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Truth in Lending: 9.10.3.1 Covered Transactions

The duty to respond to requests to identify the owner or master servicer of the obligation applies to any consumer obligation arising from a consumer credit transaction.1230 By its terms, TILA does not limit this duty to consumer credit transactions secured by real property. It applies to any secured and unsecured consumer credit transaction.

Truth in Lending: 9.10.3.2 Servicer Obligations

TILA requires servicers1232 to give borrowers, upon request, “the name, address, and telephone number of the owner1233 of the obligation or the master servicer of the obligation.”1234 Where the consumer asserts that the entity identified did not in fact own the loan, the court may allow a claim to proceed under section 1681(f)(2).1235

Truth in Lending: 9.10.3.4 Statute of Limitations

As discussed in § 12.2, infra, the general statute of limitations for TILA violations is one year, calculated beginning the day after the violation occurs. If a servicer provides a facially inadequate response, that likely triggers the running of the statute of limitations.1252

Truth in Lending: 9.10.3.5 Litigation and Remedies

Given the somewhat liberal pleading requirements applicable in federal courts, the borrower should avoid an early dismissal by alleging that: (1) the plaintiff is the borrower; (2) the defendant is the servicer; (3) the borrower provided the servicer with a written request seeking the specific information mentioned in section 1641(f); (4) the defendant failed or refused or inadequately identified the owner of the obligation.1255

Truth in Lending: 9.10.4.3 Timing of Periodic Statements

The periodic statements are to be delivered monthly, within a reasonable time after when the payment becomes due or at the end of the grace period for the previous payment period.1281 Four days is presumptively a reasonable time after the end of the grace period.1282 If the payment period is shorter than a month, the servicer may, but need not, aggregate the payment statements for a month and provide them together.1283

Truth in Lending: 9.10.4.4 Form of Periodic Statements

Information about the amount due must be grouped together, as must the explanation of the amount due, information about past payments, and any delinquency information.1284 The amount due must be on the top of the first page.1285 The dollar amount due must be more prominent than other information on the page.1286 The explanation of the amount due, past payment information, contact information, and, if applicable, delinquency information,

Truth in Lending: 9.10.4.5 Remedies

Because the provision requiring periodic statements is contained in section 1638(f), statutory damages are not recoverable.1292 Nonetheless, actual damages, attorney fees, and costs may be available.1293 Advocates should be careful to plead and prove the ways the consumer was harmed by not receiving periodic statements.1294 The issue regarding which party or parties (servicer, creditor, or assignee) is liable for these violations is add

Truth in Lending: 9.10.4.6 Electronic Delivery of Periodic Statements

Periodic statements may be given electronically, with consumer consent.1299 Consumer consent is presumed if the consumer receives electronic disclosures for any account with the servicer, including checking or savings accounts.1300 The electronic periodic statements need not be e-mailed to homeowners: instead, the creditor, assignee, or servicer may e-mail them a notification with a link.1301 The homeowner can opt out of receiving those

Truth in Lending: 9.10.5.1 Overview

The Truth in Lending Act also has rules governing the provision of payoff statements to a borrower. This issue is discussed in more detail in NCLC’s Mortgage Servicing and Loan Modifications.1303

Truth in Lending: 9.10.5.2.2 Form of request

The request for a payoff statement must be made in writing.1322 The written request for a payoff statement may be sent by a person acting on behalf of the consumer, including a creditor seeking to refinance the loan, an attorney, or a housing counselor.1323

The servicer can specify where and how to submit the payoff request, such as via mail or by fax. These requirements must be “reasonable.”1324

Truth in Lending: 9.10.5.2.3 What is a reasonable time?

In general, the payoff statement must be provided within seven days.1325 The seven-day period runs from when the servicer receives the request, in the form and manner specified by the servicer.1326 If the servicer must verify the identity of the person acting on behalf of the consumer, the time runs from when the servicer has verified the identity and authority of such a person.1327

Truth in Lending: 9.10.5.3.3 Fees prohibited for high-cost mortgages

Fees for providing a payoff statement for a high-cost mortgage are generally prohibited, with two exceptions.1341 If the payoff statement is provided by fax or courier, a fee may be charged.1342 In that case, the fee must be comparable to that charged in non-high-cost mortgage transactions,1343 and the servicer must disclose that payoff statements are available for free via another method.1344

Truth in Lending: 9.10.7.1 Overview

In the case of residential mortgages, the creditor’s policy on the acceptance of partial payments must be disclosed both before closing, with the other residential mortgage disclosures, and at any subsequent point in time when there is a “new creditor” (presumably by accepting assignment of the obligation from the existing holder or by purchasing the loan).1375

Truth in Lending: 9.10.7.2 Person Subject to the Notice Requirement

Regarding the partial payment disclosure upon transfer of the loan, the person required to provide this information is the person that becomes the owner of an existing mortgage loan by acquiring legal title to the debt obligation through purchase, assignment, or other transfer.1377 A servicer that holds title solely for the administrative convenience of the servicer in servicing the obligation is not the owner for purposes of providing the partial payment notice.1378 The rules addressing

Truth in Lending: 9.10.7.3 Content

The covered person must disclose its policy by stating that it (i.e., the “lender,” using that word) accepts periodic payments that are less than the full payment or it does not.1381 If it accepts partial payments but does not apply them to the consumer’s loan until the remainder of the full amount is due, the lender must inform the consumer that it will hold partial payments in a separate account until the remainder is paid.1382 At that point, the lender must apply the full payment to t

Truth in Lending: 9.10.7.5 Remedies

Violations of these rules trigger actual and statutory damages, attorney fees, and costs because the partial payment provision appears in section 1639c, so is a “requirement imposed under this part,” that is, part B of TILA.1389 Since the disclosure requirements apply to assignees, as owners of the debt obligation, the question may arise as to whether section 1640(a) creates liability for the assignee’s own failure to comply (as opposed to being derivatively liable for disclosure violations of the original creditor).