Overview
Compliance Is Not a Back-Office Function
The regulatory framework governing mortgage servicing has grown substantially more complex over the past fifteen years. Servicers and sub-servicers are subject to overlapping federal requirements under RESPA and Regulation X, the FDCPA and Regulation F, TILA and Regulation Z, and a layer of state-specific statutes that, in many jurisdictions, impose requirements that are more stringent than federal law. A compliance failure in loss mitigation review, payment processing, or borrower communication can result in regulatory enforcement, private borrower claims, and litigation that dwarfs the underlying servicing economics.
Nemovi Law Group provides compliance counsel to servicers, sub-servicers, and lenders who require practical legal guidance on building and maintaining servicing operations that withstand regulatory scrutiny and borrower challenges. Our practice is rooted in the creditor side of the default and servicing environment — we understand how the regulatory requirements interact with the operational realities of portfolio management, default servicing, and loss mitigation.
We also assist clients in responding to regulatory inquiries, audit findings, and borrower claims before they escalate into formal enforcement actions or litigation. Early engagement with qualified compliance counsel is consistently less expensive than defending against a fully developed claim.
Services
What We Handle
RESPA / Regulation X Compliance
Loss mitigation procedures, Qualified Written Request response protocols, error resolution and information request procedures, and servicing transfer compliance under 12 C.F.R. Part 1024.
FDCPA / Regulation F Compliance
Debt collection communication policies, validation notice requirements, cease communication compliance, and Regulation F limited content message and electronic communication rules.
Loss Mitigation Compliance
Dual tracking prohibition compliance, loss mitigation application review procedures, appeal rights, and borrower notification requirements under Regulation X Subpart C.
State Servicing Law Compliance
California Homeowner Bill of Rights (HBOR), Nevada foreclosure mediation requirements, and other state-specific servicing statutes applicable to portfolio operations.
Regulatory Inquiry Response
Response to CFPB, state regulatory inquiries, and borrower complaint escalations. Document production, factual narrative development, and legal analysis of claimed violations.
Audit Response & Remediation
Legal support for internal or third-party audit findings, including root cause analysis, remediation planning, and documentation of corrective action.
Servicing Transfer Compliance
RESPA servicing transfer notice compliance, pending loss mitigation continuity obligations, and welcome letter and disclosure requirements under 12 C.F.R. §1024.33.
Policy & Procedure Review
Review and markup of servicer policies and procedures for compliance with applicable federal and state requirements, with particular attention to default servicing and loss mitigation workflows.
Representative Matter Types
The Work We Do
The following represent the types of matters we regularly handle. No client names or confidential information is disclosed.
- —Audit response letter and legal analysis prepared for a mortgage servicer in response to findings by an external auditor regarding QWR response timeliness under Regulation X.
- —Loss mitigation procedure review and update for a sub-servicer transitioning to a new loan management system, including dual tracking compliance and appeal rights documentation.
- —FDCPA compliance review for a servicer's default communication templates, including validation notice language, mini-Miranda placement, and Regulation F electronic delivery procedures.
- —Response to CFPB supervisory examination finding regarding a servicer's escrow administration practices and shortage notification procedures.
- —California HBOR compliance analysis for a servicer adding owner-occupied residential loans to its default servicing portfolio, including single point of contact requirements.
- —Demand letter response and pre-litigation strategy for a servicer facing a borrower claim alleging improper escrow accounting and RESPA violation on a modified loan.
Frequently Asked Questions
Mortgage Servicing Compliance FAQ
What is the difference between RESPA and Regulation X?
RESPA — the Real Estate Settlement Procedures Act — is the federal statute enacted by Congress. Regulation X is the implementing regulation promulgated by the CFPB under RESPA, codified at 12 C.F.R. Part 1024. The substantive servicing requirements — loss mitigation, QWR response, error resolution, payment crediting, and servicing transfer notice — are in Regulation X. When practitioners refer to RESPA compliance in a servicing context, they are almost always referring to Regulation X obligations.
What is dual tracking and why is it a compliance risk?
Dual tracking refers to simultaneously pursuing foreclosure while also processing a borrower's loss mitigation application. Regulation X prohibits a servicer from making the first notice or filing for foreclosure while a complete loss mitigation application is pending, and from moving for foreclosure judgment or order of sale while the application is under review, during an appeal period, or while the borrower is performing under an approved loss mitigation option. Dual tracking violations are among the most commonly alleged RESPA claims in borrower litigation and are a frequent focus of CFPB examination activity.
Does the FDCPA apply to mortgage servicers?
Yes, with important distinctions. The FDCPA applies to "debt collectors" — entities that regularly collect debts owed to others. A servicer that acquires a loan that is already in default at the time of acquisition is typically treated as a debt collector under the FDCPA. A servicer that began servicing a loan while it was current is typically not a debt collector under the FDCPA for that loan, even if it later becomes delinquent. Regulation F, the CFPB's implementing regulation for the FDCPA, adds new requirements for electronic communications and limits the frequency of telephone contact. Many state laws impose FDCPA-equivalent requirements on creditors regardless of the federal definition.
What is a Qualified Written Request and what are a servicer's obligations?
A Qualified Written Request (QWR) is a written request from a borrower (or a borrower's agent) for information relating to the servicing of the loan, or a notice of a claimed error. Under Regulation X, a servicer must acknowledge receipt within 5 business days and provide a substantive response within 30 business days (extendable by 15 days with notice). The response must either correct the error, provide the requested information, or explain why the servicer believes no error occurred. Failure to timely respond to a QWR is a cognizable RESPA violation that can support actual damages and, in some cases, statutory damages.
What are a servicer's obligations when transferring a loan to a new servicer?
Transferring servicers must provide a goodbye notice at least 15 days before the transfer effective date. Incoming servicers must provide a hello notice within 15 days after the effective date. Both notices must contain specific disclosures including the name and contact information of the new servicer and the effective date of the transfer. Critically, if a borrower has a pending loss mitigation application or an approved loss mitigation option at the time of transfer, the incoming servicer must honor those applications and agreements — and must accept payments under any existing plan. Transfer-related compliance failures are a significant source of borrower claims.
What is the California Homeowner Bill of Rights and does it apply to commercial loans?
The California Homeowner Bill of Rights (HBOR), enacted in 2013 and subsequently amended, imposes requirements on mortgage servicers including dual tracking prohibitions, single point of contact requirements, and restrictions on recording a notice of default while a borrower is pursuing a foreclosure alternative. HBOR applies to first deeds of trust or mortgages on owner-occupied residential real property containing no more than four dwelling units. It does not apply to commercial loans or to residential properties that are not owner-occupied. HBOR violations can support injunctive relief and, in cases of intentional violations, treble damages.