What Is Notice of Error?

What Errors Are Covered Under Regulation X?

The CFPB defines 11 specific categories of errors a borrower can assert in a Notice of Error. The most common ones relevant to borrowers facing financial distress are:

1. Failure to accept a payment: Returning or refusing a payment that conforms to the servicer's requirements
2. Failure to apply a payment correctly: Misapplying payments to the wrong account, wrong period, or wrong category (principal vs. escrow)
3. Failure to credit a payment as of the date received: Backdating or delaying credit for a payment
4. Failure to maintain an accurate escrow account: Errors in escrow analysis, shortage calculations, or disbursements
5. Imposing unauthorized fees: Charging inspection fees, late fees, or other charges not authorized by the mortgage contract
6. Failure to provide an accurate payoff balance: Giving an incorrect payoff amount when you ask for one. An incorrect reinstatement figure can fall under the catchall category for any other servicing error
7. Failure to process a complete loss mitigation application: Not evaluating a borrower for modification or other loss mitigation after receiving a complete application
8. Moving for foreclosure when the dual tracking rule bars it: For example, asking for a foreclosure judgment or holding the sale after you sent a complete loss mitigation application more than 37 days before the sale

How Do You File a Notice of Error?

Filing a Notice of Error follows a structured process:

1. Identify the specific error: Review your statements, payment history, and correspondence to pinpoint exactly what the servicer did wrong. Be as specific as possible — date, amount, and nature of the error.
2. Write the notice: Include your name, property address, loan number, a clear statement that this is a "Notice of Error under 12 CFR § 1024.35," a description of the error, and what you want the servicer to do to correct it. Attach supporting documents (payment receipts, bank statements, prior statements showing the discrepancy).
3. Send to the correct address: Send the notice to the servicer's designated error resolution address, which may differ from the payment address. Check your monthly statement or the servicer's website.
4. Use certified mail with return receipt: This creates a paper trail proving delivery date and starting the 30-business-day response clock.

What Happens After You File?

The servicer must follow a specific protocol after receiving your Notice of Error:

• Acknowledgment (5 business days): Written confirmation that they received your notice and are investigating.
• Investigation (30 business days): The servicer investigates the alleged error. For most errors they may extend this by 15 business days with written notice explaining why. A wrong payoff balance gets 7 business days, and a foreclosure error is due before the sale or within 30 business days, whichever comes first, with no extension.
• Resolution: The servicer must either (a) correct the error and send written notification describing the correction, including the effective date and any credits or adjustments, or (b) send a written explanation of why they determined the account is correct, including the specific reasons and supporting evidence.

The servicer cannot charge you a fee for the investigation. For 60 days after it receives your notice, it also cannot report negative information to a credit bureau about a payment the notice disputes.

When Should You File a Notice of Error vs. a QWR?

Both tools can be used to address servicer problems, but they serve different purposes. A Notice of Error is specifically for asserting that the servicer made a mistake — it demands a correction. A Qualified Written Request is broader — it can request account information you don't have, like a full payment history or fee breakdown, whether or not an error has occurred. A letter can do both jobs: Regulation X treats a Qualified Written Request that asserts an error as a Notice of Error, and one that asks for information as an information request. Which protections apply depends on what the letter says and where you send it.