[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.fight13.com\/misapplication-of-fees#BlogPosting","mainEntityOfPage":"https:\/\/www.fight13.com\/misapplication-of-fees","headline":"Misapplication of Fees","name":"Misapplication of Fees","description":"\u201cA qualified written request asserts an error relating to the servicing of a mortgage loan and is a notice of error for purposes of this section, and a servicer must comply with all requirements applicable to a notice of error with respect to such qualified written request.\u201d\u00a012 C.F.R. \u00a71024.35(a). In...","datePublished":"2017-06-18","dateModified":"2025-09-19","author":{"@type":"Person","@id":"https:\/\/www.fight13.com\/attorneys\/matis-h-abarbanel#Person","name":"Matis Abarbanel","url":"https:\/\/www.fight13.com\/attorneys\/matis-h-abarbanel","identifier":55,"image":{"@type":"ImageObject","@id":"https:\/\/www.fight13.com\/wp-content\/uploads\/2025\/09\/matis-abarbanel_avatar-96x96.png","url":"https:\/\/www.fight13.com\/wp-content\/uploads\/2025\/09\/matis-abarbanel_avatar-96x96.png","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Loan Lawyers, LLC","logo":{"@type":"ImageObject","@id":"https:\/\/www.fight13.com\/wp-content\/uploads\/2020\/03\/icon-logo.png","url":"https:\/\/www.fight13.com\/wp-content\/uploads\/2020\/03\/icon-logo.png","width":600,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/www.fight13.com\/wp-content\/uploads\/2020\/03\/columns_top.jpg","url":"https:\/\/www.fight13.com\/wp-content\/uploads\/2020\/03\/columns_top.jpg","height":515,"width":798},"url":"https:\/\/www.fight13.com\/misapplication-of-fees","about":["Debt Collection Harassment and Abuse (FDCPA)"],"wordCount":1076,"keywords":["fdcpa"],"articleBody":"\u201cA qualified written request asserts an error relating to the servicing of a mortgage loan and is a notice of error for purposes of this section, and a servicer must comply with all requirements applicable to a notice of error with respect to such qualified written request.\u201d\u00a012 C.F.R. \u00a71024.35(a). In the \u201cScope of error resolution\u201d portion of 12 C.F.R. \u00a71024.35(b)(5) for example, the regulation specifically enumerates \u201c[i]mposition of a fee or charge that the servicer lacks a reasonable basis to impose upon the borrower\u201d as a covered error under RESPA.Regarding the servicing error found at 12 C.F.R. \u00a71024.35(b)(2), concerning the failure to correctly apply payments accepted, and the CFPB Final Rules and Official Interpretations of \u00a7 1024.35(b)(2) notes:\u201cProper allocation of payments is also, by definition, servicing, and already subject to the qualified written request procedures set forth in section 6(e) of RESPA and current \u00a7 1024.21(e) of Regulation X.\u201d78 Fed. Reg. 10695, 10740.Regarding the servicing error found at 12 C.F.R. \u00a71024.35(b)(3), concerning the failure to credit a payment to a borrower\u2019s mortgage loan account and the CFPB Final Rules and Official Interpretations of \u00a7 1024.35(b)(3) states:\u201cThe Bureau proposed \u00a7 1024.35(b)(3) to implement, in part, section 6(k)(1)(C) of RESPA with respect to borrower requests to correct errors relating to the allocation of payments for a borrower\u2019s account and other\u00a0standard servicer duties. A failure to credit a payment as of the date of receipt may have implications for the correct application of borrower payments.\u00a0A servicer\u2019s failure to credit a payment promptly\u2026may cause a servicer to misapply other payments received by the borrower.\u00a0Further, a servicer\u2019s failure to credit borrower payments promptly may generate improper late fees and other charges.\u00a0The Bureau further believes that prompt crediting of borrower payments is a standard servicer duty as set forth in section 6(k)(1)(C) of RESPA.\u00a0The Bureau also observes that prompt crediting of borrower payments is, by definition, servicing and, therefore, is subject to the qualified written request procedure set forth in section 6(e) of RESPA.\u201d (Emphasis added).78 Fed. Reg. 10695, 10741.Regarding the servicing error found at 12 C.F.R. \u00a71024.35(b)(5), concerning the imposition of a fees and charges that the servicer lacks a reasonable basis to impose upon the borrower, the CFPB Final Rules and Official Interpretations of \u00a7 1024.35(b)(5) notes that:\u201cProposed \u00a7 1024.35(b)(5) would have included as an error a servicer\u2019s imposition of a fee or charge that the servicer lacks a reasonable basis to impose upon the borrower. The Bureau proposed \u00a7 1024.35(b)(5) to implement, in part, section 6(k)(1)(C) of RESPA with respect to standard servicer duties.\u00a0The Bureau believes that it is a typical servicer duty, both to the borrower and to the servicer\u2019s principal, to ensure that the servicer has a reasonable basis to impose a charge on a borrower.\u201d (Emphasis added).See\u00a078 Fed. Reg. 10695, 10741.The CFPB then goes on to say in that same section of the Federal Register that:\u201cThe Bureau believes that\u00a0servicers should not impose fees on borrowers that are not bona fide\u00a0\u2013 that is, fees that a servicer\u00a0does not have a reasonable basis\u00a0to impose upon a borrower. Examples of non-bona fide charges include such common sense errors as late fees for payments that were not late, default property management fees for borrowers that are not in a delinquency status that would justify the charge,\u00a0charges from service providers for services that were not actually rendered with respect to a borrower\u2019s mortgage loan account, and charges for force-placed insurance in circumstances not permitted by final rule \u00a7 1024.37\u2026Id.Regarding the servicing error found at 12 C.F.R. \u00a71024.35(b)(6), the Bureau provides:The Bureau proposed \u00a7 1024.35(b)(6) to implement, in part, section 6(k)(1)(C) of RESPA with respect to borrower requests to correct errors relating to a final balance for purposes of paying off a mortgage loan\u00a0and standard servicer duties\u2026Servicers already have an obligation to comply with the timing requirements of section 129G of TILA with respect to any mortgage loan that constitutes a \u201chome loan\u201d as used in section 129G of TILA. The Bureau proposed \u00a7 1024.35(b)(6) because it believed, consistent with TILA section 129G, that borrowers require accurate payoff statements to manage their mortgage loan obligations.\u00a0A payoff statement is necessary any time a borrower repays a mortgage loan, and servicers routinely provide payoff statements for borrowers to refinance or pay in full their mortgage loan obligations. However, consumer advocates have indicated that servicers have failed, or refused, to provide payoff statements to certain borrowers or have required borrowers to make a payment on a mortgage loan as a condition of fulfilling the borrower\u2019s request for a payoff statement. Any such conduct has the perverse effect of impeding a borrower\u2019s ability to pay a mortgage loan obligation in full\u2026Final \u00a7 1024.35(b)(6) defines as an error the failure to provide an accurate payoff balance amount upon a borrower\u2019s request in violation of section \u00a7 1026.36(c)(3). Because servicers will already be required to comply with the timeframes set forth in \u00a7 1026.36(c)(3) with respect to certain mortgage loans they service,\u00a0the Bureau does not believe that defining their failure to do so as an error imposes additional burden on servicers. (Emphasis added).See\u00a078 Fed. Reg. 10695, 10742.Congress intended the terms \u201crelating to servicing\u201d to be broad and the applicable subsections of 12 C.F.R. \u00a71024.35(b) clearly enumerates the information borrowers are allowed to request.Click here for more information about the FDCPA.Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems. Contact us to see how we may be able to help you.About the AuthorLatest PostsMatis AbarbanelMatis Abarbanel is the founding partner and senior attorney at Loan Lawyers in South Florida. He focuses his practice on consumer rights, helping homeowners navigate issues such as foreclosure and financial hardship. Matis also brings a wealth of experience from his previous work in personal injury law. As a devout Chasidic Jew, he is committed to making a positive impact in his community and dedicates his efforts to charitable initiatives through his non-profit organization, The Center, which aids at-risk Jewish youth. Matis actively serves clients across South Florida and is passionate about empowering individuals to secure their rights and achieve a better future.When Foreclosure Errors by Lenders Lead to Legal Remedies for Homeowners in Fort LauderdaleWhat Homeowners Can Do When Loan Documents Contain Forged or Altered SignaturesUnderstanding Florida\u2019s Debt Forgiveness Programs and IRS Rules"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Misapplication of Fees","item":"https:\/\/www.fight13.com\/misapplication-of-fees#breadcrumbitem"}]}]