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

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

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

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

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

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

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

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

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

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

In McKinney v. Cadleway Prop., Inc. (7th Cir. 2008) __ F.3d. __, the Court of Appeals for the Seventh Circuit defined the extent to which an assignee purchasing a debt in default becomes subject to the FDCPA.  The Court of Appeals held that "the purchaser of a debt in default is a debt collector for purposes of the FDCPA even… Read More