2nd Circuit Affirms Dismissal of RESPA QWR Claim for Failure to Allege Recoverable Damages

The U.S Court of Appeals for the Second Circuit has affirmed the dismissal of a RESPA claim alleging failure to respond to two qualified written requests (QWRs), holding that fees and interest from a mortgage modification, attorneys’ fees, and de minimis postage charges are not sufficient to allege actual damages under RESPA Section 6 (12 U.S.C. § 2605).

As background, the plaintiff-borrower allegedly sent two QWRs to the defendants, the mortgage servicer and master servicer of her residential mortgage loan, but purportedly did not receive any response from either.  The borrower then sued the servicers under RESPA Section 6 for actual damages arising from their alleged failures to respond to her QWRs.  The plaintiff sought damages for allegedly improper fees and interest in excess of $70,277.15 (which resulted from a modification), $225 in legal fees for preparing the second QWR, and $3.20 in postage for mailing this QWR.  The district court dismissed the complaint in its entirety.

The Second Circuit affirmed.  The court held that the allegedly improper fees and interest were not recoverable under RESPA Section 6 because they resulted from a mortgage modification, not mortgage servicing activities.  Because RESPA Section 6 provides for attorneys’ fees in addition to actual damages, the court also held that attorneys’ fees cannot also constitute actual damages under that Section.  Finally, the court held that the de minimis doctrine (which generally prevents plaintiffs from obtaining de minimis damages awards) precluded recovery of the $3.20 for postage.