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Regulations X and Z Impose Stricter Rules for Mortgage Loan Servicers


It has been two years since the Consumer Finance Protection Bureau (CFPB) enacted amendments to Regulation X of the Real Estate Settlement Protection Act (RESPA) and Regulation Z of the Truth in Lending Act (TILA). Since then, consumers have been afforded greater protection against mortgage loan servicers who fail in their duty to provide homeowners with information, apply their payments in a timely manner, calculate escrow correctly, and more. Consumers now have a private right of action against lenders who do not abide by these regulations.

Consumers may have a claim under RESPA if they have experienced any of the following:

  • Their mortgage loan servicer failed to make a decision about a short sale within 30 days
  • Their servicer moved to foreclose before the homeowner had been delinquent in payments for more than 120 days
  • Their servicer moved to foreclose after the homeowner submitted a loan modification application
  • Their servicer failed to honor an agreed upon loan modification
  • Their servicer charged them for unnecessary appraisals, inspections, legal fees, etc.
  • Their servicer improperly calculated escrow

Consumers may be able to take action under TILA for the following instances of loan servicer misconduct:

  • The mortgage servicer applies payments to fees or corporate advances prior to bringing insurance and principal interest taxes up to date
  • The servicer fails to apply payments in a timely manner (i.e. on the day they receive them)
  • The servicer fails to send the homeowner any statements, or sends statements that fail to provide all of the correct information to the borrower

These amendments were created to safeguard the rights of the consumer. If you suspect that your mortgage loan servicer’s actions are prohibited by Regulation X or Z, the time is now to consult with a consumer lawyer at Atlas Consumer Law Our top-rated Chicago consumer attorneys are prepared to advise you on your options for holding your mortgage servicer accountable for their misconduct. With your home potentially on the line, the time to act is now.

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Schedule a free case evaluation with our experienced loan modification attorneys at Atlas Consumer Law today by calling (312) 313-1613.