Pursuant to Section 2605(f) of the Real Estate Settlement Procedures Act,
individuals have a private right of action against loan servicers for
violations of Section 2605. A loan servicer that is in violation of Section
2605 is liable to that individual in “an amount equal to the sum
of – (A) any actual damages to the borrower as a result of the failure;
and (B) any additional damages, as the court may allow, in the case of
a pattern or practice of noncompliance with the requirements of this section,
in an amount not to exceed $2,000.”
12 U.S.C. § 2605(f)(1).
Case law is sparse regarding what the term “pattern or practice of
noncompliance” means. In
Almquist v. Nationstar Mortg., LLC., 14-81178-CIV-RYSKAMP/HOPKINS (S.D. Fla. 2014), Judge Ryskamp found that
two (2) violations were sufficient allege a pattern or practice of noncompliance.
McLean v. GMAC Mortg. Corp., 595 F.Supp.2d 1360 (S.D. Fla. 2009), Magistrate Judge O’Sullivan
held that two (2) violations were insufficient to allege a pattern or
practice of noncompliance. There is clearly a split of authority.
Some courts have interpreted the term “pattern or practice”
to mean a “standard or routine way of operating.”
See McLean v. GMAC Mortg. Corp., 595 F.Supp.2d 1360, 1366 (S.D. Fla 2009);
In re Maxwell, 281 B.R. 101 (D. Mass. 2002). But even this definition is vague. Very
few courts have delved into the actual meaning behind the term. Does it
mean a “pattern or practice” of noncompliance specific to
an individual borrower or does it reflect more of a widespread way of
operating? It remains to be seen what courts are truly looking for in
order to award an individual statutory damages under RESPA.