Federal law requires servicers to evaluate complete modification applications within 30 days. No response? They've violated RESPA, opening them up to damages and regulatory action.
30 Days
Evaluation Deadline
12 CFR 1024.41
Federal Regulation
Actual Damages
Private Right
Attorney Fees
If You Prevail
RESPA Loss Mitigation Requirements
The Real Estate Settlement Procedures Act (RESPA), through Regulation X at 12 CFR 1024.41, imposes strict requirements on mortgage servicers when you apply for loss mitigation (modification, forbearance, repayment plans, etc.).
5 Days: Acknowledge Receipt
Servicer must send written acknowledgment within 5 business days of receiving any loss mitigation application.
5 Days: List Missing Docs
If incomplete, must identify ALL missing documents within 5 business days. Can't dribble requests.
30 Days: Evaluate Application
Must evaluate complete application for ALL available options within 30 days and send written decision.
No Foreclosure Sale
Cannot conduct sale while complete application pending if submitted 37+ days before scheduled sale.
The 30-Day Evaluation Rule
Under 12 CFR 1024.41(c)(1), once your application is complete, the servicer must:
Evaluate for ALL options - Not just modification, but forbearance, repayment plans, short sale, deed-in-lieu
Send written determination - Within 30 days, stating approval, denial, or alternative offer
Explain denial reasons - Specific, actionable reasons for any denial
Describe appeal rights - How to appeal and the deadline
The 37-Day Rule
RESPA's foreclosure protection only applies if you submit a complete application more than 37 days before the scheduled sale. Submit early—don't wait until the last minute.
California HBOR Adds More Protection
California's Homeowner Bill of Rights (HBOR) provides additional protections with potentially larger damages. Use both federal RESPA and state HBOR claims together for maximum leverage.
RESPA Deadline Enforcement Letter
Send this when 30 days have passed since your complete application was acknowledged and you've received no decision:
[Your Name]
[Your Address]
[City, State ZIP]
[Date]
Via Certified Mail, Return Receipt Requested
[Servicer Name]
Loss Mitigation Department
[Servicer Address]
[City, State ZIP]
Re: Notice of RESPA Violation—Failure to Evaluate Within 30 Days
12 CFR 1024.41(c)(1)
Loan Number: [LOAN NUMBER]
Property: [PROPERTY ADDRESS]
Dear Loss Mitigation Department:
I am writing to notify you that you are in VIOLATION of the Real Estate Settlement Procedures Act (RESPA), specifically 12 CFR 1024.41(c)(1), which requires servicers to evaluate complete loss mitigation applications within 30 days.
TIMELINE OF YOUR VIOLATION:
1. On [DATE], I submitted a complete loss mitigation application.
2. On [DATE], you acknowledged my application as COMPLETE. [OR: You failed to identify any missing documents within the required 5 business days, making my application complete by operation of law.]
3. The 30-day evaluation period expired on [DATE—30 days after completeness].
4. As of today, [TODAY'S DATE], I have received NO written determination regarding my application—a period of [X] days.
YOUR LEGAL OBLIGATIONS:
Under 12 CFR 1024.41(c)(1), you were required to:
• Evaluate my application for all loss mitigation options available
• Send written notice of approval, denial, or alternative offer
• If denying, provide specific reasons and appeal instructions
You have done NONE of this.
DEMANDS:
1. Provide a written determination on my loss mitigation application within 5 BUSINESS DAYS.
2. If denying any option, provide specific reasons and appeal instructions per 12 CFR 1024.41(c)(1)(ii).
3. Confirm that no foreclosure activity will occur while my application remains pending.
CONSEQUENCES OF CONTINUED VIOLATION:
Under 12 CFR 1024.41(a), borrowers have a private right of action for RESPA violations. I am entitled to:
• Actual damages suffered due to your delay
• Statutory damages up to $2,000 for pattern/practice violations
• Attorney's fees and costs
Additionally, I will file complaints with:
• Consumer Financial Protection Bureau (CFPB)
• California Department of Financial Protection and Innovation (DFPI)
Your pattern of delay may also support a claim for unfair business practices under California Business & Professions Code § 17200.
I expect your written response within 5 BUSINESS DAYS. Continued silence will be treated as evidence of bad faith in any subsequent litigation.
Sincerely,
[Your Signature]
[Your Printed Name]
[Phone Number]
[Email Address]
Enclosures:
- Copy of complete application acknowledgment
- Timeline documentation
- All prior correspondence
cc: CFPB
California DFPI
Damages for RESPA Violations
Under 12 CFR 1024.41(a) and 12 USC 2605(f), you can recover:
Actual Damages
Additional interest accrued during delay
Late fees improperly assessed
Costs of repeated submissions and correspondence
Emotional distress (in some circuits)
Lost opportunity costs
Statutory Damages
Up to $2,000 for pattern or practice violations
Class actions can recover up to $1 million or 1% of net worth
Attorney's Fees
Prevailing borrowers recover reasonable attorney's fees and costs. This makes it economical for attorneys to take these cases on contingency.
California HBOR Damages Are Larger
HBOR provides for $50,000+ statutory damages after wrongful sale. For maximum recovery, combine RESPA and HBOR claims in the same action.
FAQ
RESPA is federal law that applies nationwide; HBOR is California state law. Key differences:
RESPA: 30-day evaluation deadline, $2,000 max statutory damages, applies to federally-related mortgages
HBOR: Similar protections, $50,000+ statutory damages after wrongful sale, broader coverage
Use both—they're not mutually exclusive and you can plead both in the same lawsuit.
Yes, though damages may be limited. You can still recover:
Extra interest that accrued during delay
Late fees charged during the period
Emotional distress from the uncertainty
Statutory damages for pattern/practice violations
The violation occurred regardless of the eventual outcome.
This is their main defense. Counter it by showing:
They failed to request additional documents within 5 days (automatic completeness)
They sent a completeness acknowledgment letter
They evaluated and denied (can't deny incomplete applications)
You have proof of every document submitted with delivery confirmation
Both, in this order:
Send demand letter first - Give them a chance to cure
File CFPB complaint - Creates a record, servicers must respond within 15 days
Consult attorney about lawsuit - If CFPB doesn't resolve it, litigation may be worthwhile
CFPB complaints alone often produce results because servicers fear regulatory scrutiny.
I handle RESPA and HBOR violation cases from demand letters through federal court. If they're stalling on your modification, I can force a decision and recover damages.