Mortgage foreclosure is debt collection under the FDCPA


Article by: Dean Kanellis


FDCPALast June, the Sixth Circuit 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. Earlier this month, the same court decided another case involving the application of the FDCPA to judicial foreclosure proceedings. This latest case strongly suggests that misstatements in a foreclosure complaint, and presumably other court filings, subject not only the plaintiff’s attorney to the FDCPA, but the loan servicer client as well.

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Pre-assignment foreclosure filing may violate the Fair Debt Collection Practices Act


Article by: Dean Kanellis


The Sixth Circuit Court of Appeals, in Wallace v. Washington Mutual, recently announced that filing a foreclosure complaint, before the note and mortgage have been transferred and assigned to the Plaintiff, may violate the Fair Debt Collection Practices Act (the “FDCPA”). More importantly, the court noted that the FDCPA may be violated even if state law permits the Plaintiff to cure a real-party in interest defect after the complaint is filed. Finally, although the defendant in this case was the law firm that represented the foreclosure plaintiff, depending on the circumstances, a servicer may be liable under the same theory that was announced by this court.

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Our Fees

Our fees are competitive and conform to industry standards. In most instances, the following fee arrangements are available:


1. Collection matters are handled on a contingency fee basis, but an hourly option is available and sometimes requested by clients who hold large balance claims. At a clients’ request, fees for collection matters can be billed on a per item flat fee basis for letters, pleadings, motions, and executions.


2. Uncontested foreclosures and related bankruptcy and eviction matters are most often billed on a flat fee basis according to the Fannie Mae guidelines. Contested matters, and counterclaims, generally require additional flat fee or hourly billing, subject to client approval;


3. Uncontested replevin cases are also handled on a flat fee basis. If the right to recover possession is opposed, the matter is converted to an hourly fee basis, upon client approval;


4. Mechanic’s lien matters are treated the same as replevin cases, unless they involve multiple properties, or otherwise relate to unusual subject matter;


5. Our firm is also pioneering the availability and use of alternative fee arrangements (“AFA’s”) for legal services that have traditionally been billed hourly. The availability of AFA’s is a product of our firm’s ambition to deliver legal services in an efficient and cost-effective manner, and help clients more effectively forecast and contain costs. AFA’s are available for an ever expanding range of matters, including litigation defense, discovery disputes, and appellate practice.

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