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CEB Prac. Guide § 2A.12 -- Persons to Whom the FDCPA Apply -- Federal -- Subsidiaries and Loan Servicers

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DFPI Issues Proposed Regulations on Scope of Licensure Required by DCLA — Response Due by August 29, 2022

by Scott J. Hyman |

On July 15, the DFPI issued proposed regulations on the scope of  debt collection licensure required by the DCLA.  The text of the proposed regulations can be found  here:  PRO-05-21-Text-DCLA-Invitation-for-Comments.-7.14.22 There are a number of significant proposed regulations for licensees, applications, or potential licensees. First, the DFPI's proposed regulations would confirm that W-2 or true employees are not required to… Read More

District Court (Tenn.) Says Debt Servicer Entitled to Rely on FDCPA Exemption for Debts Not in Default at the Time of Assignment; Accuses Plaintiff of Erecting Paper Castles and Storming Them with Paper Horses

by Scott J. Hyman |

In Ward v. Npas, Inc., No. 3:19-cv-00484, 2020 U.S. Dist. LEXIS 132461 (M.D. Tenn. July 27, 2020), Judge Trauger ruled in favor of a medical debt servicer, who relied on the FDCPA’s exemption for debts not in default at the time of the assignment in order to prevent application of the FDCPA.  The District Court adopted the Second Circuit’s approach… Read More

District Court (Cal.) Says Student Loan Servicer Not a “Debt Collector” Under the FDCPA Because Account Was Not In Default at the Time of the Assignment

by Scott J. Hyman |

In Neal v. Am. Educ. Servs., No. 2:18-cv-01784-KJN (PS), 2019 U.S. Dist. LEXIS 66584 (E.D. Cal. Apr. 18, 2019), Magistrate Judge Newman granted summary judgment against an FDCPA Plaintiff. Plaintiff argues that defendant is a debt collector because defendant "claim[s] to be in service of this [*13]  debt." (ECF No. 1-1 at 7.) However, this is not the appropriate legal standard… Read More

Court of Appeal (Cal.) Says Borrower Stated FDCPA Claim Against Mortgage Servicer Where Debt Already Was In Default at the Time of Assignment

by Scott J. Hyman |

In Randall v. Ditech Financial, LLC., 2018 WL 2355927, at *3 (Cal.App. 4 Dist., 2018), the California Court of Appeal found that an FDCPA Plaintiff stated a claim against a mortgage servicer who accepted assignment of a loan that already was in default. Here, the complaint alleged Ditech “collects debts, either on behalf of itself or others, in the regular… Read More

District Court (N.J.) Says Loan Servicer Who Acquired Servicing Rights After Loan Was In Default Was Subject to FDCPA; Says Consumer v. Commercial Nature of the Loan Does Not Defeat Class Cert.

by Scott J. Hyman |

In Grubb v. Green Tree Servicing, LLC, 2017 WL 3191521, at *8–9 (D.N.J., 2017), Judge Wolfson held that a loan servicer's acquisition of servicing rights for an account in default triggered the FDCPA. Post-assignment servicers and owners of debts that were in default at the time of assignment, however, are treated differently under the law. “[A]n assignee may be deemed… Read More

District Court (Cal.) Holds that Holder of Second Mortgage Whose Debt Was Eliminated as “Sold-Out Junior” Was Not Subject to FDCPA Because Debt Was Not In Default at the Time of Acquisition

by Scott J. Hyman |

In Lombana v. Green Tree Servicing, LLC, 2016 WL 4967641, at *2 (C.D.Cal., 2016), Judge Gandhi granted summary judgment to a Loan Servicer on the grounds that the Account was not in default at the time of acquisition. Here, Defendant contends that it does not fall within the definition of a “debt collector,” and therefore cannot be liable for any… Read More

District Court (Ala.) Says Loan Servicer Who Acquired Debt When In Default Must, but Failed to, Comply with the FDCPA

by Scott J. Hyman |

In Johns v. Wells Fargo Bank, N.A., 2015 WL 143753 (S.D.Ala. 2015), Judge DuBose found that a mortgage servicer who acquired defaulted debt had to comply with the FDCPA's Mini-Miranda and debt validation requirements. In this case, the Johns allege that servicing of their loan was transferred to the defendant on or about February 16, 2007—while their bankruptcy petition was pending—at a… Read More

District Court (Ga.) Finds that Entity Acquiring Portfolio of Current and Defaulted Debt is Not Subject to FDCPA

by Scott J. Hyman |

In Davidson v. Capital One Bank (USA), N.A., 2014 WL 4071891 (N.D.Ga. 2014), Judge Duffey held that an entity that acquires a portfolio with both current and defaulted debt is not subject to the FDCPA as to those loans in the portfolio that were in default at the time of the purchase. Judge Duffey held that 15 USC 1692a(6)’s application… Read More

District Court (Cal.) Finds — in real property case — that FCRA overcomes the Rosenthal Act, but the Litigation Privilege Does Not.

by Scott J. Hyman |

In Farber v. JPMorgan Chase Bank N.A., 2014 WL 68380 (S.D.Cal. 2013), Judge Curiel found that mortgage servicers were subject to the Rosenthal Act, but found that only certain conduct might be actionable.  The facts were as follows: In September 2010, Farber sold the Property by way of a “short sale” with Defendant receiving approximately $1,139,345.00. (Id. ¶ 21.) In… Read More

District Court (Cal.) Quickly Disposes of Argument that Loan Servicer is a “Debt Collector” under the FDCPA

by Scott J. Hyman |

In Caballero v. Ocwen Loan Servicing, Inc., 2009 WL 1528128 (N.D.Cal. 2009), Judge Whyte quickly disposed of a Plaintiff’s argument that a loan servicer involved in the foreclosure of the Plaintiff’s home was subject to the FDCPA.  Judge Whyte explained, in granting the loan servicer's Rule 12(b)(6) motion:   Defendant seeks dismissal of the Fair Debt Collection Practices Act claim… Read More