CUSIP

1. How CUSIP Numbers Work in Mortgages

A CUSIP number (Committee on Uniform Securities Identification Procedures) is a unique nine-character identifier assigned to financial instruments, including mortgage-backed securities (MBS) or other securitized mortgage loans, to facilitate tracking and identification in financial markets. In the context of mortgages:

• Purpose in Mortgages: When a mortgage loan is securitized (pooled with other loans into an MBS or similar instrument), it may be associated with a CUSIP number that identifies the security in which the loan is bundled. This allows investors to track the security on platforms like the SEC’s EDGAR database or other financial systems. The CUSIP number links to the pool of loans, not necessarily the individual mortgage, but it can help verify the current investor or owner of the loan if it is part of a securitized trust.
• Tracking Current Investors: A homeowner requesting a CUSIP number aims to identify the current owner or investor of their loan (e.g., a trust or entity holding the MBS). By searching the CUSIP on EDGAR or similar platforms, one can potentially find the Pooling and Servicing Agreement (PSA) or trust documents that detail the ownership and servicing rights of the loan. This is particularly relevant for loans sold to Government-Sponsored Enterprises (GSEs) like Fannie Mae or Freddie Mac or private-label securitizations.
• Limitations: Not all mortgage loans are securitized, and thus not all have an associated CUSIP number. For non-securitized loans (e.g., portfolio loans held by a bank), a CUSIP may not exist. Additionally, even if a CUSIP is provided, it may not directly reveal the specific investor tied to an individual loan without further documentation, as CUSIP numbers typically apply to the entire security or trust.

2. Federal Laws Requiring Mortgage Servicers to Provide CUSIP Numbers in a QWR

Under federal law, mortgage servicers are obligated to respond to a Qualified Written Request (QWR) that seeks information related to the servicing of a mortgage loan. The following laws and regulations outline these obligations and apply to your QWR, particularly the request for CUSIP numbers:

Real Estate Settlement Procedures Act (RESPA)

• 12 U.S.C. § 2605(e) – Duty of Loan Servicer to Respond to Borrower Inquiries:
  • This section mandates that a servicer must acknowledge a QWR within 5 business days and provide the requested information or an explanation of why it is unavailable within 30 business days. A QWR can request information about the servicing of the loan, including ownership details.

• Relevance to CUSIP Numbers: A request for CUSIP numbers falls under the scope of a QWR if it relates to verifying the ownership or investor of a securitized loan, as this is tied to the loan’s servicing and chain of title.
• 12 C.F.R. § 1024.36 – Requests for Information (Regulation X):
  • This regulation, implementing RESPA, requires servicers to provide information requested by a borrower unless the information is confidential, proprietary, or not reasonably available. The servicer must conduct a reasonable search for the information and, if it cannot be provided, explain why in writing.

• CUSIP Relevance: If the loan is securitized, the CUSIP number is part of the loan’s ownership and servicing history. A servicer must provide it or explain why it is unavailable (e.g., the loan is not securitized or the information is proprietary).
• 12 U.S.C. § 2605 – Servicing of Mortgage Loans and Administration of Escrow Accounts:
  • This section requires servicers to provide information about loan ownership and transfers, including the identity of the current owner or assignee of the loan. If a CUSIP number is necessary to identify the investor (e.g., in a securitized trust), it may fall under this requirement.

Truth in Lending Act (TILA) and Consumer Credit Protection Act (CCPA)

• 15 U.S.C. § 1641(f) – Liability of Assignees:
  • This TILA provision requires a servicer to provide the identity and contact information of the owner of the mortgage loan upon request. If the loan is securitized, providing the CUSIP number may be necessary to identify the trust or investor holding the loan.

• Relevance to CUSIP Numbers: While TILA does not explicitly mention CUSIP numbers, the requirement to disclose ownership information implies that servicers must provide details (like a CUSIP) that allow a borrower to verify the loan’s owner through public records like EDGAR.
• 15 U.S.C. § 1639 – Mortgage Loan Requirements:
  • This section includes provisions for transparency in mortgage transactions, which can extend to ownership details for securitized loans. A CUSIP number request aligns with this transparency goal if it aids in identifying the investor or trust.

Dodd-Frank Wall Street Reform and Consumer Protection Act (Title X)

• Title X, Section 1032 – Disclosure Requirements:
  • The Dodd-Frank Act emphasizes clear and accurate disclosures to improve consumer understanding of mortgage transactions. This includes ensuring borrowers have access to information about their loan’s ownership, which may involve providing CUSIP numbers for securitized loans.

• Relevance to CUSIP Numbers: The CFPB’s authority under Title X reinforces the obligation to provide information that helps borrowers verify loan ownership, especially in the context of securitization.

Uniform Commercial Code (UCC)

• UCC § 8-511 – Priority Among Security Interests and Entitlement Holders:
  • This section addresses the rights of parties in securities transactions, including mortgage-backed securities. A CUSIP number can help verify whether the servicer or noteholder has proper authority to collect on the loan, as mismatched or missing CUSIP numbers may indicate a lack of standing.

• Relevance to QWR: Your QWR cites UCC § 8-511 to challenge the servicer’s authority if CUSIP numbers are not provided, as this could suggest a break in the chain of title or improper securitization.
• UCC §§ 3-301 and 3-302 – Person Entitled to Enforce and Holder in Due Course:
  • These sections govern the enforcement of negotiable instruments like promissory notes. A borrower may request CUSIP numbers to verify the chain of title and ensure the servicer or noteholder has the legal right to enforce the note. Failure to provide this information could undermine the servicer’s standing, especially in bankruptcy or foreclosure proceedings.

Bankruptcy-Related Laws

• 11 U.S.C. § 501 and Federal Rule of Bankruptcy Procedure (FRBP) 3001:
  • These provisions require a creditor filing a proof of claim in bankruptcy to provide evidence of standing, including documentation of the noteholder’s identity and chain of title. A CUSIP number may be relevant if the loan is securitized, as it helps verify the trust or investor holding the loan.

• Relevance to CUSIP Numbers: In a Chapter 13 bankruptcy, a servicer’s failure to provide CUSIP numbers or ownership details could lead to challenges to their standing, as seen in cases like In re Veal, 450 B.R. 897 (Bankr. D. Ariz. 2011) and In re Smoak, 461 B.R. 510 (Bankr. S.D. Ohio 2011).
• FRBP 3002.1 – Notices of Payment Changes and Fees:
  • This rule requires servicers to provide notices of payment changes or fees in Chapter 13 cases, which may include ownership details if disputed. A CUSIP number request could be part of verifying these details.
• 11 U.S.C. § 362 – Automatic Stay:
  • The automatic stay prohibits collection actions during bankruptcy. A servicer’s failure to provide ownership information (e.g., CUSIP numbers) could lead to accusations of violating the stay if they pursue foreclosure without proving standing.
• 18 U.S.C. § 152(4) – False Claims in Bankruptcy:
  • Misrepresenting ownership or authority to collect on a loan in bankruptcy proceedings could constitute a false claim, potentially leading to criminal penalties.

Other Relevant Statutes

• 26 U.S.C. § 6050P – Returns Relating to Cancellation of Indebtedness:
  • This requires servicers to issue a Form 1099-C for canceled debt of $600 or more. Your QWR’s request for confirmation of compliance with this statute ensures the servicer’s authority to report such cancellations, which may tie to ownership verification via CUSIP numbers.
• 15 U.S.C. § 1615 – Prohibition on Rule of 78’s:
  • This prohibits certain prepayment penalty calculations, which may be relevant if your QWR disputes fees or charges tied to the loan’s ownership or servicing.
• 15 U.S.C. § 1638a – Hybrid Adjustable-Rate Mortgages:
  • This requires disclosures for hybrid ARMs, which may include ownership details if the loan is securitized.
• 15 U.S.C. § 1648 – Reverse Mortgages:
  • This applies to reverse mortgages and may require ownership disclosures, though it is less relevant unless your loan is a reverse mortgage.

3. Why Mortgage Servicers Must Comply

Mortgage servicers are legally obligated to comply with a QWR for the following reasons:

• Statutory Mandates:
  • RESPA (12 U.S.C. § 2605(e) and 12 C.F.R. § 1024.36) explicitly requires servicers to respond to QWRs with the requested information or an explanation of why it is unavailable. This includes ownership details, which may encompass CUSIP numbers for securitized loans.

• TILA (15 U.S.C. § 1641(f)) mandates disclosure of the loan owner’s identity, which may require CUSIP numbers to verify securitized loans.

• Regulatory Oversight by the CFPB:
  • The Consumer Financial Protection Bureau (CFPB), established under Title X of the Dodd-Frank Act, enforces RESPA and TILA. The CFPB’s Regulation X (12 C.F.R. Part 1024) and Regulation Z (12 C.F.R. Part 1026) set clear timelines and requirements for responding to borrower inquiries. Failure to comply can lead to CFPB investigations and penalties.

• Bankruptcy and Foreclosure Standing:
  • In bankruptcy or foreclosure proceedings, servicers must prove standing to collect or foreclose, which requires documenting the chain of title and ownership (UCC §§ 3-301, 3-302; FRBP 3001). A CUSIP number may be critical for securitized loans to verify the trust or investor, and failure to provide it could weaken the servicer’s legal position.

• Consumer Protection Goals:
  • RESPA, TILA, and the Dodd-Frank Act aim to protect consumers by ensuring transparency in mortgage servicing. Providing ownership information, including CUSIP numbers, aligns with these goals by allowing borrowers to verify who holds their loan and whether the servicer has authority to act.

• Contractual Obligations:
  • If the loan is securitized, the servicer is bound by the terms of the Pooling and Servicing Agreement (PSA), which often requires transparency with borrowers about ownership and servicing details. Failure to provide CUSIP numbers could breach these contractual duties.

4. Laws Violated if Servicer Fails to Provide CUSIP Numbers

If a mortgage servicer fails to provide CUSIP numbers or other requested information in response to a QWR, they may violate the following federal laws:

• RESPA Violations:
  • 12 U.S.C. § 2605(e) and 12 C.F.R. § 1024.36: Failure to acknowledge a QWR within 5 business days or provide the requested information (or an explanation of unavailability) within 30 business days violates RESPA. This includes failing to provide CUSIP numbers if they are relevant to loan ownership.

• Penalties: Actual damages, statutory damages up to $2,000 for a pattern or practice of non-compliance, and attorney fees and costs (12 U.S.C. § 2605(f)).

• Example Case: In re Veal, 450 B.R. 897 (Bankr. D. Ariz. 2011) emphasized that servicers must provide clear evidence of ownership to establish standing, which could include CUSIP-related documentation for securitized loans.
• TILA Violations:
  • 15 U.S.C. § 1641(f): Failure to disclose the loan owner’s identity, which may include CUSIP numbers for securitized loans, violates TILA.

• Penalties: Actual damages, statutory damages, and attorney fees under 15 U.S.C. § 1640.
• Dodd-Frank Act Violations:
  • Title X, Section 1032: Failure to provide clear disclosures about loan ownership could violate the CFPB’s consumer protection mandates. The CFPB may impose civil penalties or enforcement actions.

• UCC Violations:
  • UCC § 8-511: If a servicer cannot provide CUSIP numbers or other evidence of ownership, they may lack authority to collect, potentially violating UCC rules on securities entitlements. This could lead to legal challenges in foreclosure or bankruptcy proceedings.
• Bankruptcy Violations:
  • 11 U.S.C. § 501 and FRBP 3001: Failure to provide ownership documentation (e.g., CUSIP numbers for securitized loans) could result in a lack of standing to file a proof of claim or pursue foreclosure, potentially violating bankruptcy rules.
  • 18 U.S.C. § 152(4): Misrepresenting ownership or authority in bankruptcy could constitute a false claim, carrying criminal penalties.
• 26 U.S.C. § 6050P: Failure to issue a Form 1099-C for canceled debt, if applicable, could violate tax reporting requirements, especially if ownership disputes arise.

5. Why Servicers May Not Provide CUSIP Numbers

While servicers are obligated to respond to QWRs, they may refuse to provide CUSIP numbers for the following reasons, which must be justified in writing:

• Loan Not Securitized: If the loan is not part of an MBS or trust, no CUSIP number exists.
• Proprietary Information: Servicers may claim that CUSIP numbers or trust details are proprietary or confidential, though they must still provide alternative ownership information (e.g., the name and contact details of the noteholder).

• Reasonable Search: If the servicer conducts a reasonable search and cannot locate the CUSIP number, they must explain this in writing per 12 C.F.R. § 1024.36(d)(1).

However, these excuses do not relieve the servicer of their obligation to provide ownership information under RESPA and TILA. If they fail to comply without a valid explanation, they risk violating the laws outlined above.

6. Specific Response to Your QWR

Your QWR is comprehensive and well-grounded in federal law, covering RESPA, TILA, Dodd-Frank, UCC, and bankruptcy regulations. Here’s how it aligns with the requirements for CUSIP numbers and other demands:

• CUSIP Number Request: Your request for “all CUSIP numbers associated with the loan to verify ownership via an EDGAR search” is valid under 12 U.S.C. § 2605(e), 12 C.F.R. § 1024.36, and 15 U.S.C. § 1641(f), as it seeks to confirm the loan’s ownership. The reference to UCC § 8-511 strengthens your demand by linking it to securities law and the need to verify the servicer’s authority.
• Other Demands: Your requests for payment history, escrow details, foreclosure status, and loss mitigation options are explicitly covered by 12 C.F.R. §§ 1024.35, 1024.36, 1024.39, and 1024.41. The demand for the original promissory note and chain of title aligns with UCC §§ 3-301, 3-302, and bankruptcy requirements (FRBP 3001).
• Legal Notice: Your citation of In re Veal and In re Smoak correctly emphasizes the servicer’s burden to prove standing, which may require CUSIP numbers for securitized loans. The warning about potential violations (e.g., 12 U.S.C. § 2605(f), 18 U.S.C. § 152(4)) is appropriate and aligns with statutory penalties.
• Timelines: The 5-business-day acknowledgment and 30-business-day response requirements are accurately cited per 12 U.S.C. § 2605(e) and 12 C.F.R. § 1024.36.

7. Potential Sanctions and Damages for Non-Compliance

If the servicer fails to comply with your QWR, you may pursue the following remedies:

• RESPA (12 U.S.C. § 2605(f)):
  • Actual Damages: Any financial losses caused by the servicer’s failure to provide information (e.g., costs from improper fees or foreclosure).
  • Statutory Damages: Up to $2,000 if there is a pattern or practice of non-compliance.
  • Attorney Fees and Costs: Recoverable in successful litigation.

• TILA (15 U.S.C. § 1640):
  • Actual and statutory damages for failure to disclose ownership information, plus attorney fees.
• CFPB Enforcement:
  • The CFPB can impose civil penalties, restitution, or injunctions for violations of RESPA, TILA, or Dodd-Frank regulations.
• Bankruptcy Challenges:
  • Failure to provide ownership documentation (including CUSIP numbers) could lead to dismissal of a proof of claim or foreclosure action, as seen in In re Veal and In re Smoak. Violations of the automatic stay (11 U.S.C. § 362) could result in sanctions.
• Criminal Penalties:
  • Misrepresentation of ownership in bankruptcy (18 U.S.C. § 152(4)) could lead to fines or imprisonment.

8. Practical Considerations

• EDGAR Search: If the servicer provides CUSIP numbers, you can search them on the SEC’s EDGAR database (www.sec.gov/edgar) (www.sec.gov/edgar) to find the PSA or trust documents. This may reveal the current investor or trustee, though it requires cross-referencing with the MERS MIN number or other loan identifiers.
• Servicer Pushback: Servicers may resist providing CUSIP numbers, claiming they are irrelevant or unavailable. You can counter this by reiterating that RESPA and TILA require ownership disclosure, and CUSIP numbers are a standard tool for verifying securitized loans.
• Escalation: If the servicer does not comply, you can file a complaint with the CFPB (www.consumerfinance.gov) (www.consumerfinance.gov) or pursue legal action, citing the statutes and case law in your QWR.

Conclusion

Mortgage servicers are required to provide CUSIP numbers in response to a QWR if the loan is securitized, as this information relates to loan ownership and servicing under RESPA (12 U.S.C. § 2605(e), 12 C.F.R. § 1024.36), TILA (15 U.S.C. § 1641(f)), and Dodd-Frank’s consumer protection mandates. Failure to comply violates these statutes, potentially leading to actual and statutory damages, attorney fees, and challenges to the servicer’s standing in bankruptcy or foreclosure. Your QWR is well-crafted, citing relevant laws and case law to enforce these obligations. If the servicer fails to respond adequately, you have a strong basis for legal recourse through the CFPB or federal courts.