District Court holds that the reasonable diligence requirement of 12 CFR § 1024.41(b)(1) does not apply to approved loss mitigation applications
Represented servicer in affirmative lawsuit filed by the borrower for alleged violations of RESPA under Regulation X. District Court awarded summary judgment to the servicer as to whether servicer complied with the reasonable diligence requirement under 12 CFR § 1024.41(b)(1). Specifically, the District Court held that a servicer is not required to meet the reasonable diligence requirement under 12 CFR § 1024.41(b)(1) after a loss mitigation application has been approved. Under the reasonable diligence requirement, servicers may request the documents and information necessary to make the loss mitigation application complete, though a duty of reasonable diligence is imposed during the information-gathering process and not after a loss mitigation option is offered.