FDCPA

Says Foreclosure Mills Must Comply With FDCPA

Using common sense and basic rules of statutory construction, the 6th Circuit Court of Appeals ruled that foreclosures were indeed about the collection of money and therefore fall under the Federal Debt Collections Practices Act (FDCPA) especially if the loan is a Fannie Mae or Freddie Mac loan.

In this particular case, JPMorgan Chase and their attorneys concealed the fact that Fannie Mae actually owned the loan and the original note was being held by a custodian for Fannie Mae’s benefit (as prescribed in Fannie Mae guidelines).  The plaintiff Lawrence Glazer notified JPMorgan Chase and their attorneys that he disputed the debt and requested verification. JPMorgan Chase refused to verify the amount of the debt or its true owner.

The court held that mortgage foreclosure is debt collection under the Act and that lawyers who meet the general definition of a “debt collector” must comply with the FDCPA when engaged in mortgage foreclosures.  The court ruled a lawyer satisfies the definition of “debt collector” if his principal business purpose is mortgage foreclosure or if he regularly performs this foreclosure.

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