Sometime in June 2012, the Sixth Circuit Court of Appeals decided that a law firm could be liable, under the Fair Debt Collection Practices Act (“FDCPA”), for stating the wrong identity of the mortgage owner in a foreclosure complaint. In effect, the Sixth Circuit held that a pre-assignment foreclosure filing could violate the FDCPA.
This past January 2013, in Glazer v. Chase Home Finance, the same court decided another case involving the interrelationship between the FDCPA and judicial foreclosure proceedings. This latest case not only establishes that the FDCPA applies to foreclosure proceedings, but it also strongly suggests that misstatements in a foreclosure complaint, and presumably other court filings, subject not only the plaintiff’s attorney to FDCPA liability, but the loan servicer client as well.
Finally, although not expressly addressed by the Glazer court, this decision illustrates that an attorney’s duty, under Civil Rule 11 and Ohio Rev. Code 2323.51, requires that he or she independently investigate and research a client’s claims prior to filing a complaint or other legal process. Stated another way, an attorney that accepts a referral at face value, and files a complaint without more, is likely running afoul of not only the FDCPA, but the prohibition against frivolous conduct as well.
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