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 or reinstatement figure: Providing incorrect amounts for paying off or reinstating the loan
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 while a loss mitigation application is pending: Dual tracking violations

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. They may extend this by 15 days with written notice explaining why.
• 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.

During the investigation, the servicer cannot charge you fees for the investigation and cannot report negative information about the disputed item to credit bureaus.

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. Many consumer attorneys recommend sending both in a single letter: "This letter serves as both a Qualified Written Request under RESPA Section 6 and a Notice of Error under 12 CFR § 1024.35." This approach triggers both sets of legal protections simultaneously.