Reg X Does Not Prevent Rescheduling a Foreclosure Sale

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Reg X Does Not Prevent Rescheduling a Foreclosure Sale

Reg X Does Not Prevent Rescheduling a Foreclosure Sale

Consumer Financial Services LAW MONITOR –

The Eleventh Circuit’s most recent decision regarding Regulation X, 12 C.F.R. § 1024.1, et seq., of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601, et seq., will come as a relief to mortgage lenders and borrowers alike—although not to the individual plaintiff in Landau v. RoundPoint Mortgage Servicing Corp. Relying on the plain language of Regulation X and the consumer-protection purpose of RESPA, the Court held that a mortgage servicer is not prevented from rescheduling a previously-ordered foreclosure sale while considering a borrower’s loss-mitigation application.

Factual Background

After Rachel Landu’s mortgage became seriously delinquent, her lender filed a foreclosure action in Florida state court. In February 2016, the lender obtained a final judgment, and the court scheduled the foreclosure sale for June 2, 2016. Then, RoundPoint began servicing the loan and offered Landu a trial mortgage modification.

After Landu accepted, the original lender moved to reschedule the foreclosure sale, explaining that the loan was now “in active loss mitigation.” Landu promptly filed suit, arguing that the motion to reschedule the foreclosure sale violated both Regulation X and the Fair Debt Collection Practices Act.

[Consumer Financial Services LAW MONITOR]

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