What Damages Can You Recover Under RESPA?

When a mortgage servicer violates the Real Estate Settlement Procedures Act (RESPA), the law provides powerful remedies to make the consumer whole and punish the bad behavior. Under 12 U.S.C. § 2605(f), you can sue for three distinct types of damages.

1. Actual Damages

This is the money you lost or the harm you suffered because of the servicer’s error.

• Economic Damages: Late fees charged wrongly, postage costs for sending your disputes, time spent on the phone (lost wages), or credit monitoring fees.
• Non-Economic Damages: Federal courts have recognized that “actual damages” includes emotional distress. The stress, anxiety, and frustration of dealing with a servicer who refuses to fix a critical error—especially when foreclosure is threatened—is compensable.

2. Statutory Damages

If we can prove that the servicer has a “pattern or practice” of noncompliance, the judge can award up to $2,000 per violation in additional statutory damages. This is “penalty money” designed to punish the servicer, regardless of your actual loss.

• Example: If a servicer systematically fails to acknowledge Notices of Error for hundreds of customers, that is a pattern or practice.

3. Attorney’s Fees and Costs

This is the “fee-shifting” provision that makes this litigation possible.

• If you win your case (or reach a favorable settlement), the mortgage servicer is required to pay your reasonable attorney’s fees.
• This allows us to represent homeowners on a contingency or hybrid basis. You don’t have to be rich to sue a bank; you just need a valid claim.

Why This Matters

Banks rely on the fact that most people can’t afford to pay a lawyer $400/hour to fight a $50 late fee. RESPA flips the math. By making the bank pay for your lawyer, the law levels the playing field and turns small errors into serious liability for the servicer.