Pennsylvania Court Rules RESPA Violations No Defense in Foreclosure

The Superior Court of Pennsylvania recently issued a precedential decision in U.S. Bank National Trust Association v. VonNieda-Lagrassa. 2026 PA Super 195. The Court determined, in part, that allegations of violations of the Real Estate Settlement Procedure Act (“RESPA”), 12 U.S.C. § 2601, et seq. do not provide a defense to a mortgage foreclosure action. In the underlying case, the borrower alleged that the foreclosing lender failed to respond to multiple notices of error under RESPA. While there is no dispute that a borrower may have a private cause of action based on these allegations, it is not a valid defense sufficient enough to avoid the entry of summary judgment in favor of a lender.

This raises an interesting issue regarding prior case law, specifically Fleet Real Estate Funding Corp. v. Smith, 530 A.2d 919 (Pa. Super. 1987). In Fleet, the Superior Court determined that federal law did not require mandatory compliance with the Department of Housing and Urban Development (“HUD”) servicing requirements as a prerequisite to a foreclosure action for a mortgage insured by the Federal Housing Administration (“FHA”). However, the Court held that a mortgagee’s failure to comply with the servicing guidelines outlined in the HUD regulations and handbook can be raised as an equitable defense to a foreclosure action.

These cases involve two different federal regulatory schemes, both meant to protect borrowers. As if appears now, the courts can allow an equitable affirmative defense for alleged violations of HUD’s servicing regulations and guidelines, but not under RESPA. For foreclosure practitioners, it is worth reviewing and analyzing how these cases can impact the practice of law in Pennsylvania when borrowers raise a violation of federal law as an affirmative defense.