Medrano, et al v. Flagstar Bank, FSB, et al, No. 11-55412 (9th Cir. 2012)Annotate this Case
Plaintiffs alleged that defendant, the servicer of their home loan, violated the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605, because it did not respond adequately to three letters in which they challenged the monthly payment due on their loan. The district court granted defendant's motion to dismiss the claim because a servicer must receive a valid "qualified written request" to incur the duty to respond under section 2605, and it determined that the letters were not qualified written requests that triggered the statutory duty. Because plaintiffs' letters to defendant challenged the terms of their loans and requested modification of various loan and mortgage documents, they were not qualified written requests relating to the servicing of plaintiffs' loan. Because section 2605 did not require a servicer to respond to such requests, the district court correctly dismissed plaintiffs' claim and the court affirmed the judgment.
Court Description: Real Estate Settlement Procedures Act. The panel affirmed the dismissal of a claim under the Real Estate Settlement Procedures Act by borrowers seeking damages for a mortgage-loan servicer’s failure to respond to their inquiries. Adopting the Seventh Circuit’s general approach, the panel held that the borrowers’ letters challenging the monthly payment due on their loan were not “qualified written requests” triggering the servicer’s duty to respond under 12 U.S.C. § 2605 because the letters did not seek information relating to the servicing of the loan, but rather challenged the loan’s terms.