10 Pa. Code § 59.7 - Error resolution procedures
(a)
Notice of error. A servicer shall comply with the requirements
of this section for any written notice from the borrower that asserts an error
and that includes the name of the borrower, information that enables the
servicer to identify the borrower's mortgage loan account, and the error the
borrower believes has occurred. A notice on a payment coupon or other payment
form supplied by the servicer need not be treated by the servicer as a notice
of error. A qualified written request that asserts an error relating to the
servicing of a mortgage loan is a notice of error for purposes of this section,
and a servicer must comply with all requirements applicable to a notice of
error with respect to such qualified written request.
(b)
Scope of error resolution.
For purposes of this section, the term "error" refers to the
following categories of covered errors:
(1)
Failure to accept a payment that conforms to the servicer's written
requirements for the borrower to follow in making payments.
(2) Failure to apply an accepted payment to
principal, interest, escrow, or other charges under the terms of the mortgage
loan and applicable law.
(3)
Failure to credit a payment to a borrower's mortgage loan account as of the
date of receipt in violation of
12 CFR
1026.36(c)(1) (relating to
prohibited acts or practices and certain requirements for credit secured by a
dwelling).
(4) Failure to pay
taxes, insurance premiums, or other charges, including charges that the
borrower and servicer have voluntarily agreed that the servicer should collect
and pay, in a timely manner as required by §
59.6(a) (relating
to timely escrow payments and treatment of escrow account balances), or to
refund an escrow account balance as required by § 59.6(b).
(5) Imposition of a fee or charge that the
servicer lacks a reasonable basis to impose upon the borrower.
(6) Failure to provide an accurate payoff
balance amount upon a borrower's request in violation of
12 CFR
1026.36(c)(3).
(7) Failure to provide accurate information
to a borrower regarding loss mitigation options and foreclosure, as required by
§
59.11 (relating to early
intervention requirements for certain borrowers).
(8) Failure to transfer accurately and timely
information relating to the servicing of a borrower's mortgage loan account to
a transferee servicer.
(9) Making
the first notice or filing required by applicable law for any judicial or
non-judicial foreclosure process in violation of §
59.13(f) or (j)
(relating to loss mitigation procedures).
(10) Moving for foreclosure judgment or order
of sale, or conducting a foreclosure sale in violation of § 59.13(g) or
(j).
(11) Any other error relating
to the servicing of a borrower's mortgage loan.
(c)
Contact information for borrowers
to assert errors. A servicer may, by written notice provided to a
borrower, establish an address that a borrower must use to submit a notice of
error in accordance with the procedures in this section. The notice shall
include a statement that the borrower must use the established address to
assert an error. If a servicer designates a specific address for receiving
notices of error, the servicer shall designate the same address for receiving
information requests pursuant to §
59.8(b) (relating
to requests for information). A servicer shall provide a written notice to a
borrower before any change in the address used for receiving a notice of error.
A servicer that designates an address for receipt of notices of error must post
the designated address on any Web site maintained by the servicer if the Web
site lists any contact address for the servicer.
(d)
Acknowledgment of receipt.
Within five days (excluding legal public holidays, Saturdays, and
Sundays) of a servicer receiving a notice of error from a borrower, the
servicer shall provide to the borrower a written response acknowledging receipt
of the notice of error.
(e)
Response to notice of error.
(1)
Investigation and response
requirements.
(i)
In
general. Except as provided in paragraphs (f) and (g) of this
section, a servicer must respond to a notice of error by either:
(A) Correcting the error or errors identified
by the borrower and providing the borrower with a written notification of the
correction, the effective date of the correction, and contact information,
including a telephone number, for further assistance; or
(B) Conducting a reasonable investigation and
providing the borrower with a written notification that includes a statement
that the servicer has determined that no error occurred, a statement of the
reason or reasons for this determination, a statement of the borrower's right
to request documents relied upon by the servicer in reaching its determination,
information regarding how the borrower can request such documents, and contact
information, including a telephone number, for further assistance.
(ii)
Different or
additional error. If during a reasonable investigation of a notice of
error, a servicer concludes that errors occurred other than, or in addition to,
the error or errors alleged by the borrower, the servicer shall correct all
such additional errors and provide the borrower with a written notification
that describes the errors the servicer identified, the action taken to correct
the errors, the effective date of the correction, and contact information,
including a telephone number, for further assistance.
(2)
Requesting information from
borrower. A servicer may request supporting documentation from a
borrower in connection with the investigation of an asserted error, but may
not:
(i) Require a borrower to provide such
information as a condition of investigating an asserted error; or
(ii) Determine that no error occurred because
the borrower failed to provide any requested information without conducting a
reasonable investigation pursuant to paragraph (e)(1)(i)(B) of this
section.
(3)
Time
limits.
(i)
In
general. A servicer must comply with the requirements of paragraph
(e)(1) of this section:
(A) Not later than
seven days (excluding legal public holidays, Saturdays, and Sundays) after the
servicer receives the notice of error for errors asserted under paragraph
(b)(6) of this section.
(B) Prior
to the date of a foreclosure sale or within 30 days (excluding legal public
holidays, Saturdays, and Sundays) after the servicer receives the notice of
error, whichever is earlier, for errors asserted under paragraphs (b)(9) and
(10) of this section.
(C) For all
other asserted errors, not later than 30 days (excluding legal public holidays,
Saturdays, and Sundays) after the servicer receives the applicable notice of
error.
(ii)
Extension of time limit. For asserted errors governed by the
time limit set forth in paragraph (e)(3)(i)(C) of this section, a servicer may
extend the time period for responding by an additional 15 days (excluding legal
public holidays, Saturdays, and Sundays) if, before the end of the 30-day
period, the servicer notifies the borrower of the extension and the reasons for
the extension in writing. A servicer may not extend the time period for
responding to errors asserted under paragraph (b)(6), (9), or (10) of this
section.
(4)
Copies of documentation. A servicer shall provide to the
borrower, at no charge, copies of documents and information relied upon by the
servicer in making its determination that no error occurred within 15 days
(excluding legal public holidays, Saturdays, and Sundays) of receiving the
borrower's request for such documents. A servicer is not required to provide
documents relied upon that constitute confidential, proprietary or privileged
information. If a servicer withholds documents relied upon because it has
determined that such documents constitute confidential, proprietary or
privileged information, the servicer must notify the borrower of its
determination in writing within 15 days (excluding legal public holidays,
Saturdays, and Sundays) of receipt of the borrower's request for such
documents.
(5)
Omissions in
responses to requests for documentation. In its response to a request
for documentation under paragraph (e)(4) of this section, a servicer may omit
location and contact information and personal financial information (other than
information about the terms, status, and payment history of the mortgage loan)
if:
(i) The information pertains to a
potential or confirmed successor in interest who is not the requester;
or
(ii) The requester is a
confirmed successor in interest and the information pertains to any borrower
who is not the requester.
(f)
Alternative compliance.
(1)
Early correction. A
servicer is not required to comply with paragraphs (d) and (e) of this section
if the servicer corrects the error or errors asserted by the borrower and
notifies the borrower of that correction in writing within five days (excluding
legal public holidays, Saturdays, and Sundays) of receiving the notice of
error.
(2)
Error asserted
before foreclosure sale. A servicer is not required to comply with the
requirements of paragraphs (d) and (e) of this section for errors asserted
under paragraph (b)(9) or (10) of this section if the servicer receives the
applicable notice of an error seven or fewer days before a foreclosure sale.
For any such notice of error, a servicer shall make a good faith attempt to
respond to the borrower, orally or in writing, and either correct the error or
state the reason the servicer has determined that no error has
occurred.
(g)
Requirements not applicable.
(1)
In general. A servicer
is not required to comply with the requirements of paragraphs (d), (e), and (i)
of this section if the servicer reasonably determines that any of the following
apply:
(i)
Duplicative notice of
error. The asserted error is substantially the same as an error
previously asserted by the borrower for which the servicer has previously
complied with its obligation to respond pursuant to paragraphs (d) and (e) of
this section, unless the borrower provides new and material information to
support the asserted error. New and material information means information that
was not reviewed by the servicer in connection with investigating a prior
notice of the same error and is reasonably likely to change the servicer's
prior determination about the error.
(ii)
Overbroad notice of error.
The notice of error is overbroad. A notice of error is overbroad if
the servicer cannot reasonably determine from the notice of error the specific
error that the borrower asserts has occurred on a borrower's account. To the
extent a servicer can reasonably identify a valid assertion of an error in a
notice of error that is otherwise overbroad, the servicer shall comply with the
requirements of paragraphs (d), (e) and (i) of this section with respect to
that asserted error.
(iii)
Untimely notice of error. A notice of error is delivered to
the servicer more than one year after:
(A)
Servicing for the mortgage loan that is the subject of the asserted error was
transferred from the servicer receiving the notice of error to a transferee
servicer; or
(B) The mortgage loan
is discharged.
(2)
Notice to borrower. If a
servicer determines that, pursuant to this paragraph (g), the servicer is not
required to comply with the requirements of paragraphs (d), (e), and (i) of
this section, the servicer shall notify the borrower of its determination in
writing not later than five days (excluding legal public holidays, Saturdays,
and Sundays) after making such determination. The notice to the borrower shall
set forth the basis under paragraph (g)(1) of this section upon which the
servicer has made such determination.
(h)
Payment requirements prohibited.
A servicer shall not charge a fee, or require a borrower to make any
payment that may be owed on a borrower's account, as a condition of responding
to a notice of error.
(i)
Effect on servicer remedies.
(1)
Adverse information.
After receipt of a notice of error, a servicer may not, for 60 days, furnish
adverse information to any consumer reporting agency regarding any payment that
is the subject of the notice of error.
(2)
Remedies permitted.
Except as set forth in this section with respect to an assertion of error under
paragraph (b)(9) or (10) of this section, nothing in this section shall limit
or restrict a lender or servicer from pursuing any remedy it has under
applicable law, including initiating foreclosure or proceeding with a
foreclosure sale.
Notes
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