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This subject is courtesy of Lexology author Richard Payne and Maurice Wutscher LLP.
Essentially, to recover with respect to alleged RESPA violations concerning qualified written requests (QWRs) under 12 U.S.C. § 2605(e), it is insufficient for the plaintiff borrower to show that the defendant mortgage servicer/lender failed to properly respond to the borrower’s QWR without a causal connection to the alleged damages. But how is this determined?
In this case, the Seventh Circuit applied a two-prong test.
First, the borrower must have standing to bring the claim where “[t]he plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016); then clarified that the injury be concrete and not a “bare procedural violation divorced from any concrete harm.” Spokeo, 136 S. Ct. 1540.
Second, assuming that damages do exist, then there must be a causal connection between the servicer/lender’s failure to properly respond to the QWR and the damages claimed: “[a]lleging injury for purposes of standing is not the same as submitting adequate evidence of injury under the statute to survive a motion for summary judgment,” and “[w]hether the allegations are sufficient to overcome a motion for summary judgment is a different matter entirely.” Diedrich v. Ocwen Loan Servicing, LLC Court of Appeals, 7th Circuit, 2016.
In sum, it would appear that bare technical violations of failing to properly respond to a QWR will not in themselves provide standing and relief without some causal connection to the damages alleged. But, the story doesn’t end there. Causal connection can be a very gray and ultimately a question of fact which would better allow the plaintiff borrower to survive a defendant servicer/lender’s motion for summary judgment.
Note: The views expressed are solely the opinion of the author.
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