the delay.

Understanding the intricacies of the response timeline is paramount for borrowers seeking redress. Any lapses or delays in adhering to the prescribed timeframe may be considered violations of regulatory requirements, potentially exposing servicers to repercussions.
 
Effective use of QWRs and NOEs empowers borrowers to advocate for their rights, rectify errors, and foster transparency and accountability within the mortgage servicing landscape. By stating their concerns clearly and adhering to established procedures, borrowers can navigate the complexities of mortgage servicing with confidence.
 
In summation, Qualified Written Requests and Notices of Error serve as indispensable instruments for borrowers to engage with their mortgage servicers and address issues pertinent to loan servicing. Through these channels of communication, borrowers can safeguard their financial interests, rectify inaccuracies, and uphold standards of fairness and integrity in the management of their mortgage accounts.
 
Matthew Mrozek, Research Assistant at JD Koontz, LLC, contributed to this blog post.