Not even $3.20 for postage. But one judge says the majority got it wrong
A New York borrower whose mortgage servicers twice ignored her written requests for account information walked away from the Second Circuit with nothing - not even $3.20 for postage.
The ruling, handed down on November 2, 2026, affirmed the dismissal of a lawsuit brought under the Real Estate Settlement Procedures Act against Newrez LLC, operating as Shellpoint Mortgage Servicing, and PHH Mortgage Corporation. The borrower had sent qualified written requests - formal demands for loan information that RESPA requires servicers to acknowledge within five days - to both companies. Neither responded. She sent a second round. Silence again.
At the heart of her case was more than $70,277.15 in interest and fees she said had been improperly added to her loan balance after a mortgage modification following missed payments. She also sought $225 she paid a lawyer to prepare the second set of requests, and $3.20 in postage to mail them.
The Second Circuit shut down all three claims.
Modification costs are not servicing damages
On the largest piece - the $70,277-plus in fees and interest - the court drew a hard line between loan modifications and loan servicing. The added charges, the court found, resulted from the modification itself, not from anything the servicers did or failed to do in their day-to-day servicing role. RESPA covers servicing. It does not reach the terms of a modification. That distinction meant the borrower's biggest claim never got off the ground.
This was actually her second attempt. An earlier version of the complaint had been dismissed because it failed to allege any damages. The district court gave her another shot. Even with more specific allegations in the second amended complaint, the core problem remained: the fees she was challenging traced back to the modification, not to servicing conduct.
The $225 question
The attorney fee claim raised a narrower but potentially more important question for the servicing industry. RESPA lets borrowers recover "any actual damages" caused by a servicer's failure to respond. It also has a separate section that lets successful plaintiffs recover attorney's fees incurred in connection with their lawsuit. The majority held that those two categories do not overlap. Attorney's fees are specifically addressed in the statute and can only be recovered when the borrower wins. She lost, so the $225 was off the table.
A dissent worth reading
That reasoning drew a sharp dissent. The dissenting opinion argued the $225 was not a litigation expense. The borrower did not hire a lawyer to sue. She hired a lawyer to re-send the requests her servicers had already ignored - work that a housing counselor could have performed just as easily.
Under the majority's logic, the dissent pointed out, a borrower who pays a housing counselor $225 to prepare a follow-up request could recover that cost, but a borrower who pays an attorney the same amount for the same work could not. The outcome would turn entirely on who performed the work, not what the work actually was.
The dissent argued that the attorney's fees section of RESPA covers fees "incurred in connection with" litigation - things like researching a lawsuit, drafting a complaint, pursuing an appeal. Preparing a follow-up servicing request falls outside that scope. It is compliance work, not legal work in the litigation sense, regardless of who does it.
Too small to matter
That left the $3.20 for postage. The majority invoked the old legal maxim that the law does not concern itself with trifles and declined to let a claim that small take up federal court time.
The dissent pushed back, noting that Congress wrote "any actual damages" into the statute with no minimum dollar amount. Congress also capped additional damages for patterns of servicer noncompliance at $2,000, showing it anticipated actions involving small sums. A $3.20 postage expense is still an actual loss, the dissent argued, if it meets the statute's other requirements.
What servicers should take from this
For servicers and compliance teams, the decision draws a bright line: costs that flow from a loan modification will not be recharacterized as servicing damages under RESPA in the Second Circuit, and pre-litigation costs a borrower incurs chasing an unanswered request will not count as "actual damages" - at least for now.
But the dissent is pointed enough to keep compliance officers paying attention. A different circuit - or a different panel - could reach the opposite conclusion. For servicers, the practical takeaway is straightforward: respond to qualified written requests on time, because the legal protection this ruling offers is narrower than it looks, and the next court may not see it the same way.
This case has been resolved by a final appellate decision. The Second Circuit affirmed the district court's dismissal. The dissent would have sent the case back for further proceedings on the $225 and $3.20 claims.
