The Hill-

One aspect of the recent government shutdown that has received too little attention is that it significantly increased the risk that thousands of struggling homeowners across the nation would lose their homes. For example: in California, an elderly woman who recently lost her husband is on the verge of losing her family home due to the shutdown. Her lender wrongfully denied her for a deferral program designed to protect certain newly widowed spouses from foreclosure and eviction, but the Housing and Urban Development (HUD) representative who was helping her was furloughed during the shutdown. Even though the shutdown has ended, this widow is still facing foreclosure in February unless HUD takes action to address cases like hers that have piled up while critical agency resources were unavailable.

Sadly, this is not an isolated example. Over 9 million borrowers, most of them low-income, seniors, and/or residents of rural areas, have home mortgages that are either provided or insured by government mortgage programs run by HUD or the Department of Agriculture (USDA). Because key departments at both agencies were operating at drastically reduced capacity or not at all for over a month, thousands of homeowners could not get the help they needed to save their homes. Some may already have undergone foreclosure, and many remain at risk as HUD and the USDA reopen with a substantial backlog of requests for assistance. Unnecessary foreclosures on HUD and USDA borrowers will not just impact vulnerable homeowners; they will also lead to needless losses to the agencies’ mortgage insurance funds.

But HUD and the USDA can prevent further serious damage by taking a few simple steps: First, they should extend or waive any foreclosure-related deadline by at least 35 days. Second, they should issue a stay on foreclosures until they clear the backlog of pending requests for assistance. Third, they should direct lenders to rescind any foreclosures that occurred during the shutdown. And, in the event of another shutdown, the agencies should hit the pause button on foreclosures and related deadlines as they should have done during the recent shutdown.

[THE HILL]

2185459498 by on Scribd

Pennsylvania Record-

A home owner has filed a class action lawsuit against Seterus Inc., a specialty mortgage service company, citing alleged violations of the Fair Debt Collection Practices Act, violations of the Pennsylvania Fair Credit Extension Uniformity Act, and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law.

Kay Wenger filed a complaint on behalf of herself and others similarly situated on Dec. 18 in the U.S. District Court for the Middle District of Pennsylvania against Seterus Inc., alleging the specialty mortgage service uses unlawful and unfair debt collection practices to collect upon residential consumer mortgage loans.

According to the complaint, the plaintiff alleges that on April 1, 2016, her mortgage was transferred to Seterus while in a state of default.

[PENNSYLVANIA RECORD]

Reuters-

IBM’s mortgage servicing business Seterus has been hit with a proposed class action in Florida accusing it of trying to intimidate homeowners into paying delinquent amounts by making false ultimatums to foreclose on their homes.

Filed on Friday in Ft. Myers federal court, the lawsuit said as many as thousands of Florida homeowners received letters from Seterus falsely warning they could lose their homes if they did not pay the entire amount overdue on their loans. Seterus, which services defaulted mortgage loans for Fannie Mae, is being sold to Mr. Cooper Group, parent company of mortgage lender and servicer Nationstar Mortgage Holdings, IBM announced earlier this month.

[REUTERS]

H/T to DUBIN LAW OFFICES & for their win!

4486141241 by on Scribd

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CNBC-

Commerce Secretary Wilbur Ross said Thursday on CNBC that government employees affected by the shutdown should simply take out personal loans to cover their expenses. That advice is “completely out of touch with reality,” wealth manager and bestselling author David Bachtells CNBC Make It.

Around 800,000 federal employees face the prospect of missing yet another paycheck Friday as the partial government shutdown will enter its 35th day. Each employee has already missed more than $5,000 in wages on average, The New York Times estimates, so many have had to get creative to meet their financial responsibilities. Some have opted to cancel autopay on their bills, skip seeing the doctor, or even sell their car.

Hundreds are also turning to local food pantries and shelters to feed their families. One Chicago-based food pantry told the Chicago Tribuneit had helped 130 federal employees since the shutdown started, while a Utah-based organization estimated it had given out supplies to 280 federal employees.

[CNBC]

“The interesting thing about Deutsche Bank is they seem to be pretty much the only entity out there willing to lend to The Trump Organization.”

Politico-

Two powerful House committee chairs are planning a joint investigation into German lending giant Deutsche Bank, which is under scrutiny from Democrats over its business dealings with President Donald Trump.

House Intelligence Chairman Adam Schiff and Financial Services Chairwoman Maxine Waters coordinating oversight of the bank, which also faces questions about its role in money laundering schemes.

The two California Democrats have been talking about areas of interest for each committee and where there’s common ground, Schiff said in an interview.

“We’re going to work jointly,” he said. “We think we’ll be more effective doing it that way.”

[POLITICO]

Lexology-

The United States Supreme Court heard oral argument in the case Obduskey v. McCarthy & Holthus LLP on January 7, 2019. The Court’s ruling in this case could have major implications for all organizations—including law firms—that utilize non-judicial foreclosure regarding defaulted mortgages.

The primary question in Obduskey is whether the Fair Debt Collection Practices Act (the “FDCPA”), 15 U.S.C. § 1692-1692p, applies to non-judicial foreclosures. There is currently a circuit split regarding this question: the Fourth, Fifth, and Sixth Circuits apply the FDCPA to non-judicial foreclosures, while the Ninth and Tenth Circuits have held that the FDCPA does not apply to non-judicial foreclosures. The Obduskey decision should resolve this split.

The FDCPA only applies to “debt collectors,” defined under the statute as any person who “regularly collects or attempts to collect, directly or indirectly, debts owed or due . . . another.” 15 U.S.C. § 1692(a)(6). This definition, however, has certain carve-outs and does not traditionally apply to parties who are seeking only to enforce a security interest without obtaining any payment (e.g. repossessing a car). In the foreclosure context, judicial foreclosure where the creditor is seeking a deficiency judgment has traditionally fallen under the rubric of the FDCPA, as actions taken in such a proceeding are to collect a monetary debt. With non-judicial foreclosure where no deficiency is sought, however, the question becomes murkier. Hence the circuit split.

[LEXOLOGY]

WGBH-

Some cities in Massachusetts are cashing in on homeowners who have failed to pay tax bills by running auctions that pull in thousands of dollars more than they’re actually owed in taxes.

At Worcester’s annual auction last May, small tax lien debts of just a few hundred dollars routinely set off bidding wars from private investors who paid the city far more than a homeowner actually owed in unpaid taxes. The process may also make it more likely the homeowner will wind up in foreclosure.

City records show that private investors have paid Worcester more than $2.6 million in premiums in the last three years. Worcester only keeps that extra cash when the homeowner gets foreclosed on, and records from the city show Worcester has a balance of more than $900,000 in premiums paid to the city.

[WGBH]

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CNBC-

A foreclosure crisis spurred by climate change is becoming a real threat to the mortgage industry as extreme storms and other natural disasters increasingly occur in places where borrowers might not have flood or fire insurance.

The industry is not prepared for the effects of such extreme weather and rising sea levels, according to Ed Delgado, CEO of national mortgage trade association the Five Star institute and a former executive at Freddie Mac.

The current system is reactive and local and doesn’t include plans for the widespread effects of climate change. That could affect several major housing markets at once.

[CNBC]

KEVIN SCOTT, Plaintiff-Appellant,
v.
TROTT LAW, P.C., Defendant-Appellee.

BEFORE: BATCHELDER, DONALD, and THAPAR, Circuit Judges.

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

ALICE M. BATCHELDER, Circuit Judge.

This case is about a debtor, Scott, who claimed a debt collector, Trott, deceptively and fraudulently tried to foreclose on his mortgage. Scott’s Complaint asserted six counts of civil violations under federal and state law. After three months of discovery concluded, the district court granted summary judgment to Trott and dismissed all six counts. Scott appealed one count as a matter of statutory interpretation and appealed the district court’s decision to end discovery and consider summary judgment. We hold that the district court did not abuse its discretion ending discovery and considering summary judgment but that the court erred interpreting the statute. We REVERSE and REMAND.

I.

Although the facts of this case involve a debtor with previous litigation relating to his mortgage and the lender, this case is limited to the interactions between a debt collector and the debtor. In 2004, Kevin Scott (Scott) executed a mortgage with Bank of America, N.A. (BANA) on his home in Farmington Hills, Michigan. Between 2012 and 2016, Scott and BANA litigated over various issues relating to the mortgage; those issues were ultimately resolved by an order of this court in June 2016, dismissing Scott’s appeal of the district court’s order granting summary judgment to the defendants and dismissing the Complaint. Kevin Scott v. Bank of America, N.A. et al, No. 15-2188, (6th Cir. Jun. 7, 2016). In September of 2016, BANA retained Trott Law, P.C. (Trott) as a debt collector to manage foreclosure proceedings on Scott’s mortgage due to nonpayment.

On September 20, 2016, in compliance with the Fair Debt Collection Practices Act^[1] (FDCPA), Trott sent a Fair Debt Letter to Scott informing him of Trott’s role as a debt collector acting on behalf of its client, BANA, to foreclose on Scott’s mortgage for the total outstanding indebtedness of the mortgage. The Fair Debt Letter stated:

Unless you notify this office within thirty (30) days after receiving this notice that you dispute the validity of this debt, or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within thirty (30) days after receiving this notice that you dispute the validity of this debt, this office will obtain verification of the debt or a copy of the judgment, if applicable, and mail a copy of such verification or judgment to you. If you request, in writing, within thirty (30) days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.

On October 5, Trott took three actions. First, Trott arranged a sheriff’s sale for a Foreclosure of Mortgage by Advertisement with an auction date of November 8, 2016. Pursuant to Michigan law,^[2] Trott prepared a Notice of Mortgage Foreclosure Sale (Notice) to be posted on the premises of Scott’s home and published for four consecutive weeks in a newspaper in the county of Scott’s residence, stating the date of sale and amount of outstanding mortgage debt. Second, Trott contacted the local newspaper to schedule the home posting and the four publications of the Notice for October 7, 14, 21, and 28. The newspaper had the Notice posted on the premises on October 14. Third, Trott mailed a copy of the Notice to Scott. On October 8, Scott sent a certified letter (Dispute Letter) to Trott disputing the validity of the debt, claiming he was current on his mortgage, and that all payments had been made to BANA’s attorneys pursuant to a court order entered in the prior litigation over the delinquency of this mortgage. Trott received the Dispute Letter on October 11.

Trott claimed that after receiving the Dispute Letter it ceased collection of the debt and contacted its client BANA to confirm the debt’s validity. The Notice, however, was posted on the premises on October 14 and published in the newspaper on October 14, 21, and 28. Trott did not send Scott a verification of the debt. Scott claimed he tried to contact Trott but that it would not respond to his communications.

On October 20, 2016, Scott filed the complaint against Trott including a motion for a temporary injunction to enjoin the November 8 sheriff’s foreclosure sale. On November 4, Trott filed a response opposing the injunction, and on November 7, hours prior to the hearing on the motion for the preliminary injunction, Scott filed for Chapter 13 bankruptcy. The scheduled sheriff’s foreclosure sale did not take place, and the motion for an injunction was stayed pending verification of the debt.

Scott’s complaint against Trott alleged violations of the FDCPA (Count 1), violation of the Real Estate Settlement Procedures Act (Count 2), unreasonable collection efforts under Michigan Law § 339.918(e)(2) (Count 3), Fraud and Misrepresentation (Count 4), Intentional Infliction of Emotional Distress (Count 5), and violation of civil rights under 42 U.S.C. § 1981 (Count 6).

On December 13, the district court entered a scheduling order that, among other things, gave the parties three months for discovery, and set a jury trial for August 8, 2017. In January, Trott moved for summary judgment or for dismissal of Scott’s complaint for failure to allege sufficient facts to state a claim. In April, the district court held a hearing on the motion at which Scott argued that he did not fairly have the opportunity to make his case.

The district court found that there were no material facts in dispute between the parties and granted summary judgment on the FDCPA claim, holding that as a matter of law, the FDCPA did not require that Trott verify the debt and that Trott had “cease[d] collection of the debt” pursuant to the statute because Trott itself performed no more activity. The court dismissed Counts 2-6, holding that Scott failed to state sufficient facts or make allegations with sufficient particularity to state any claim. The district court held all outstanding discovery motions moot and dismissed the case.

Scott raises two issues on appeal. First, Scott argues that the district court erred in interpreting the language of the FDCPA and finding that Trott ceased collection of the debt. Second, Scott contends that the district court’s ruling on a summary judgment motion before all discovery motions and requests had been completed denied him a meaningful opportunity to gather facts and evidence to make his case. Scott does not appeal the district court’s order dismissing Counts 2-6 of his complaint and he therefore waives argument on those claims.

II.

We review de novo a district court’s grant of summary judgment. Rogers v. O’Donnell, 737 F.3d 1026, 1030 (6th Cir. 2013). Summary judgment is proper when the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The court must consider the evidence in the light most favorable to the non-moving party. Rogers, 737 F.3d at 1030. The record in this case demonstrates that there was no genuine dispute of material fact between the parties regarding Count 1, only a question of law. The district court ruled that, as a matter of law, the statutory language of the FDCPA’s command to “cease collection of the debt” did not require Trott to intervene and stop the actions of Trott’s agents and/or third parties that Trott put into motion prior to receiving Scott’s Dispute Letter. We find the district court erred in that determination.

The issue is a matter of first impression for this circuit. In 2013, we took the consequential step of ruling that mortgage foreclosures were “debt collection” under the FDCPA. Glazer v. Chase Home Finance LLC., 704 F.3d 453 (6th Cir. 2013). Prior to Glazer, the Sixth Circuit was among the majority of circuits that do not classify a mortgage foreclosure as debt collection, but rather an “enforcement of a security interest.” Id. at 460. In Glazer, we joined the Third and Fourth circuits in the minority that do. See Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227 (3rd Cir. 2005); Wilson v. Draper & Goldberg, P.L.L.C., 443 F.3d 373 (4th Cir. 2006).

This shift five years ago has had heightened implications for the Michigan foreclosure industry. Michigan is among the few states that permit non-judicial mortgage foreclosures. See-Mich. Comp. Laws § 600.3201 (Foreclosure of Mortgage by Advertisement). Because this non-judicial process is faster and less cumbersome for lenders, the majority of Michigan foreclosures are executed in that manner. However, Michigan’s process requires some actions that implicate the FDCPA in perhaps unexpected ways. In the aftermath of Glazer, litigation regarding the FDCPA’s requirements as they pertain to Michigan’s foreclosure industry has increased. We take this opportunity to provide some clarity.

Under Michigan law, a party executing a Foreclosure of Mortgage by Advertisement must publish a detailed Notice for four consecutive weeks in a county newspaper and post the Notice in a conspicuous place on the premises. Id.§ 600.3208. This publication of notice qualifies under the FDCPA as an “initial communication” with the debtor, 15 U.S.C. § 1692a(2). The FDCPA requires that within five days of that initial communication, the debt collector must send to the debtor a Fair Debt Letter containing specific information about the debt, its intention to collect the debt, and the debtor’s rights, unless the published notice contains that information. 15 U.S.C. § 1692g(a). That information includes the amount of the debt, the identity of the creditor, the right of the debtor, within thirty days of receipt of that notice, to dispute the validity or the amount of the debt, and the right of the debtor to notify the debt collector within that thirty-day period of its demand to obtain from the debt collector verification of the debt. Id. Finally, the FDCPA provides:

If the consumer notifies the debt collector in writing within the thirty-day period . . . that the debt, or any portion thereof, is disputed . . . the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment . . . and a copy of such verification or judgment . . . is mailed to the consumer by the debt collector. 15 U.S.C. § 1692g(b).

Scott originally claimed three violations^[3] under the FDCPA but here he appeals only one: whether Trott ceased collection of the debt after receiving Scott’s Dispute Letter on October 11 as the FDCPA requires. Scott claims that the events occurring after October 11 constitute collection activity by Trott: (1) the newspaper advertisements on October 14, 21, and 28; (2) the posting of the Notice at Scott’s home on October 14; (3) Trott’s failure to cancel the sheriff’s sale scheduled for November 8; (4) Trott’s refusal to engage in communications with Scott after October 11; (5) Trott’s November 4 response in opposition to Scott’s October 20 motion for temporary injunction.

We consider the newspaper advertisements, the home posting, and sheriff’s sale together. Scott contends that since these activities were necessary to satisfy the requirements of a Foreclosure of Mortgage by Advertisement under Michigan law, they must be construed to be continued collection activity under the FDCPA. Scott has strong grounds for this assertion. “If a purpose of an activity taken in relation to a debt is to `obtain payment’ of the debt, the activity is properly considered debt collection.” Glazer, 704 F.3d at 461. It is uncontested that these three activities are statutorily required under Michigan law. See Mich. Comp. Laws § 600.3201, § 600.3208, § 600.3216.

Trott does not address whether the activity was debt collection taken after the Dispute Letter was received, but rather claims that Trott was not the one performing the activity arguing that, “[t]he publications and posting, that Scott attempts to bootstrap to Trott, were ordered by Trott prior to the receipt of the [Dispute Letter] and were actions by third-parties other than Trott.”. The district court found this compelling, stating, “Scott has not shown, however, that these were collection activities on the part of Trott.” The court also determined that the FDCPA did not require Trott “to take any positive action to stop” third parties.

The issue before us is whether FDCPA’s requirement that a debt collector must “cease collection of the debt” after receiving a Dispute Letter required Trott to stop the subsequent newspaper publications from appearing, stop the home posting from occurring, and stop the sheriff’s sale from taking place. We find that it does. To read the FDCPA as the district court did would render the Dispute Letter a nullity.

Trott admits that it ordered the newspaper advertisements and the home posting, mailed the Notice, and scheduled the sale with the sheriff all contemporaneously on October 5. These activities set into motion all the requirements to satisfy Michigan foreclosure law and the FDCPA. Trott then claims that after receiving the Dispute Letter on October 11, it did nothing more towards debt collection. However, Trott fails to mention that there was nothing else for it to do—parties directed by Trott would continue to do everything else necessary. Ostensibly, Trott is suggesting that even though Scott sent a Dispute Letter, the foreclosure sale could have still occurred because Trott itself had “ceased.” This reading of the statute produces a result contrary to the plain intent of the FDCPA and this circuit’s case law.

Although the FDCPA contains a definitions section, it omits a statutory definition of “cease” or “collection of the debt.” Thus, we begin with a clean slate. The verb “cease” is defined in Black’s Law Dictionary^[4] as, “to stop,” “to come to an end,” “to suspend or forfeit.” Within § 1692g(b), the noun subject of the verb “cease” is the “debt collector.” The direct object of the verb “cease” is “collection of the debt.” It follows then that the statute imposes on the “debt collector” an obligation to stopthe “collection of the debt.” This is more obviously true when the debt collector has been the one to initiate the “collection of the debt.” This obligation exists only until the debt collector “obtains verification” of the debt and sends it to the debtor, after which the debt collector is free to resume collection of the debt.

The contours of “collection of the debt” are a more difficult matter to determine. As mentioned above, this circuit is breaking new ground in the application of the FDCPA to mortgage foreclosures. See, Glazer, 704 F.3d at 360. Given the vast differences between judicially managed foreclosures and non-judicial foreclosures, we cabin this holding to the latter. We find that, at a minimum, “collection of the debt” in a statutorily created process such as Michigan’s foreclosure by advertisement must include any activities that attempt to satisfy the essential statutorily required elements of that process.

This reading is congruent with our post-Glazer case law regarding the purpose of the Dispute Letter and verification requirement. Haddad v. Alexander, et al, 758 F.3d 777, 784 (6th Cir. 2014). (“The baseline for [the Dispute Letter and verification requirement] is to enable the consumer to `sufficiently dispute the payment obligation’ . . . . [S]uch an approach is consonant with the congressional purpose of the verification provision.”). The district court’s reading of § 1692g(b) would frustrate the FDCPA’s purpose of giving the debtor the opportunity to dispute the debt—the Dispute Letter would become irrelevant for Michigan foreclosures by advertisement. We therefore hold that the Dispute Letter must “stop the clock” on the initiated foreclosure. The debt collector cannot allow the essential statutory elements of a Michigan foreclosure to proceed after receiving a timely Dispute Letter until it obtains sufficient verification of the debt. This approach obviates the need to explore the activities of the debt collector’s agents or independent contractors and instead imposes on the debt collector the duty to “cease” the collection of the debt until the debt collector obtains verification of the debt.

Trott did not cease the collection of the debt after receiving Scott’s Dispute Letter. Not only did Trott not cancel the sheriff’s sale^[5] after it received the Dispute Letter on October 11, three of the newspaper advertisements were published and the home posting occurred after that date. Each of these activities was statutorily required to satisfy Michigan’s Foreclosure of Mortgage by Advertisement law. Hence, Trott’s failure to stop them after it received the Dispute Letter violated provisions of § 1692g(b) of the FDCPA.

We now consider Scott’s other claimed collection activities by Trott. Scott also complains that Trott refused to engage him when he sought clarification of the Notice. Scott cites no legal authority for the contention that Trott was required to respond to Scott’s communications. In fact, the FDCPA generally discourages and in some respects outright prohibits extraneous communications between a debt collector and a debtor. See 15 U.S.C. § 1692c. Trott was acting within the general custom of practice and requirements of the FDCPA by not communicating with Scott.

Finally, Scott alleges that Trott’s response in opposition to Scott’s motion for temporary injunction should be considered continued debt collection activity under the FDCPA. Scott does not cite, nor are we aware of, any legal principle that would allow filings made during the course of litigation to be used against the moving litigant to satisfy the elements of the alleged civil violation that precipitated the lawsuit. We decline to adopt this position now. Furthermore, opposition to an injunction to preserve an issue is fairly characterized as zealous advocacy on behalf of clients as required by Michigan’s rules of professional conduct. Mich. Prof’l Conduct R. 1.3. (CMT: “A lawyer should act with commitment and dedication to the interests of the client and zeal in advocacy upon the client’s behalf.”).

III.

We review for abuse of discretion a district court’s decision regarding the sufficiency of discovery and assessment of the relevance of discovery motions to determine whether there remain genuine disputes of material facts. Plott v. General Motors Corp., Packard Elec. Div., 71 F.3d 1190, 1196 (6th Cir. 1995). It is well established that a trial court has broad discretion to control the scope and extent of discovery. Chrysler Corp. v. Fedders Corp. 643 F.2d 1229, 1240 (6th Cir. 1981).

Scott argues that the district court erred in granting summary judgment because several discovery motions remained unresolved. However, most of Scott’s outstanding motions were presented after the expiration of the three-month discovery period set out in the scheduling order. He complains that Trott refused to comply with discovery, however, the district court determined that many of Scott’s requests were covered by privilege. After three months, Scott had still not produced evidence bolstering the allegations of his complaint with respect to Counts 2-6. It was well within the district court’s discretion to determine either that additional discovery would not lead to adducing material facts or that Scott already had sufficient discovery opportunity. The district court therefore did not abuse its discretion.

IV.

For the foregoing reasons we find that Trott violated the FDCPA by continuing collection activities after receiving Scott’s Dispute Letter. We REVERSE the district court’s summary judgment with respect to the FDCPA claim and REMAND for further proceedings consistent with this decision. We AFFIRM the remaining portions of the judgment.

[1] 15 U.S.C. § 1692.

[2] Mich. Comp. Laws § 600.3208.

[3] Scott’s Complaint asserted that the FDCPA required debt collectors to verify the debt upon receipt of the Dispute Letter and that the FDCPA required debt collectors to independently investigate the amount of debt. The district court appropriately dismissed these claims as incorrect as a matter of law. Scott did not appeal these determinations.

[4] Black’s Law Dictionary (Editorial Staff, 5th ed. 1979).

[5] We pause to note that Trott does not even allege that it made an effort, much less a good faith one, to cancel the sheriff’s sale, and had Scott’s property in fact been sold as originally scheduled, the buyer would have received voidable title. See Jackson Inv. Corp. v. Pittsfield Products, Inc., 162 Mich App. 750, 755-56 (Mich. Ct. App. 1987) (holding that a buyer receives a voidable title where there is a defect in the notice of a foreclosure sale under Mich. Comp. Laws § 600.3208). It seems obvious to us that an unnecessary and onerous legal dispute between a rightful title holder and a bonafide purchaser is precisely among the injustices Congress sought to avoid in including the Dispute Letter requirement in the FDCPA.

WFLA-

With a few clicks of the mouse, Ron McClemore bought a gorgeous, waterfront townhouse on Coquina Key.

He paid $204,000 through a foreclosure auction on the Pinellas County Clerk of Court’s website. Then came the bad news.

He had actually purchased a different property, and he overpaid.

It turns out, the bank listed the address in error on the county website.

Bank of America agreed to refund McClemore his purchase price, but refused to reimburse him for the $3,009 in fees he paid to the clerk to process the wrong deal.

[WFLA]

Obduskey v. McCarthy Holthus LLP focuses on debate about definitions of debt collector in the federal law.

ACA International-

Arguments in Obduskey v. McCarthy & Holthus LLP held Jan. 7 show the complexity of the Fair Debt Collection Practices Act when it comes to nonjudicial foreclosures and debt collectors, according to an analysis by Danielle D’Onfro, a lecturer on law at Washington University in St. Louis, on the U.S. Supreme Court’s blog .

In June 2018, the Supreme Court granted certiorari in the case, Obduskey v. McCarthy & Holthus LLP, to determine whether nonjudicial foreclosure proceedings and those who are involved in them are subject to the FDCPA, ACA International previously reported. (Members may read more background on this case on the Industry Advancement Program website.)

In November 2018, the Consumer Financial Protection Bureau filed an amicus brief  with the U.S. Supreme Court supporting that a law firm hired by a mortgage company after a consumer defaulted on a loan is not defined as a debt collector as outlined in the FDCPA, ACA International previously reported.

“This case turns on whether the FDCPA covers parties that handle nonjudicial foreclosures,” D’Onfro writes.

[ACA INTERNATIONAL]

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Inside Arm-

On Monday, the United States Supreme Court heard oral arguments in Obduskey v. McCarthy & Holthus LLP. As a brief recap, the case questions whether a law firm engaging in non-judicial foreclosure is considered a debt collector under the Fair Debt Collection Practices Act (FDCPA). The Consumer Financial Protection Bureau filed an amicus brief in this case back in November, siding with McCarthy & Holthus (McCarthy) on the issue.

The crux of the oral arguments seemed to rest on whether the FDCPA intended the exclusion of those enforcing a security interest to mean only those who do not engage with consumers. The justices asked counsel for both parties to discuss the difference between a law firm engaging in non-judicial foreclosure versus a repossessor. McCarthy’s counsel argued that there is no distinction, both are enforcing a security interest, whereas Obduskey’s attorney argued that sending a pre-foreclosure notice constitutes debt collection. Some of the justices seemed to side with Obduskey’s attorney. differentiating that repossessor only engages with the collateral “in the dark of night,” whereas a foreclosure attorney engages with the consumer by, for example, sending a pre-foreclosure notice.

In a rather unexpected turn, two of the right-leaning, pro-business justices — Chief Justice John Roberts and Justice Brett Kavanaugh — both seemed to side with Obduskey’s counsel on this question.  Since such a notice encourages payment, Chief Justice Roberts referred to it as “indirect collection.” Justice Kavanaugh, the newest addition to the Supreme Court’s bench, likewise indicated that the purpose of a foreclosure notice is to tell someone that they need to pay or they will lose their home.

[INSIDE ARM]

CNBC-

Markets are racked by turmoil, and there are signs the booming U.S. economy could slow down later this year. Yet the Supreme Court is reckoning with the lingering fallout from the financial crisis that rocked the global economy a decade ago.

The top court on Monday attempted to resolve a legal question that could have broad ramifications on hundreds of thousands of Americans who are foreclosed on without a judicial process each year. A key issue in the matter is who or what can be considered a “debt collector.”

The justices were divided, but not into clear ideological zones. Chief Justice John Roberts and Justice Brett Kavanaugh, Republican-appointed conservatives who are typically business friendly, were among the most skeptical questioners of the respondent in the case, a law firm working on behalf of Wells Fargo.

[CNBC]

Hawaii News Now-

Lexology-

In the home mortgage industry, loans insured by the Fair Housing Authority (“FHA”) come with statutory prerequisites that are embedded in the loan contracts and that must be followed prior to foreclosure. One such obligation put forth by the Department of Housing and Urban Development (“HUD”) is the “face-to-face meeting” requirement. This meeting, however, is not required in several scenarios, including when the mortgaged property is not within 200 miles of the mortgagee, its servicer, or a branch office of either.

The bounds and application of those two words – branch office – bring us to a recent opinion handed down on December 18 by the U.S. District Court for the Western District of Virginia. There, on a motion to dismiss for failure to state a claim, the Court defined a “branch office” as “one where some business related to mortgage is conducted” and dismissed the complaint with prejudice.

The borrower had brought suit claiming improper foreclosure on her home because the lender failed to offer, attempt, or conduct a face-to-face meeting prior to foreclosing on the subject property. The borrower alleged that the exemption did not apply because there was an office of the lender within 200 miles of the property. It was undisputed that this office was not open to the public and did not provide services related to mortgage origination or servicing.

[LEXOLOGY]

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