Michigan Radio-

Michigan’s two largest counties are illegally foreclosing on thousands of properties for delinquent taxes, according to class-action lawsuits filed this month.

Wayne and Oakland counties have both foreclosed on thousands of properties for unpaid taxes in recent years.

But in doing so they’ve denied property owners their due process rights, according to the lawsuits filed in circuit courts for both counties.

Aaron Cox, an attorney for the plaintiffs, says the counties are simply not equipped with the proper infrastructure to deal with the soaring number of tax foreclosures in recent years, and comply with the 1999 state law that lays out how to deal with them.

[MICHIGAN RADIO]

Will someone please explain to me how these f*cking cartels are still in business??? I just do not get it!

Millions of Consumers Harmed by Bank’s Deceptive Marketing and Unfair Billing of Credit Card Add-On Products and Services, and Other Unlawful Practices

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) has ordered Citibank, N.A. and its subsidiaries to provide an estimated $700 million in relief to eligible consumers harmed by illegal practices related to credit card add-on products and services. Roughly 7 million consumer accounts were affected by Citibank’s deceptive marketing, billing, and administration of debt protection and credit monitoring add-on products. A Citibank subsidiary also deceptively charged expedited payment fees to nearly 1.8 million consumer accounts during collection calls. Citibank and its subsidiaries will pay $35 million in civil money penalties to the CFPB.

“We continue to uncover illegal credit card add-on practices that are costing unknowing consumers millions of dollars,” said CFPB Director Richard Cordray. “In our four years, this is the tenth action we’ve taken against companies in this space for deceiving consumers. We will remain on the lookout for similar conduct and will address it as we find it.”

Citibank, N.A. is a national bank and insured depository institution. Citibank, as well as its subsidiaries Department Stores National Bank, and Citicorp Credit Services, Inc. (USA), marketed or offered credit card add-on products to consumers nationwide. From at least 2003 through 2012, Citibank actively marketed and enrolled consumers in five debt protection add-on products: “AccountCare,” “Balance Protector,” “Credit Protection,” “Credit Protector,” and “Payment Safeguard.” These products promised to cancel a consumer’s payment or balance, or defer the payment due date, if the consumer experienced certain hardships, such as job loss, disability, hospitalization, and certain life events, such as marriage or divorce. Citibank also marketed and sold other add-on products – “IdentityMonitor,” “DirectAlert,” “PrivacyGuard,” and “Citi Credit Monitoring Services” – that offered credit-monitoring or credit-report-retrieval services. Citibank also offered “Watch-Guard Preferred,” a wallet-protection service that notified credit and debit card issuers if the consumers reported a card lost or stolen.

Deceptive Marketing

The Bureau found that Citibank or its service providers marketed these products deceptively during telemarketing calls, online enrollment, “point-of-sale” application and enrollment at retailers, or when enrolled consumers later called to cancel certain products. For example, confusing text on pin-pad offer screens at the point of sale increased the likelihood that consumers applying for credit cards at a retailer would not realize they were both applying for credit and purchasing debt-protection coverage. These illegal practices affected an estimated 4.8 million consumer accounts. Among other things, Citibank’s misleading or illegal marketing or retention practices included:

• Misrepresenting cost and fees for coverage: In some cases, telemarketers misrepresented or did not inform the consumer about the cost of the products. In certain telemarketing scripts, Citibank instructed telemarketers to claim a blanket “free” 30-day trial period, when Citibank still charged consumers during the initial 30 days of membership. In other instances, Citibank failed to inform consumers that they would be billed after the 30-day trial period if they did not cancel the product. Citibank also told some consumers they could avoid the fee by paying their balance in full by the due date. But to avoid the fee, consumers had to pay off the balance before the end of their billing cycle so that there would be no balance on the account when billing statements went out.

• Misrepresenting benefits of some products: For consumers who signed up for a credit-monitoring product, Citibank claimed the fraud alert service on credit card accounts would alert them of fraudulent purchases. In fact, the credit-monitoring product only provided alerts to changes in a consumer’s credit file maintained by major reporting companies, not at the transaction level. Citibank also misled consumers in telemarketing calls and in online marketing about the credit score benefit. It told consumers the credit score was generated from all the three major credit reporting companies, when in reality the score was generated by a third-party vendor.

• Illegal practices in the enrollment process: During telemarketing calls, Citibank’s nonbank subsidiary, Citicorp Credit Services, Inc. (USA), used illegal practices to enroll consumers in these products. That company used leading questions to obtain billing authorizations from consumers for certain add-on products. It also enrolled some consumers without any billing authorization or by construing ambiguous responses during calls for a billing authorization as permission for enrollment, and then charged consumers for the products.

• Misrepresenting or omitting information about eligibility for coverage: In some instances, consumers disclosed information to Citibank indicating that they would be ineligible for certain benefits. However, Citibank failed to inform them that they would be ineligible to receive the product benefits and still enrolled them in the product.

Unfair Billing Practices

Under federal law, in order for Citibank or its vendors to obtain consumers’ credit information to provide the credit-monitoring or credit-report-retrieval services for certain add-on products, consumers generally must authorize access to that information. In many instances, however, Citibank billed consumers for these products without having the authorization necessary to perform the credit-monitoring and credit-report-retrieval services. In other cases, Citibank or its vendors could not provide the promised services for other reasons, such as when the consumer’s information could not be found in the consumer reporting companies’ files. As a result, Citibank:

• Charged consumers for benefits they did not receive: Citibank charged consumers whose authorizations were not in order or who could not receive the credit monitoring or other benefits. The company continued to charge consumers for services they were not receiving, in some cases for the entire time the consumer had the product.

• Failed to provide product benefits: Consumers may have been under the impression that their credit was being monitored for fraud and identity theft, when, in fact, these services were either not being performed at all, or were only partially performed.

Citibank engaged in these unfair billing practices from at least 2000 through 2013. About 2.2 million consumer accounts were improperly billed product fees while not receiving the full product services.

Deceptive Collection Practices

When collecting payment on delinquent retailer-affiliated credit card accounts, Citibank offered consumers the option to pay by phone using a checking account, so the payment would post to the account on the same day. There was a $14.95 fee associated with using this option. Citibank misled consumers by not disclosing the purpose of the expedited payment fee. It misrepresented the payment fee as a “processing” fee and did not explain that the fee was to post payment to the account on the same day it was made rather than a fee to allow payment. Citibank also failed to disclose other no-cost payment alternatives. The company charged the fee even though it was rarely in the consumer’s interest to pay the fee so that the payment would post on the same day.

Enforcement Action

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions engaging in unfair, deceptive, or abusive practices, or other violations of federal consumer financial law. This is the tenth action the Bureau has taken against companies for illegal practices in the marketing or administration of add-on products and services. The CFPB’s order requires that Citibank:

• Provide $700 million in relief to roughly 8.8 million consumer accounts: Citibank must provide approximately $479 million in consumer relief to about 4.8 million consumer accounts as a result of the deceptive marketing or retention practices. It also must pay approximately $196 million to roughly 2.2 million consumer accounts that enrolled in the credit monitoring products and were charged while Citibank did not perform all of the promised services. Department Stores National Bank must provide about $23.8 million in consumer relief to almost 1.8 million consumer accounts for charging expedited payment fees on these delinquent accounts.

• Conveniently repay consumers: Citibank will reimburse consumers affected by these practices. Consumers who are eligible for a refund do not have to take any action to get their refund. For the unfair billing practices related to the credit-monitoring products, Citibank has completed reimbursement to eligible consumers. For eligible consumers who have not received refunds yet, Citibank will initiate and complete a remediation process to reimburse those consumers.

• End unfair billing practices: Consumers will no longer be billed for the credit monitoring products if they are not receiving the promised benefits.

• Cease engaging in illegal practices: Citibank is prohibited from marketing all add-on products by telephone or at the point of sale, or engaging in attempts to retain consumers in these products by telephone, until it submits a compliance plan to the CFPB.

• Pay a $35 million penalty: Citibank will make a $35 million penalty payment to the CFPB’s Civil Penalty Fund.

The CFPB is taking this action in coordination with the Office of the Comptroller of the Currency, which is separately ordering a $35 million civil penalty and restitution from Citibank and Department Stores National Bank for some of the same illegal practices.

The full text of the CFPB’s consent order is available at: http://files.consumerfinance.gov/f/201507_cfpb_consent-order-citibank-na-department-stores-national-bank-and-citicorp-credit-services-inc-usa.pdf

NYT-

When an executive at one of Wall Street’s top consulting firms testified before Congress two years ago, he stressed the importance of independence in reviewing bank misdeeds, declaring, “If we merely told our clients what they want to hear, we would lose credibility.”

A long-running New York State investigation into potential conflicts of interest at the firm, Promontory Financial Group, is now calling some of that credibility into question, according to lawyers briefed on the matter. And in an escalation of the investigation, state authorities recently subpoenaed several of the firm’s employees, including the executive who testified before Congress.

The subpoenas from New York’s financial regulator, the latest step in a two-year inquiry, require that at least six Promontory employees sit for depositions beginning on Tuesday, the lawyers said. The development signals that the investigation, which at times grew bitter as Promontory resisted the regulator’s requests for documents, has reached its final stages and could soon yield a punishment.

[NEW YORK TIMES]

The New Republic-

At the Netroots Nation convention on Friday, Senator Elizabeth Warren delivered a direct challenge to Hillary Clinton and all Democratic presidential campaigns to support legislation that would end the “revolving door” between top government positions and corporate America.

“Anyone who wants to be president should appoint only people who have already demonstrated they are independent,” Warren said to the progressive convention-goers, “who have already demonstrated that they can hold giant banks accountable, who have already demonstrated that they embrace the kind of ambitious economic policies that we need to rebuild opportunity and a strong middle class in this country.”

This is the first time Warren has decided to engage in the presidential election, which activists tried for months to get her to enter. Instead of asking candidates to endorse one of her particular policies on bank reform or student loans, Warren is focusing on the personnel who will implement those policies. It’s a notable choice that dovetails with Warren’s interest in ensuring that executive branch appointments will not tip the scales in favor of Wall Street or private industry, seen most directly in the fight to block Antonio Weiss from the No. 3 position in the Treasury Department. Warren raised the profile of Weiss, a longtime bank executive, enough for the administration to revoke his nomination.

 [THE NEW REPUBLIC]

image: AP

Columbia Law School-

There is broad agreement that predatory subprime lending – along with faulty securitization practices – were important causes of the recent financial crisis. Although the U.S. economy has improved significantly since 2008, it has not fully returned to normal, in part because the housing sector continues to lag. And while the foreclosure crisis been largely resolved in many states, other states – such as Florida, New Jersey and New York — continue to experience a high volume of foreclosures. The communities of color that were targeted for the worst subprime lending practices still experience their lingering effects. In addition, foreclosures remain cause for concern not only to immediately affected areas, but more broadly as well: they generate a host of adverse ripple effects, including declines in home prices and new home construction.

The stock of homes with mortgages in default, in foreclosure, or purchased by the lender after a foreclosure sale (REO, or real-estate-owned) and not put back on the market is called the shadow inventory. Economists generally believe that housing prices will not fully recover until the shadow inventory has been disposed of. Although investors have been purchasing foreclosed properties in more prosperous areas, driving down inventory and contributing to an upswing in housing prices, this has not occurred in many distressed markets.

Yet, in states like New York and New Jersey with judicial foreclosure systems and a large backlog of older cases, foreclosures are taking an average of more than two years to complete (though recent cases are taking considerably less time). Lately, judicial foreclosure regimes have been blamed: critics argue that judicial review creates lengthy processes that in turn only delay the inevitable. Since few borrowers can cure their arrears, some economists argue that costs outweigh benefits. Second, some blame borrowers who strategically default, although studies have found borrowers are averse to walking away, with the result that the percentage of strategic defaulters tends to be relatively low.

 [COLUMBIA LAW SCHOOL]

Decided on July 15, 2015

850039/2011
Peter H. Moulton, J.

These two foreclosure actions encompass many of the faults that plague the current system of refinancing residential property that is in default and/or in foreclosure. In this age of securitized loans, governing documents cabin discretion and flexibility, leading to the absurd result here. Like so many homeowners in the wake of the 2008 financial crisis, Lawrence and Bonnie Singer, the defendants herein, have sought to climb out of default. They have been thwarted by unresponsive loan servicers, unprepared lawyers, boilerplate form letters, and the banks’ or servicers’ often-changing and repetitive demands for financial information. Unique to these actions, the Singers have been vexed by the banks’ or servicers’ refusal to consolidate two mortgages originally secured by two apartments now combined into one.

Before the court are two tolling motions that concern two separate mortgages held by a series of lenders on two contiguous condominium apartments, apartments 400 and 401 located at 160 Wadsworth Avenue, New York, New York 10033.^[FN1] The apartments at issue were purchased separately by defendants Lawrence and Bonnie Singer (the Singers) in July 2003 and November 2004, respectively, and thereafter physically combined into a single condominium apartment now known only as Apt. 401. Action No. 1 seeks to foreclose on the mortgage on Apt. 400, while Action No. 2 seeks foreclosure on the mortgage secured by what was originally Apt. 401. Both mortgages are now owed by Federal National Mortgage Association (Fannie Mae), but are apparently serviced by two separate servicers, Seterus, Inc. (Seterus) and Bank of America, N.A. (BOA).^[FN2]

The Singers move in both actions for an order reducing the accrued compounded interest owed on both of the mortgages due to an alleged breach of a duty of good faith and fair dealing by the lenders and/or their agents in both actions. They rely on CPLR 3408, the federal Home Affordable Modification Program (also referred to as the Home Affordable Mortgage Program [HAMP]) guidelines, and the Business Conduct Rules, Banking Law Article 12-D, 3 NYCRR 419.2 and 419.11.

On July 21, 2003, the Singers purchased Apt. 400 for $235,000. They put down $23,500, and financed the balance with a mortgage from Citi-Mortgage in the amount of $188,000 and a Citibank Home Equity Loan in the amount of $23,500, for a total debt of $211,500. In November 2004, the Singers refinanced their mortgage on Apt. 400 with Countrywide Financial Corp. (Countrywide), obtaining a mortgage in the amount of $204,000 and a home equity loan in the [*2]amount of $51,000, for a total principal debt of $255,000.

In March 2005, the Singers obtained a second Citibank Home Equity Line of Credit on Apt. 400 in the amount of $90,000, allegedly for “construction costs.” On March 6, 2007, the Singers refinanced their mortgage on Apt. 400, along with the home equity loans, with Greenpoint Mortgage Funding, Inc. (Greenpoint) into a fixed rate loan at 7.375% interest for $310,000 (hereinafter, the 400-Mtge.). Greenpoint sold all of their mortgages to Countrywide/BOA in November 2008. The 400-Mtge., and its corresponding note, was assigned to plaintiff Fannie Mae by an assignment of mortgage executed on October 11, 2010.

The Singers acquired Apt. 401 on November 11, 2004. The purchase price was $220,000, and the Singers put down $22,440, and obtained a mortgage from Homebridge Mortgage Bankers Corp. in the amount of $201,960 (hereinafter, the 401-Mtge.). The 401-Mtge. was later purchased by Countrywide, which was acquired by BOA in July 2008. The 401-Mtge. is a 30-year convertible jumbo mortgage with an interest rate of 6.75% and required private mortgage insurance (PMI) of $252.45 a month. The 401-Mtge. was assigned from Mortgage Electronic Registration Systems, Inc. (MERS) to BOA on August 29, 2011. The mortgage was assigned from BOA to Fannie Mae on April 16, 2015.

Although the actual date of the construction work is not clear from the record, the Singers combined the two contiguous apartments. The Singers allege, without challenge, that the closing for the March 2007 refinancing of the 400-Mtge. was held in their apartment, which had been physically combined by that time (Singer 5/9/14 Aff., ¶ 5). The undisputed documentary evidence establishes that the necessary paperwork to combine the two tax lots and to amend the condominium’s offering plan was filed with the City of New York in September 2010. According to the architectural certification that was filed as part of the amendment to the condominium’s offering plan, the wall that separated the two apartments was opened in two places and other substantial changes to the apartments’ configuration were undertaken.

In or about the Spring of 2009, Bonnie Singer attempted to refinance the 401-Mtge. through Countrywide/BOA so that the two mortgages could be combined, a time when both loans were held by Countrywide/BOA. According to the Mortgage Loan Questionnaire the Singers submitted, the apartments were last appraised at $775,000 and the Singers requested a new loan in the amount of $515,000. This appraisal has not been submitted to the court and its date is uncertain. Although the details of this refinancing attempt are sketchy at best, it is undisputed that the Singers were denied refinancing at this time (see Singer 5/9/14 Aff., ¶¶ 6 and Ex. B attached thereto).

In December of 2009, the Singers asked a friend of theirs, Robert Feldman, Esq., for help in trying to obtain loan modifications on both mortgages from BOA (Singer 5/9/14 Aff., ¶ 8). Bonnie Singer avers that they could not get past the customer service department of BOA, who was insisting that the Singers made too much money for a modification since it was only considering each mortgage separately (id.). The Singers were told that they were not eligible for loss mitigation or modifications on either mortgage, because their monthly payment on each loan, standing alone did not exceed 31% of their combined gross income (id.). The undisputed evidence is that the Singers and Mr. Feldman made numerous unsuccessful attempts to contact BOA in December 2009 and January 2010 to avoid defaulting on their mortgages and to obtain a loan modification (id., Ex. C).

In January of 2010, the Singers stopped making payments on both mortgages after draining all their cash resources (Singer 5/9/14 Aff. ¶ 9). Bonnie Singer avers that, immediately after their [*3]default, BOA’s collection department wasted no time in harassing them for payment and they were able to talk to representatives on a daily basis, but not with anyone knowledgeable about securing a loan modification (Singer 5/9/14 Aff. ¶ 9). On January 14, 2010, Mr. Feldman wrote a letter to BOA in which he advised that the two apartments had been combined and the tax lots merged (id., part of Ex. C). In this letter, Mr. Feldman also claimed that the interest rates on the two loans were nearly usurious in the current market, and advised that the Singers could not afford to pay their monthly housing expenses, which amounted to approximately $5,000 when including both mortgages, maintenance, common charges, and taxes. Mr. Feldman further advised that Bonnie Singer had been unemployed since August 2009 and Larry Singer’s private drama coach business was suffering due to the economic downturn. It appears that the only response that the Singers or Mr. Feldman ever received was three “form” letters dated February 5, March 10 and March 17, 2010 from BAC Home Loans Servicing, LP, a subsidiary of BOA, thanking Mr. Singer for his recent correspondence, and promising a complete response in 20 days (Singer 8/15/14 Supp. Aff., Exs. 1, 2 and 3).

In July of 2010, Mr. Feldman faxed another letter to BOA literally begging the bank to file a lis pendens “as soon as possible so we may go before a Court that is capable of understanding the simple fact that these loans represent ONE APARTMENT and that the monthly loan payments GREATLY exceed 31 percent of their gross income and that they DO qualify for a loan modification” (Singer 5/9/14 Aff., part of Ex. C). This same letter was faxed eight more times between July 7 and August 11, 2010 (id.). On August 11, 2010, Mr. Feldman wrote another letter, advising that he was getting “robo calls” on his cell phone every 24 hours, and demanded to speak only to an authorized underwriter or attorney (id.). This letter was faxed again on August 16, 2010 (id.). Bonnie Singer avers that, sometime in August 2010, BOA assigned an advocate named Joana Villataro and a negotiator named Ronnie Franklin (id.; see also letter dated September 13, 2010 from Mr. Feldman to BOA Negotiator Ronnie Franklin, submitted as part of Ex. C to Singer 5/9/14 Aff). She claims that, after Mr. Franklin verbally conveyed to Mr. Feldman that BOA agreed to merge the two loans, they submitted the necessary paperwork to merge and modify both mortgages, but that neither she nor Mr. Feldman ever heard back from BOA and that they were never sent a letter of denial. Bonnie Singer further avers that they were completely ignored by Countrywide/BOA for the duration of 2010 and 2011 (id. ¶ 11). Notably, Bonnie Singer submits no documentary proof that BOA ever agreed to “merge” both mortgages, nor does she offer any testimonial evidence from Mr. Feldman to support her statements.

BOA’s counsel claims that BOA sent the Singers a letter on or about March 10, 2010 advising them that they may be eligible for HAMP (Burlingame 7/14/14 Affirm., ¶ 16). This letter is allegedly attached to counsel’s affirmation in opposition as Exhibit E. However, the only March 10, 2010 letter attached as Exhibit E is a letter that has the same content as the form letter dated March 17, 2010, thanking Mr. Singer for his recent correspondence, and promising a complete response in 20 days. There is no evidence in the record that BOA offered the Singers an opportunity to apply for a HAMP modification in March of 2010, or that it was considered, denied and the Singers’ given written notification of the grounds for a denial.

However, BOA admits that, on November 5, 2010, it spoke to Mr. Feldman about the Singers’ loan modification request (Burlingame 9/18/14 Supp. Affirm., Ex. A: Affidavit of Lorena P. Diaz sworn to on September 18, 2014 [Diaz Aff.], ¶ 4). According to Ms. Diaz, BOA’s business [*4]records show that Mr. Feldman claimed to have already worked out a modification with Ronnie Franklin, but that BOA insisted that there was no way to provide the Singers with an affordable payment plan based on the mortgagors’ deficit income of $5,864.00 per month and that they did not qualify and did not meet the guidelines for a loan modification (id., ¶¶ 4-5).^[FN3] Mr. Feldman was advised that BOA was removing the file from consideration of “traditional loan modification” based on the financial information provided, and the loan was returned to “normal servicing” (id., ¶¶ 6, 7).

On June 14, 2011, the law firm of Stephen J. Baum, P.C. (the Baum firm) commenced Action No. 1 to foreclose on the 400-Mtge. The complaint reflects that the mortgaged premises is “160 Wadsworth Avenue, Part of Unit 401 f/k/a [formerly known as] Unit 400.” The complaint further indicates that the property is “Block 2164 Part of Lot 1101 f/k/a Block 2164, Lot 1100.” Thus, the complaint reflects the Singers’ consistent position- – that they live in one apartment, not two. The Singers filed their Verified Answer and Counterclaims on August 31, 2011. On November 22, 2011 (three months later), the Baum firm filed a Request for Judicial Intervention (RJI) requesting the scheduling of a residential mortgage foreclosure settlement conference. Thereafter, the Baum firm was forced to close its doors after being blacklisted by Freddie Mac and Fannie Mae for allegedly engaging in faulty and fraudulent foreclosure practices. At some point the law firm of Rosicki & Associates P.C. (the Rosicki firm) was substituted as counsel for the Baum firm.^[FN4] At that time, no legal action had been taken with respect to the 401-Mtge., although the Singers continued to receive monthly invoices regarding the 401-Mtge. with late fees adding up until January of 2012, when they stopped receiving any invoices from BOA (Singer 5/9/14 Aff. ¶¶ 12-14).

On January 26, 2012, the law firm of Frenkel Lambert Weiss & Gordon LLP (the Frenkel firm) sent the Singers a letter advising that they represented BOA, that the 401-Mtge. was in default, and that the outstanding balance was $230,175.20 (Singer 5/9/14 Aff., part of Ex. F). Bonnie Singer avers that they did not respond to the Frenkel firm’s letter as they still hoped the mortgages could be merged thereby resolving all the default issues (id. ¶ 14). The firm did not file a foreclosure action until July 18, 2013 (discussed infra).

In March of 2012, the Singers started to represent themselves, pro se. The first of many mandatory settlement conferences was scheduled on March 14, 2012. Presumably due to the failure of the Rosicki firm to file a notice of appearance, written notice of the conference was sent to the Baum firm and there was no appearance for plaintiff Fannie Mae. The conference was adjourned to May 2, 2012, another month and one-half delay. Although both sides appeared, no progress was made. However, the parties discussed with the court mediator that one possible solution would be [*5]to “merge” or “recast” the two mortgages since the investor on both mortgages was Fannie Mae. The following day, May 3, 2012, Bonnie Singer wrote a letter to the Rosicki firm requesting that this be done (Singer 5/9/14 Aff., part of Ex. C).

The Rosicki firm did not respond. Two more court conferences were held on June 2, 2012 and July 12, 2012. Each time, a different attorney from the Rosicki firm would appear, without any knowledge of the case and without any settlement authority.^[FN5] At this point the conference was adjourned to August 14, 2012, and my court attorney directed via email that the Rosicki firm email responses to the following queries: (1) would Fannie Mae agree to consolidate the mortgages and refinance since it owns both; (2) whether Seterus (the servicer of the 400-Mtge) could also service the 401-Mtge. so that only one servicer would be assigned to both mortgages; and (3) what documents were needed for the Singers to apply for a loan modification of the 400-Mtge.

Iyanna Grisson, Esq. of the Rosicki firm responded by email dated July 26, 2012, insisting that: (1) consolidation of the two loans was not an option, but without explaining why; (2) the servicer on the 401-Mtge. could not be changed to Seterus; and (3) insisting that Fannie Mae would be able to foreclose on Apt. 400 despite the physical combination of the two apartments. As for applying for a loan modification, the Singers were advised to complete and submit to Tammera Wells, a paralegal at the Rosicki firm, the attached modification package along with “copy of one month’s most current paystubs, two month’s most current bank statements; year-to-date P & L statement if self-employed, signed 2010 and 2011 tax returns signed and dated.”

At that point, the court ordered the Singers to submit the required loan modification documents to the Rosicki firm by August 1, 2012, and that the latter advise of the need for additional documents no later than August 13, 2012. Although the Singers attempted to submit the requested documentation for a loan modification, their submission was initially deficient. For example, the 2010 tax return was not signed and the Rosicki firm claimed that the Singers did not submit a return for 2011 (disputed by Bonnie Singer). However, the Rosicki firm also began to change the parameters of its requests. For example, although the July 16, 2012 email from Iyanna Grissom asked for “[t]wo months most current bank statements,” on August 2nd, she was insisting that the Singers provide “most current and consecutive 3 months of bank statements for ALL accounts, personal and business, with income deposits circled and labeled; no online statements accepted.” Likewise, no mention was made of the need to submit IRS Form 4506 in the earlier email, yet two weeks later, Ms. Grissom was insisting on these documents. On August 6, 2012, paralegal Tammera Wells confirmed that the documents received from the Singers had been sent to the lender on August 2 and 3, 2012 for review. Yet, by letter dated August 7, 2012, yet another paralegal at the Rosicki firm was demanding additional information be provided (some of which, like the IRS Form 4506, had clearly already been submitted by the Singers), and was asking that new forms be filled out (Singer 5/9/14 Aff., part of Ex. C). This same paralegal emailed Bonnie Singer on August 21, 2012, claiming that Fannie Mae was having “great difficulty” locating the 401-Mtge., even though the information is on Fannie Mae’s website and on ACRIS.

By email dated August 2, 2012, the court directed the appearance of a Fannie Mae representative (in addition to Seterus) at the next court conference scheduled on August 14, 2012. Two days prior to the scheduled conference, the Rosicki firm advised the court that Fannie Mae was still determining “the best person to appear on this case based on the issues presented,” and that no one was available for the conference scheduled on August 14th. More delay ensued. The court agreed to adjourn the matter to early September 2012, but despite diligent efforts on the part of my court attorney, the court could not get the parties and a Fannie Mae representative back in court until October 25, 2012.

In the meantime, no determination had been made by Fannie Mae on the loan modification requested by the Singers and, in early October 2012, the Rosicki firm began asking for “updated documents” so that the bank could complete its review of their loss mitigation application. The bank thus created another moving target. The Singers objected, claiming, and rightly so, that they submitted all of this documentation back in August and that they had been waiting for Fannie Mae to provide a date when one of its representatives could be available for a court conference. Finally, the court scheduled a conference on October 25, 2012 at 2:15 p.m. Edward Rugino, Esq. of the Rosicki firm responded that day, stating that the representative with whom he had worked had just left employment with Fannie Mae and that he was given the name of another contact at Fannie Mae, and that he was attempting to fix a date for the court appearance. Mr. Rugino also insisted that the financial documents Bonnie Singer produced in early August were now two months stale, and the underwriter needed the updated information to complete its review. Ever mindful of the moving target problem, but striving to obtain an acceptable loan modification for the 400-Mtge., by email dated October 10, 2012, the court directed the Singers to provide the documents needed to update their application, but that the court stood firm on the October 25, 2012 conference.

Finally, by letter dated October 11, 2012, Seterus advised the Singers, that they “were unable to approve your request for a permanent loan modification under [HAMP], because your current payment . . . does not exceed 31% of your gross monthly income which is a requirement of the program” (Rugino 7/14/14 Affirm., Ex. B). Presumably, the calculation did not include the expenses of the mortgage which is the subject of Action No. 2. The letter goes on to say that the Singers might be eligible for a “Fannie Mae Loan Modification,” and proposes a “Trial Period Plan,” whereby three payments of $1,724.96 must be made by 11/1/12, 12/1/12 and 1/1/13. The letter states that the trial period payment is “approximately 24% of your total gross monthly income” of $10,802.00 based on documentation previously provided. The Singers promptly accepted this proposed trial plan and made the first required payment.

By email dated October 16, 2012, Edward Rugino of the Rosicki firm advised that Fannie Mae had finished researching the Singers’ request (made more than five months earlier) to “merge” the two mortgages into a single mortgage loan.^[FN6] Mr. Rugino advised that, per Fannie Mae, the request could not be granted since there are two separate mortgages encumbering two different parcels of real property, and that the only thing that could be done was to create an entirely new loan, [*6]but that Fannie Mae cannot issue new loans. “[T]he only way for the mortgagors to accomplish their desired result would be for [the] mortgagors to refinance the two mortgage loans with an authorized mortgage lender.” Mr. Rugino also claimed that merging the two mortgages would create major liability-related problems since the two mortgages were purchased from a different seller. He further claimed that the Singers’ action in combining the two apartments without notice or prior approval of either lender:

“was a breach and violation of both mortgage contracts, potentially compromising the security position of Fannie Mae in the properties and certainly complicating any foreclosure proceedings and subsequent disposition of the properties. The mortgage documents were intended to prevent such unilateral activity by the mortgagors and, as far as FNMA is concerned, it makes no sense for mortgagors to benefit from such activity performed in violation of both of the mortgage contracts, or for the court to condone such inappropriate activity.”

Mr. Rugino’s email went on to state that, while Fannie Mae cannot combine the two mortgages, it was willing to offer the Singers a trial payment plan for the 400-Mtge., the essential terms being:

“Loan Term: 322 months

Unpaid Principal Balance: $301,686.17

Balloon Amount: $0.00

Note Rate: 2.00%

Monthly Payment (PI): $1508.14

Monthly Tax & Insurance Payment: $202.90

Monthly HOA Payment: 869.45

Monthly Payment (PITIAS) $2594.41

Monthly MI Payment: $0.00

Trial First Payment Due Date: 11/01/2012″

Mr. Rugino’s email clearly advises that the terms are subject to change upon completion of the trial modification. Although Mr. Rugino insisted that this was not a HAMP modification, the 2% initial interest rate certainly mimicked HAMP.

On October 25, 2012, the court conducted yet another settlement conference. Christian Rudolph, a Portfolio Manager for Fannie Mae’s National Servicing Organization attended the conference. Rather than contribute to the process, he merely deferred to Seterus on all matters. It was suggested that the Singers attempt a loan modification on the 401-Mtge. through the Frenkel firm and submit proof of the current modification that had just been worked out on the 400-Mtge.

On or about November 2, 2012, the Frenkel firm sent the Singers a loan modification application for completion (Burlingame Affirm. and Ex. G). By letter dated November 15, 2012, the Singers were notified by BOA that a dedicated Customer Relationship Manager by the name of Anne Lacava had been assigned to their loan (id.). Bonnie Singer alleges that she submitted all of the required documentation within 48 hours (Singer 5/9/14 Aff. ¶ 20). Indeed, by letter dated November 20, 2012, BOA sent a form letter regarding the 401-Mtge. acknowledging receipt of the Singers’ loan modification request and promising a response when the necessary information was reviewed, which included proof that the Singers were already approved for a Fannie Mae trial modification (Burlingame 7/14/14 Affirm., ¶ 19 and Ex. G). Bonnie Singer avers that, even though [*7]BOA promised to expedite the process, they stopped responding in a few weeks and then never responded again until the Singers received a foreclosure notice in Action No. 2 (Singer 5/9/14 Aff. ¶ 20).

After BOA’s November 20, 2012 letter, counsel asserts that (without reference to any documents or BOA’s business records) “[a]lthough the Defendants provided many documents for the loan modification review, they still did not qualify for a loan modification” (see Burlingame 7/14/14 Affirm. ¶ 19). In counsel’s supplemental affirmation, she attaches two “form letters” from BOA dated February 6 and 23, 2013 (Burlingame 9/18/14 Supp. Affirm., Exs. B & C thereto). The February 6, 2013 letter requested tax returns, pay stubs and HOA documentation, all of which had previously been requested by the Frenkel firm back in November 2012. The letter dated February 21, 2013 merely suggests that the Singers commence the loan modification application process all over again by submitting, for example, the same “Uniform Borrower Assistance Form” attached to the Frenkel firm’s November 2, 2012 letter (compare Exs. G and and I to Burlingame 7/14/14 Affirm.). There is also no documentary support for counsel’s unsupported claim that the Singers’ HAMP application was denied on or about April 2, 2013 “for incomplete application.” If it was, the Singers apparently were never notified of the same.

In the meantime, the Singers had made all three trial payments on the 400-Mtge. by December 18, 2012, and were anxiously awaiting the permanent loan modification papers from Seterus. On January 2, 2013, Seterus sent a letter to the Singers advising that they were pleased to offer them “a Loan Modification Agreement and Escrow Agreement.” According to the proposed agreement, the Singers owed $374,811.61 as of that date as the “Unpaid Principal Balance” (Rugino Affirm., Ex. C thereto). The letter explained that the interest rate on the loan would be 2% interest for first 5 years, with initial monthly payments of $1,726.08, 3% for the 6th year, and 3.375% for the years 7-27, with an October 1, 2039 maturity date (id.). Although not broken down in the letter from Seterus, Mr. Rugino later advised by email in mid-February 2013 that $63,632.21 of the loan amount was accrued interest and $5,605.23 represented the escrow deficiency as of December 18, 2012.

By email dated January 15, 2013, Bonnie Singer objected to the permanent loan modification offered by Seterus and claimed it was not what had been agreed to in court and not what Fannie Mae’s lawyer, Edward Rugino, had proposed via his October 16, 2012 email, which was a loan balance of only $301,686.17. The Singers also objected to the permanent loan modification being offered by Seterus, claiming that the escrow deficiency was incorrect and that the payment of real estate taxes on Apt. 400 should have ceased after the date the two units were combined. Seterus’s investigation into the tax payments revealed that it had in fact been erroneously making tax payments on a different unit in the same complex commencing with the December 2011 payment, and the investigation also uncovered some other discrepancies (8/7/13 Burden Aff., attached to Iraci letter dated August 15, 2013). By letter dated October 28, 2013, Seterus advised the Singers that they were being offered a loan modification agreement on the same terms as the January 2013 proposed loan modification agreement, but that the new “Unpaid Principal Balance” was $380,281.61, of which $81,341.90 represented capitalized interest from their default through November 1, 2013 (Rugino Affirm., Ex. D thereto).^[FN7]

In the meantime, for reasons which have never been explained to the court, it was not until July 18, 2013 that the Frenkel firm commenced Action No. 2 on BOA’s behalf seeking foreclosure on Apt. 401.^[FN8] At this point, the Singers retained legal counsel, and, on August 30, 2013, an answer was filed in Action No. 2 on the Singers’ behalf by Paul Kerson, Esq. of the Law Offices of Leavitt & Kerson. On September 27, 2013, Mr. Kerson filed a motion in Action No. 2 (seq. no. 001) to consolidate the two foreclosure actions.^[FN9]

At this point, the court ordered that a settlement conference be held in both actions, directing that representatives from both servicers attend the conference. An unsuccessful conference was held on December 9, 2013, when counsel for BOA failed to appear. On January 1, 2014, Mr. Kerson sent a written proposal in response to Seterus’s proposed loan modification agreement on the 400-Mtg., advising that the Singers were unwilling to pay the $81,000 in accrued interest, and Mr. Kerson proposed a total interest payment of $18,000. After numerous requests by my court attorney for a response from counsel for Fannie Mae, the court directed another conference on April 25, 2014 to be attended by both lenders with a representative with authority to settle. This was the last court conference on these matters, and thereafter the matters were adjourned without date. Counsel for the Singers advised that he intended to bring the instant motion to bar interest on both mortgages. Fannie Mae offered a loan modification on the 400-Mtge. whereby the Singers would pay $1,992.00 per month towards their mortgage arrears, but no interest would be tolled for delay. Counsel for BOA advised that the Singers were in the process of submitting yet another loan modification request, but claimed that their counsel had been advised that the loan application package was incomplete and that additional financial information was needed.

By letter dated April 28, 2014, counsel for the Singers attempted to accept Fannie Mae’s offer, but with the proviso that the Singers have a right to offset any interest payments if they are reduced by the court in response to his planned motion to bar interest payments. By email dated May 6, 2014, Mr. Rugino advised that Fannie Mae:

“will be withdrawing its loan modification offer very soon unless accepted and brought current in the immediate future. FNMA further stated that, if mortgagor would like to pursue further litigation with regards to Tolling’ of interest, that is their prerogative, but FNMA would not sign any affidavits or agreements pertaining to said anticipated litigation and the offered loan modification.”

Thus, the Singers were presented with the dilemma of either agreeing to an amount that they did not believe was due and owing, in order to save the modification or, forego the modification in lieu of filing tolling motions. They choose to file the motions and accordingly any future attempts to obtain loan modifications ceased.

DISCUSSION

Before addressing the merits of the motions, the court notes that this motion was initially brought, by order to show cause, in Action No. 2 as motion sequence 002, but with a double caption. On July 30, 2014, as directed by my court attorney, counsel for the Singers attempted to e-file a copy of the order to show cause in Action No. 1 (see ECF Doc. 23), but the papers were “rejected returned for correction.” By letter dated September 17, 2014, counsel for Fannie Mae objected to the fact that the signed order to show cause was never e-filed in Action No. 1 (see ECF Doc. 38). Nevertheless, counsel for Fannie Mae e-filed opposition papers to what he deemed an “unfiled motion,” and the motion was fully briefed and argued before the court. Accordingly, since the court has the power to disregard such technical defects or irregularities (CPLR 2001), the motion is considered. The court directs the E-Filing Resource Center (Rm. 119A) to e-file a copy of the May 20, 2014 order to show cause in Action No. 1, under motion sequence no. 001, upon proof of payment of the appropriate motion fee by the Singers which shall be paid within 7 business days of today’s date. Mr. Kearson, as an attorney who practices in New York County, should know how to file and e-file documents, and should not further disregard the directives of the court.^[FN10]

Turning to the merits,3 NYCRR 419.2 establishes a “duty of good faith and fair dealing” by mortgage loan servicers in connection with their transactions with borrowers. This duty requires that servicers “make borrowers in default aware of loss mitigation options and services offered by the servicer in accordance with section 419.11” (3 NYCRR 419.2 [e]). This duty also requires servicers to “provide trained personnel and telephone facilities sufficient to respond promptly to borrower inquiries regarding their mortgage loans” (id., 419.2 [f]), and to “pursue loss mitigation with the borrower whenever possible in accordance with section 419.11” (id., 419.2 [g]). Part 419.11 creates an obligation on the part of servicers to make reasonable and good faith efforts to pursue appropriate loss mitigation options, including loan modifications as an alternative to foreclosure. Notably, section 419.11 (d) requires that servicers must complete their review of a borrower’s eligibility for a loan modification or other loss mitigation options and advise the borrower or their representative of the determination in writing within 30 days of receiving all required documentation. Finally, section 419.11 (i) creates a good faith presumption on the part of servicers if they offer loan modifications in accordance with HAMP guidelines.

While these banking regulations create a duty on the part of lenders that arises once a default occurs, CPLR 3408 requires mandatory settlement conferences in certain mortgage foreclosure actions once a mortgage foreclosure action has been commenced. CPLR 3408 (a) and (f) read, in pertinent part, as follows:

“(a) In any residential foreclosure action involving a home loan . . . in which the defendant is a resident of the property subject to foreclosure, the court shall hold a mandatory conference . . . for the purpose of holding settlement discussions pertaining to the relative rights and obligations of the parties under the mortgage loan [*8]documents, including, but not limited to determining whether the parties can reach a mutually agreeable resolution to help the defendant avoid losing his or her home, and evaluating the potential for a resolution in which payment schedules or amounts may be modified or other workout options may be agreed to, and for whatever other purposes the court deems appropriate.

…..

(f) Both the plaintiff and defendant shall negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible.”

To conclude that a party failed to negotiate in good faith pursuant to CPLR 3408 (f), a court must determine that “the totality of the circumstances demonstrates that the party’s conduct did not constitute a meaningful effort at reaching a resolution” (US Bank N.A. v Sarmiento, 121 AD3d 187, 203 [2d Dept 2014]). Following the adoption of CPLR 3408, the Chief Administrator of the Courts promulgated regulations setting forth the rules and procedures governing CPLR 3408 settlement conferences (see 22 NYCRR 202.12—a). This regulation requires that “[i]f the parties appear by counsel, such counsel must be fully authorized to dispose of the case” (22 NYCRR 202.12-a [c] [3]).

Fannie Mae argues that the Singers’ request to toll interest from January 2010, the date of their default, is “drastic and draconian relief,” and that a court of equity may not toll interest due on a mortgage in default out of sympathy for the homeowners. Likewise, BOA contends that the “stability of contract obligations must not be undermined by judicial sympathy,” quoting Emigrant Mtge. Co., Inc. v Fisher (90 AD3d 823, 824 [2d Dept 2011] [internal quotation marks and citations omitted]). While is it true that a court may not “rewrite” the parties’ agreement (see e.g., Wells Fargo Bank, N.A. v Meyers, 108 AD3d 9, 17 [2d Dept 2013]), it would be nonsensical for there to exist no suitable remedy for violations of CPLR 3408 (f), or for there to exist no suitable remedy where a plaintiff lacks good faith and files an action seeking equitable relief (such as in mortgage foreclosure cases). Foreclosure is an equitable remedy which triggers the equitable powers of the court (Notey v Darien Constr. Corp., 41 NY2d 1055 [1977]; Norwest Bank Minn., NA v E.M.V. Realty Corp., 94 AD3d 835, 836 [2d Dept 2012]).

To the contrary, courts are authorized to impose sanctions for violations of CPLR 3408 (f), and one such sanction is the barring of interest on the loan for the period of time that the servicer acted in bad faith and unduly prolonged the foreclosure proceedings (see U.S. Bank N.A. v Smith, 123 AD3d 914 [2d Dept 2014] [mortgagee barred from collecting interest on mortgage for 9-month period]; US Bank N.A. v Williams, 121 AD3d 1098 [2d Dept 2014] [court canceled all interest accrued on the subject mortgage loan between the date of the initial settlement conference and the date that the parties agreed to a loan modification]; US Bank N.A. v Sarmiento, 121 AD3d at 200 [interest tolled from date mortgagor began placing $2,000 per month in an escrow fund, at the court’s direction]; see also Bank of America N.A. v Lucic, 45 Misc 3d 916 [Sup Ct, NY County 2014]; U.S. Bank, N.A. v Shinaba, 40 Misc 3d 1239[A], 2013 NY Slip Op 51484[U] [Sup Ct, Bronx County 2013]; Wells Fargo Bank, N.A. v Ruggiero, 39 Misc 3d 1233[A], 2013 Slip Op 50871[U] [Sup Ct, Kings County 2013]; Deutsche Bank Trust Co. of Am. v Davis, 32 Misc 3d 1210[A], 2011 Slip Op 51238 [Sup Ct, Kings County 2011]). Because foreclosure is an equitable remedy which triggers the equitable powers of the court (Notey, 41 NY2d 1055 supra; Norwest Bank Minn., NA, 94 AD3d at 836, supra), courts have not hesitated to toll interest when it is an appropriate remedy for a [*9]mortgagee’s unconscionable delay in prosecuting foreclosure actions (see Dayan v York, 51 AD3d 964 [2d Dept 2008]; Danielowich v PBL Dev., 292 AD2d 414 [2d Dept 2002]; Dollar Fed. Sav. & Loan Assn. v Herbert Kallen, Inc., 91 AD2d 601 [2d Dept 1982]; South Shore Fed. Sav. & Loan Assn. v. Shore Club Holding Corp., 54 AD2d 978 [2d Dept 1976]).

At least two courts have tolled interest back to the date of the borrower’s default. In Emigrant Mortg. Co. v Corcione (28 Misc 3d 161 [Sup Ct, Suffolk County April 16, 2010]), in addition to assessing the bank $100,000 in exemplary damages for failing to act in good faith during the settlement conferences, the court also barred the bank from collecting any interest from the date of default in May 2008 to March 2010, noting that the bank offered no explanation for the 14-month delay between default and suit.^[FN11] And in HSBC Bank USA v McKenna (37 Misc 3d 885 [Sup Ct, Kings County 2012]), the court found that the bank acted in bad faith in refusing to agree to a short sale of the mortgaged property and, as a consequence, could not recover interest from the date of the mortgagor’s default.

Both Fannie Mae and BOA argue that, even if their servicers violated Part 419, these regulations do not provide the Singers with a private cause of action for any violations, and that the sole remedy is the imposition of fines and penalties on servicers by the Superintendent of the Banking Department, citing Banking Law § 595-b (1) and 3 NYCRR 418.10. Assuming that to be true, and mindful that communications between a loan servicer and the mortgagors after their initial default (but prior to an appearance in the settlement part) “cannot be the basis of a violation of CPLR 3408(f)” (Deutsche Bank Natl. Trust Co. v Izraelov, 40 Misc 3d 1238[A], *4, 2013 Slip Op 51482[U] [Sup Ct, Kings County 2013], citing Wells Fargo Bank, N.A., 108 AD3d at 17, supra), tolling interest prior to the settlement conference may be appropriate as a matter of equity.

Counsel for both lenders argues that the physical and legal combination of the two apartments by the Singers, without notice or prior approval by the lenders, was a breach of the mortgage contracts. This is not the case. Counsel has never identified what provision of each mortgage was violated. A full copy of the 400-Mtge. has never been filed with the court (see Rugino 7/14/14 Affirm., Ex. A [attaching only pages 1, 2 and 16 of the 400-Mtge.]). However, it appears to be the same form as the 401-Mtge. (i.e., “NEW YORK – Single Family – Fannie Mae/Freddie Mac UNIFORM INSTRUMENT – MERS Form 3033 1/01”). This mortgage, in section 7 (a) thereof, states only that the borrower may not “destroy, damage or harm the Property” or “allow the Property to deteriorate” (see Tarab 11/11/13 Affirm., Ex. A). There is no language that restricts a borrower from making physical improvements or structural changes to the premises or requires prior notice to, and approval by, the lender for such changes.^[FN12] Thus, the Singers did not act in bad faith or in [*10]derogation of the mortgage in physically combining two contiguous apartments. In fact, it appears that the combination was legally permitted under the mortgages, without notice to, or prior approval of, the lenders. The Singers assert, without contradiction, that the value of Apt. 401 has substantially increased. There is no evidence or argument regarding how the property was destroyed, damaged, harmed or allowed to deteriorate.

Fannie Mae also argues that there is no basis to toll interest in Action No. 1 pursuant to CPLR 3408, because its servicer negotiated in good faith during the course of the CPLR 3408 conferences and because the Singers were offered a trial loan modification in October 2012 even though they did not qualify for HAMP. Fannie Mae also contends that, even though there was an inadvertent calculation error regarding the escrow amounts, the error was corrected and thereafter the Singers refused to accept the revised loan modification plan offered in October 2013 arguing over payment of the capitalization of accrued interest.

The court disagrees with plaintiffs’ positive assessment of the negotiations. It is belied by the history recited above. To summarize:

Fannie Mae delayed filing of Action No. 1 (filed on June 14, 2011) 17 and 1/2 months after the date of default. Counsel then delayed filing the RJI for another three months after the answer was filed. The first settlement conference, scheduled on March 14, 2012, had to be rescheduled to May 2, 2012 due to Fannie Mae’s non-appearance, a one and one-half month delay. It took Fannie Mae and its counsel another five and 1/2 months to provide an explanation for why the two mortgages could not be merged or consolidated, and only after wasting time at two conferences in June and July attended by attorneys without knowledge of the case or settlement authority and only after my court attorney probed for answers. Thereafter, the Singers submitted the requested documentation for a loan modification of the 400-Mtge., despite confusing and conflicting requests by the Rosicki firm, by August 3, 2012. When that application became “stale,” the court directed the Singers to update the information and, finally, after another two-month delay, Seterus offered the Singers a trial modification plan on or about October 11, 2012. When the Singers received the permanent loan modification papers from Seterus in January 2013, they objected to the

payment of $63,632.21 in accrued interest and the $5,605.23 accrued interest.^[FN13] It took many months for Seterus to admit its mistake on the escrow deficiency, and only after much prodding by the court for status updates.^[FN14] Seterus did not offer the Singers a new loan modification agreement until the [*11]very end of October 2013 — a whopping nine-month delay. Finally, it took Fannie Mae’s counsel another five months to reject the Singers’ January 1, 2014 counteroffer to pay $18,000 of the accrued interest.

Accordingly, the court holds that Fannie Mae and/or its counsel have acted in bad faith and have unreasonably delayed a resolution of this foreclosure action. As a result, interest should be tolled on the note and mortgage in the amount over and above 2% annually, for the period from September 30, 2011 (one month after Singers’ filing of their answer in Action No. 1) through the date of this Decision and Order.^[FN15]

Similarly, BOA contends that there is no basis to toll interest and asserts that it has negotiated with the Singers in good faith to offer them a loan modification on the 401-Mtge., both prior to and after the commencement of Action No. 2. BOA’s counsel claims that: (1) there is no evidence that BOA acted in bad faith in denying the Singers’ 2009 refinancing application, and that, in any event, it predated the enactment of Part 419; (2) the bank offered the Singers a HAMP loan modification in March 2010, but they did not qualify based on their finances; (3) the Frenkel firm sent the Singers a second loan modification application in November 2012, which was denied in April 2013 for incompleteness; (4) BOA did negotiate in good faith with the Singers during and since the initial CPLR 3408 conference in Action No. 2, first held on April 25, 2014; and (5) that, again due to the Singers’ failure to complete the loan modification application process, their applications were denied on May 29, 2014.

Part 419 was not enacted until August 18, 2010, and did not become effective until October 1, 2010, thus these regulations were not in place when the Singers attempted to refinance the 401-Mtge. with BOA to consolidate the two loans. There is no evidence that BOA acted in bad faith in denying the 2009 refinancing application. According to the Singers’ own profit and loss statement, as of December 2008, the Singers’ total income was $106,071.76, and total expenses was $136,253.22 (Singer 5/9/14 Aff., part of Ex. B).^[FN16]

However, the Singers and Mr. Feldman made repeated attempts to contact BOA, who held both mortgages at that time, to obtain loan modifications, but they were told in 2010 that their monthly mortgage payment, standing alone, did not exceed 31% of their combined gross income (the same claim made by Fannie Mae in rejecting the Singers’ request for a HAMP modification in 2012). This was incorrect since, one of the four basic requirements for HAMP eligibility, is that “[t]he borrower’s monthly mortgage payment (including principal, interest, taxes, insurance, and when applicable, association fees, existing escrow shortages) prior to the modification is greater than 31 percent of the borrower’s verified monthly gross income” (see Making Home Affordable® Handbook for Servicers of Non—GSE Mortgages, Version 4.1, ch. 2, § 1.1.2 at 69 [HAMP Tier 1 Eligibility Criteria]). Indeed, according to “Exhibit A: Model Clauses for Borrower Notices,” what is to be considered is the borrower’s “currently monthly housing expense . . . on your first lien mortgage loan plus property taxes, . . .” (id., Ex. A at 207). Since the 400-Mtge. and the 401-Mtge. are both “first liens” on the mortgaged premises, the monthly payments under both loans should have been considered in determining whether the Singers’ “monthly housing expense” exceeded 31% of their gross monthly income. Although Fannie Mae’s counsel argues that HAMP “expressly provide[s] for the modification of two mortgages separately when a property is encumbered by two different mortgages” (Rugino 7/14/14 Affirm ¶¶ 18, 20), his reference is to the Second Lien Modification Program, discussed in Chapter V of the Handbook which relates to subordinate loans (i.e., an equity loan, a HELOC or any “mortgage lien that would be in second lien position but for a tax lien, a mechanic’s lien or other non-mortgage related lien that has priority”). It is beyond dispute that neither Fannie Mae nor BOA would take the position that its mortgage is subordinate to the other’s mortgage.

Further, while BOA’s counsel claims that the Singers were advised in March 2010 that they might be eligible for a HAMP modification of the 401-Mtge., no evidence to support that statement has been offered. The only evidence is that the Singers were considered for a traditional loan modification and, that Mr. Feldman was orally advised on November 5, 2010 that they had been denied based on their financial situation, and that their loan was “returned to normal servicing” (see Diaz Aff., ¶¶ 6, 7), even though it had been in default for over 10 months. And for the next two years, the 401-Mtge. appears to have fallen into a black hole, despite the fact that my court attorney inquired about the status of BOA’s foreclosure filing at nearly every conference with the Singers and the Rosicki firm. With the exception of sending a default letter in January 2012, BOA took no further action with respect to the 401-Mtge. until November 2012, when the Frenkel firm sent, at the Singers’ request, a loan modification application. However, despite the Singers’ good faith attempt to obtain a loan modification for the 401-Mtge. from BOA at that time, their request was never properly addressed, allowed to lapse and go stale, and then ignored. It was not until July 18, 2013, that the Frenkel firm commenced Action No. 2, creating another lengthy delay with interest at the [*12]rate of 6.75% racking up. And due to BOA’s non-appearance at the December 9, 2013 scheduled conference due to “inclement weather and emergencies” (Burlingame 7/14/14 Affirm., ¶ 21), the first joint settlement conference in both actions could not be held until April 25, 2014. BOA failed to timely and properly process the Singers’ 2010 request for a loan modification, refused to consider the Singers’ total housing expenses and delayed commencement of the foreclosure action to the prejudice of the Singers, who had already been found eligible for a Fannie Mae loan modification in 2013 and 2014.

Based on the foregoing evidence, BOA did not act in good faith to explore loss mitigation options with the Singers from November 5, 2010 through the date of this Decision and Order, and that interest on the note and 401-Mtge. should be barred during that time on that portion of the interest rate over and above 2% annually. While this includes a period of time prior to the settlement conferences, it would be an absurd result if BOA, who delayed filing its mortgage foreclosure action by two years as compared to Fannie Mae, were to be penalized less than Fannie Mae, who engaged in the statutory process. Such a result would also create incentives for lenders to forestall filing foreclosure actions and frustrate the entire intent of the statutory process. A court in equity cannot countenance such a result.

Accordingly, for the foregoing reasons, it is hereby

ORDERED that the motion of defendants Lawrence and Bonnie Singer for an order forgiving interest owed by defendants on the notes and mortgages which are the subject of these actions is granted to following extent:

plaintiff Federal National Mortgage Association and its agents, successors and assigns are forever barred, foreclosed and prohibited from demanding, collecting or attempting to collect, directly or indirectly, accrued interest on the note and mortgage that is the subject of Federal National Mortgage Association v Singer, et al., Index No. 850039/11 (Action No. 1) which is over and above 2% annually for the period from September 30, 2011 through the date of this Decision and Order; and

plaintiff Bank of America, N.A. and its agents, successors and assigns are forever barred, foreclosed and prohibited from demanding, collecting or attempting to collect, directly or indirectly, accrued interest on the note and mortgage that is the subject of Bank of America, N.A. v Singer, et al., Index No. 850200/13 (Action No. 2) which is over and above 2% annually for the period from November 5, 2010 through the date of this Decision and Order;

and it is further

ORDERED that the plaintiffs recalculate the amounts owed on each note and mortgage, in light of the court’s barring of a portion of the interest, and notify the Singers and their counsel and the court of those amounts in writing within ten (10) business days of today’s date; and it is further

ORDERED that after said ten (10) business days, plaintiffs in Action No. 1 and Action No. 2 are directed to reprocess the Singers for HAMP, Fannie Mae and/or any appropriate in-house loan modifications using the recalculated figures (and considering the expenses of both mortgages [*13]together as a whole); and it is further

ORDERED that within twenty (20) days, the parties shall contact the court to schedule a further CPLR 3408 conference; and it is further

ORDERED that the Singer’s counsel shall serve a copy of this Decision and Order, with Notice of Entry, on counsel in Action No. 1 and Action No. 2 within seven (7) business days of today’s date; and it is further

ORDERED that upon the Singer’s counsel notification to the E-Filing Resource Center and payment of the appropriate motion fee with seven (7) business days of today’s date, the E-Filing Resource Center (Rm. 119A) shall e-file a copy of the May 20, 2014 order to show cause in Action No. 1, under motion sequence no. 001 (originally returned for correction).

This Constitutes the Decision and Order of the Court.

Dated: July 15, 2015

ENTER:

________________________

J.S.C.

Footnote 1:In this decision, as well as in the case law, the term tolling interest is used interchangeably with, and is synonymous with, cancelling interest or barring the collection of interest.

Footnote 2:According to ACRIS (New York City’s automated city register information system), BOA assigned the mortgage in Action No. 2 to Fannie Mae on April 16, 2015. Back in 2012, Fannie Mae’s counsel had indicated to the court his belief that Fannie Mae owned the mortgages in Action No. 1 and Action No. 2. Accordingly, the court had understood that BOA was acting only as the servicer of the mortgage. To the extent that the understanding was incorrect, it had no impact on the settlement conferences or this decision.

Footnote 3:Ms. Diaz does not indicate the year in which the mortgagors had the deficit income of $5,864.00 per month. According to the Singers’ own profit and loss statement, as of December 2008, the Singers’ total income was $106,071.76, and total expenses was $136,253.22 (Singer 5/9/14 Aff., part of Ex. B [NYSCEF No. 27]). However, the phone conversation was in November, 2010. It would not be proper to base a 2010 loan modification determination on 2008 financial information.

Footnote 4:Formal substitution of counsel papers were never filed in Action No. 1 signaling a change in counsel for plaintiff Fannie Mae, but the Rosicki firm began appearing for plaintiff Fannie Mae sometime in March or April of 2012.

Footnote 5:Eventually Edward Rugino, Esq. of the Rosicki firm appeared. Of all the players in this matter, the court found him by far the most knowledgeable and responsive. It appears that the bulk of his efforts were hampered by the servicer, Seterus. The court appreciates his involvement in this matter.

Footnote 6:The email uploaded as an attachment to this decision contains underlining which was inadvertently made by the court. My court attorney’s computer does not have email extending back to 2012. Thus, the only copy is the underlined email that was in her file and uploaded herein.

Footnote 7:Once again, the capitalized interest amount was not specified in the communication from Seterus, but was provided by Mr. Rugino in an email dated August 24, 2013.

Footnote 8:Paragraphs 26 and 27 of the complaint seek reformation for an allegedly incorrect property description in the mortgage, stating “the deed and mortgage were intended to describe the same property identified . . . as Block 2164, Lot 1101.”

Footnote 9:By Decision and Order dated July 8, 2015, the motion to consolidate was denied, with leave to renew upon letter application, after the cases are remanded out of the settlement part (should the matters not settle).

Footnote 10:For purposes of convenience, the court issues one Decision and Order for both actions (but issues separate “gray sheets” in the actions referencing this decision).

Footnote 11:This decision was vacated on rehearing when the parties reached an amicable and fair settlement (Emigrant Mortg. Co., Inc. v Corcione, 2010 NY Misc LEXIS 6933 [Sup Ct, Suffolk County Oct. 14, 2010]).

Footnote 12:Bonnie Singer avers that she and her husband always had every intention of refinancing and combine the two mortgages once the merger of the two tax lots was legally finalized (Singer 5/9/14 Aff. ¶ 5).

Footnote 13:Bonnie Singer objected to paying any accrued interest, claiming that it was not what was agreed to in court and was unfair, as she and her husband had been trying to get modifications since 2009. Contrary to her belief, neither Fannie Mae or its counsel ever agreed in court to waive the accrued interest on the 400-Mtge., and Mr. Rugino’s October 16, 2012 email clearly stated that the “Unpaid Principal Balance” was “$301,686.17,” not the outstanding loan balance, and thus Bonnie Singer’s belief in this regard was unfounded.

Footnote 14:For example, in an email dated July 23, 2013, my court attorney advised Mr. Rugino: “The court has inquired several times about the status of the matter after our last conference on 4/22/13 and have gotten no response from plaintiff although you indicated that you will inquire and advise. If you cannot provide a detailed status by August 1, 2013, please have your client submit [by mail] a detailed affidavit explaining the status of this matter by August 7, 2013.” The following day, Mr. Rugino advised that he “understands” her frustration, but still had no response from Seterus.

Footnote 15:Although the majority of cases which bar interest do so for the entire amount of interest owed for a particular period (as opposed to a portion thereof), the court finds that the most equitable result here would be to bar that portion of the interest on the note and mortgage over and above 2% annually. This translates to the Singers paying an annual interest of 2%, which would mimic the loan modification finally offered by Fannie Mae to the Singers in 2013 and 2014 after much delay.

Footnote 16:The Singers also claim that they had contacted BOA in 2009 in regards to having the PMI removed “[a]s we had a perfect payment record with them for over two years” (Singer 5/9/14 Aff., ¶ 7). Bonnie Singer claims that BOA verbally refused, because one payment in January of 2009 was three days late (id.). She then claims that BOA promised to send them an application, but it was never received (id.). However, attached to her affidavit as part of exhibit B is a letter dated July 1, 2009 from BOA to Lawrence Singer thanking him for his recent inquiry to cancel the PMI on the 401-Mtge. This letter further advises that, in order to qualify, the loan-to-value ratio must be 75% or less, and gives directions on what they need to do to apply, one item being paying for and obtaining an appraisal from a BOA-approved appraiser. There is no evidence that the Singers ever followed through with this process.

SJC-11742
LINDA PINTI & another1

vs.

EMIGRANT MORTGAGE COMPANY, INC., &
another.2

Middlesex. January 8, 2015. – July 17, 2015.

Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, &
Hines, JJ.

Mortgage, Foreclosure, Real estate. Real Property, Mortgage,
Sale. Sale, Real estate. Notice, Foreclosure of mortgage.
Declaratory Relief. Practice, Civil, Declaratory
proceeding, Summary judgment.

BOTSFORD, J. In 2012, the defendant Emigrant Mortgage
Company, Inc. (Emigrant), foreclosed on the mortgage of the
plaintiffs Lesley Phillips and Linda Pinti by exercise of the
power of sale contained in the mortgage. Thereafter, the
plaintiffs filed this action in the Superior Court against
Emigrant and the defendant Harold Wilion, the purchaser of the
property at the foreclosure sale, seeking a declaratory judgment
that the sale was void because Emigrant failed to comply with
paragraph 22 of the mortgage, which concerns the mortgagee’s
provision of notice to the mortgagor of default and the right to
cure, and also the remedies available to the mortgagee upon the
mortgagor’s failure to cure the default, including the power of
sale (notice of default provisions). We agree with the
plaintiffs that strict compliance with the notice of default
provisions in paragraph 22 of the mortgage was required as a
condition of a valid foreclosure sale, and that Emigrant failed
to meet the strict compliance requirement. Accordingly, we
reverse the allowance of the defendant Emigrant’s motion to
dismiss and of the defendant Wilion’s motion for summary
judgment.3

NEDZAD MILJKOVIC, Plaintiff-Appellant,
v.
SHAFRITZ AND DINKIN, P.A., MITCHELL A. DINKIN. Defendants-Appellees.

WILSON, Circuit Judge.

Plaintiff-appellant Nedzad Miljkovic (Appellant) appeals from the district court’s dismissal with prejudice of his complaint against defendants-appellees Shafritz and Dinkin, P.A. and Mitchell A. Dinkin (collectively, Appellees), debt-collection attorneys for non-party Publix Employees Federal Credit Union (Publix), for failure to state a claim under the Fair Debt Collection Practices Act (FDCPA), see 15 U.S.C. §§ 1692-1692p. On appeal, we are tasked with determining the extent to which the conduct-regulating provisions of the FDCPA apply to actions taken by debt-collector attorneys in collecting on a debt.

This matter has its roots in state court. After Appellant failed to repay an automobile loan, resulting in a final debt judgment in favor of Publix, Appellees sought and obtained a continuing writ of garnishment against Appellant’s wages to recover the unpaid balance. In response, Appellant filed a claim of exemption from the garnishment; Appellees, in turn, filed a sworn reply disputing Appellant’s right to an exemption. Shortly thereafter, but prior to a hearing on Appellant’s exemption claim, the writ was dissolved on Appellees’ motion.

Appellant then commenced this action in federal court, alleging that Appellees’ sworn reply was an abusive, misleading, and unfair means of collecting on Appellant’s debt and, as such, violated multiple provisions of the FDCPA. See id. §§ 1692d-1692f. Appellees moved to dismiss for failure to state a claim, asserting the FDCPA was not intended to regulate representations made by debt-collecting attorneys in procedural court filings. Appellees further argued that, because the sworn reply was directed to the state court and to Appellant’s attorney, as opposed to Appellant, it was not an actionable communication under the FDCPA. The district court agreed and dismissed Appellant’s complaint on the grounds that the FDCPA did not apply to Appellees’ conduct before the state court and, even if it did, Appellant had failed to state a claim under the Act.

This appeal followed, presenting us with an issue of first impression in the Eleventh Circuit: whether representations made by an attorney in court filings during the course of debt-collection litigation are actionable under the FDCPA. Contrary to the district court’s analysis, we find that the plain language of the FDCPA, other persuasive decisions interpreting that language, and the purpose underlying the Act mandate a finding that the FDCPA applies to attorneys, like Appellees, who regularly engage in debt collection activity, even when that activity includes litigation and even when the attorneys’ conduct is directed at someone other than the consumer.^[1] Absent a statutory exception, then, documents filed in court in the course of judicial proceedings to collect on a debt, like Appellees’ sworn reply, are subject to the FDCPA. However, because we agree with the district court’s finding that Appellant failed to state a claim under the FDCPA, we affirm the dismissal of his complaint.

I.

In December 2013, Appellees, on behalf of Publix, filed a motion in Florida state court seeking a continuing writ of garnishment against Appellant’s wages in order to collect on a previously-obtained final debt judgment. The writ was approved on or about January 2, 2014. After the writ was served on Appellant’s then-employer, twenty-five percent of Appellant’s wages were withheld according to the terms of the writ.

Appellant filed a claim of exemption from garnishment, asserting that, because his wages were the primary source of income for his household, he qualified as a “head of family” under Florida law and his wages were thus exempt from garnishment.^[2] In a sworn affidavit, Appellant explained that his household included his wife and him; that his wife was disabled, unable to work, and received Social Security benefits; and that his wages, which typically did not exceed $750 per week, provided more than one-half of his wife’s support.^[3] The affidavit did not state the amount of Appellant’s wife’s Social Security benefits.

Appellees filed a sworn reply in opposition to Appellant’s claim of exemption, which stated, in pertinent part:

3. On behalf of [Publix], the undersigned disputes that [Appellant] is a head of household/family within the meaning of Florida Statutes.

4. The facts supporting [Appellant’s] Claim of Exemption are in dispute and, therefore, this garnishment action should be set for trial to determine these factual issues and [Publix’s] right to garnishment of the wages/salary at issue.

Appellees then issued discovery to Appellant. In an initial, partial response to Appellees’ discovery requests, Appellant provided three months of bank statements to demonstrate his household’s income and monthly budget.

The parties discussed possible dates for the impending evidentiary hearing on Appellant’s claim of exemption. In the course of such conversations, Appellees offered to settle Appellant’s debt for less than the amount due and owing in lieu of moving forward with the hearing, but Appellant refused. An evidentiary hearing was scheduled for March 31, 2014. Appellees reiterated their settlement offer to no avail, and discovery continued.

Appellant noticed the deposition of Appellee Mitchell A. Dinkin for March 10, 2014, for the stated purpose of questioning Mr. Dinkin regarding the factual basis for the sworn reply, which Mr. Dinkin had signed on behalf of Appellees. Appellant also returned his outstanding discovery responses to Appellees. Soon after receiving all of Appellant’s discovery responses and accompanying documents, Appellees filed a motion to dissolve the writ of garnishment, and the writ was dissolved by court order on March 6, 2014.

Appellant then initiated the instant action against Appellees for violations of the FDCPA. The complaint alleged that, in filing the sworn reply, Appellees employed conduct the natural consequence of which was to harass, oppress, and abuse Appellant; used false, misleading, and deceptive means in connection with the collection of Appellant’s debt; and engaged in unfair and unconscionable means to collect Appellant’s debt. See 15 U.S.C. §§ 1692d-1692f. Appellant claimed that his sworn affidavit provided Appellees with “actual knowledge” of the fact that his wages were exempt from garnishment, and thus, Appellees had “no factual basis” for opposing Appellant’s claim of exemption. The sworn reply, Appellant alleged, was a calculated effort to force a settlement of his debt.

Appellees moved to dismiss Appellant’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Appellees argued that Florida’s garnishment statute requires debt-collecting plaintiffs to file a sworn written statement in opposition to an individual’s claim of exemption before an evidentiary hearing will be set. See Fla. Stat. § 77.041(3). The sworn reply, Appellees averred, was a mere procedural filing directed first to the state court and then to Appellant’s counsel. Appellees asserted that the sworn reply was not the type of conduct from which Congress sought to protect consumers in enacting the FDCPA.

The district court agreed with Appellees. Skeptical of the idea that Congress intended to create FDCPA liability for “formulaic procedural filings,” the district court concluded that, to the extent the sworn reply was a procedural filing rather than “a formal pleading making factual allegations,” the FDCPA was inapplicable. The district court further determined that communications directed to someone other than the consumer are not actionable under the FDCPA. Thus, because the sworn reply was filed with and directed to the state court rather than to Appellant himself, the FDCPA did not apply to Appellees’ conduct. Finally, the district court found that, even if the FDCPA applied, Appellant nonetheless failed to state a claim under the Act. Appellant’s complaint was dismissed with prejudice, and this appeal followed.

II.

We review de novo a district court’s interpretation of a statute. See Bankston v. Then, 615 F.3d 1364, 1367 (11th Cir. 2010) (per curiam). We also review de novo the grant of a motion to dismiss under Rule 12(b)(6), “accepting the allegations in the complaint as true and construing them in the light most favorable to the plaintiff.” Hill v. White, 321 F.3d 1334, 1335 (11th Cir. 2003) (per curiam). However, “conclusory allegations . . . are not entitled to an assumption of truth—legal conclusions must be supported by factual allegations.” Randall v. Scott, 610 F.3d 701, 709-10 (11th Cir. 2010). To survive a motion to dismiss, a complaint must “state a claim to relief that is plausible on its face,” meaning it must contain “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”^[4] Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949 (2009) (internal quotation marks omitted).

III.

Our review is in two parts. We must first determine whether the FDCPA applies where, as here, the representations alleged to have violated the Act were made in court filings in the course of debt-collection proceedings. If the FDCPA does not apply to such representations, then the district court’s dismissal could be affirmed without further discussion. However, because we find that a debt-collector attorney’s representations in court filings and his conduct toward a consumer’s attorney are all covered by the FDCPA in the absence of any express exemption therefor, we must also decide whether the district court erred in dismissing Appellant’s complaint under Rule 12(b)(6). Finding that Appellant has failed to state a claim under the FDCPA, we affirm on those grounds.

A.

The threshold issue is the extent to which the FDCPA applies to the activities of debt-collector attorneys. The district court concluded and Appellees argue on appeal that the FDCPA does not apply to representations made in “formulaic procedural filings” or to communications directed only to the consumer’s attorney, rather than to the consumer himself. We disagree. The statutory text is entirely clear: the FDCPA applies to lawyers and law firms who regularly engage in debt-collection activity, even when that activity involves litigation, and categorically prohibits abusive conduct in the name of debt collection, even when the audience for such conduct is someone other than the consumer. The plain language of the FDCPA is conclusive here, and so we must do no more than enforce the Act according to its terms. See United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241, 109 S. Ct. 1026, 1030 (1989). We therefore decline to read into the Act those exceptions urged by Appellees and find that Appellees’ conduct before the state court is actionable under the FDCPA.

1.

The FDCPA regulates what debt collectors can do in collecting debts. See 15 U.S.C. §§ 1692-1692p. A “debt collector” includes “any person who . . . regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” Id. § 1692a(6). As a lawyer and a law firm who regularly practice in the field of consumer debt collection, Appellees do not dispute that they qualify as “debt collectors” within the meaning of the Act. However, they do challenge the extent to which the FDCPA applies to the conduct of debt collectors engaged in litigation; specifically, Appellees aver that court filings that are “purely procedural” do not fall within the ambit of the Act. Appellees’ argument is foreclosed by both Supreme Court precedent and the plain text of the FDCPA.

In Heintz v. Jenkins, the Supreme Court expressly held that the FDCPA “applies to the litigating activities of [debt-collector] lawyers.” 514 U.S. 291, 294, 115 S. Ct. 1489, 1490 (1995). In Heintz, a bank’s law firm brought a collections action against a consumer, Darlene Jenkins, to recover on an automobile loan. Id. at 293, 115 S. Ct. at 1490. A lawyer for the bank, George Heintz, sent Jenkins’s lawyer a letter in an attempt to settle the suit. Id. Jenkins claimed the letter included a false statement of the amount she owed to the bank. Id. She sued Heintz and his law firm under the FDCPA. Id. The district court dismissed Jenkins’s action for failure to state a claim on the grounds that the FDCPA did not apply to “lawyers engaging in litigation.” Id. at 294, 115 S. Ct. at 1490. The Seventh Circuit reversed, and the Supreme Court affirmed, holding that “[t]he Act does apply to lawyers engaged in litigation.” Id.

The Supreme Court’s holding aligned with the FDCPA’s definition of “debt collector.” See id. at 294, 115 S. Ct. at 1490-91 (citing 15 U.S.C. § 1692a(6)). “In ordinary English,” the Court reasoned, “a lawyer who regularly tries to obtain payment of consumer debts through legal proceedings is a lawyer who regularly `attempts’ to `collect’ those consumer debts.” See id. at 294, 115 S. Ct. at 1491 (citing Black’s Law Dictionary 263 (6th ed. 1990) (“To collect a debt or claim is to obtain payment or liquidation of it, either by personal solicitation or legal proceedings.”)). A prior version of the FDCPA “contained an express exemption for lawyers,” which stated that “the term `debt collector’ did not include `any attorney-at-law collecting a debt as an attorney on behalf of and in the name of a client.'” Id. (quoting Pub. L. No. 95-109, § 803(6)(F), 91 Stat. 874, 875 (1977)). However, Congress later “repealed this exemption in its entirety, without creating a narrower, litigation-related, exemption to fill the void”—a choice the Court found significant. Id. at 294-95, 115 S. Ct. at 1491 (citation omitted). Taking stock of Congress’s action, the Court theorized that Congress must have “intended that lawyers be subject to the Act whenever they meet the general `debt collector’ definition.” Id. at 295, 115 S. Ct. at 1491.

Heintz asked the Court to imply an “exemption for those debt-collecting activities of lawyers that consist of litigating,” but the Court would not oblige. Id. For one thing, the Court did not view its holding as limiting an attorney’s ability to advance the interests of his client. See id. at 296-98, 115 S. Ct. at 1491-92; see also Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 600, 130 S. Ct. 1605, 1622 (2010) (“An attorney’s ethical duty to advance the interests of his client is limited by an equally solemn duty to comply with the law and standards of professional conduct.” (internal quotation marks omitted)). It pointed to a number of exceptions in the text of the FDCPA “authoriz[ing] the actual invocation of the remedy that the collector `intends to invoke'” in accord with the Act’s “apparent objective of preserving creditors’ judicial remedies.” Heintz, 514 U.S. at 296, 115 S. Ct. at 1492. For another thing, the Court found “nothing either in the Act or elsewhere indicating that Congress intended . . . to create [such an] exception from the Act’s coverage—an exception that . . . falls outside the range of reasonable interpretations of the Act’s express language.” Id. at 298, 115 S. Ct. at 1492-93. Under Heintz, then, the FDCPA unquestionably applies to the litigating activities of lawyers who regularly engage in debt collection—and to Appellees’ conduct before the state court. See id. at 299, 115 S. Ct. at 1493.

A post-Heintz amendment to the FDCPA further confirms that the Act applies here. See Sayyed v. Wolpoff & Abramson, 485 F.3d 226, 231 (4th Cir. 2007). After Heintz was handed down, Congress amended 15 U.S.C. § 1692e(11) of the Act, which prohibits initial written communications to the consumer that fail to disclose that they are from a debt collector, to exclude formal pleadings “made in connection with a legal action” from the requirements of that subsection. § 1692e(11); see Sayyed, 485 F.3d at 231. In so doing, Congress expressly exempted formal pleadings—and formal pleadings alone—from a “sole, particularized requirement of the FDCPA.” Sayyed, 485 F.3d at 231. After Congress’s amendment, debt-collector attorneys who file a complaint or respond to a complaint need not state that such pleadings are filed by a debt collector.^[5] See § 1692e(11). Congress did not otherwise constrain the Act’s general applicability to lawyers using litigation to collect debts.

We presume that, in amending a statute, Congress has knowledge of prior judicial interpretation of the statute. See Lorillard v. Pons, 434 U.S. 575, 580-81, 98 S. Ct. 866, 870 (1978). That Congress exempted formal pleadings from a single requirement of the FDCPA after the Supreme Court issued its decision in Heintz suggests that Congress was aware of the Court having interpreted the Act to apply to the litigating activities of debt-collector attorneys “and accepted it,” except to the extent that it exempted formal pleadings from § 1692e(11)’s requirements. See Sayyed, 485 F.3d at 231 (emphasis added). If Congress had intended to exempt all litigating activities or any one litigating activity from the Act’s other provisions, “it presumably would have done so expressly,” as it did in § 1692e(11). Russello v. United States, 464 U.S. 16, 23, 104 S. Ct. 296, 300 (1983). Instead, Congress has effectively instructed that all litigating activities of debt-collecting attorneys are subject to the FDCPA, except to the limited extent formal pleadings are exempt under § 1692e(11).^[6] See Sayyed, 485 F.3d at 231.

Here, an implied exemption from the FDCPA’s coverage for Appellees’ sworn reply would “fall[] outside the range of reasonable interpretations of the Act’s express language.” See Heintz, 514 U.S. at 298, 115 S. Ct. at 1492-93; see also Merritt v. Dillard Paper Co., 120 F.3d 1181, 1187 (11th Cir. 1997) (“Courts have no authority to alter statutory language.”). Both the clear language chosen by Congress and the Supreme Court’s explicit pronouncement in Heintz compel the conclusion that the FDCPA applies to all litigating activities of debt-collecting attorneys, subject only to § 1692e(11)’s express exemption. See Andrus v. Glover Constr. Co., 446 U.S. 608, 616-17, 100 S. Ct. 1905, 1910 (1980) (“Where Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied, in the absence of evidence of a contrary legislative intent.”); CBS Inc. v. PrimeTime 24 Joint Venture, 245 F.3d 1217, 1228 (11th Cir. 2001) (“Those who ask courts to give effect to perceived legislative intent by interpreting statutory language contrary to its plain and unambiguous meaning are in effect asking courts to alter that language. . . .”). The Act thus encompasses actions undertaken by Appellees, both in and out of state court, in collecting on Appellant’s debt.

2.

Appellees try to extricate the sworn reply from the FDCPA’s proscriptions by arguing that the sworn reply was directed to Appellant’s attorney, not to Appellant, and communications directed to a consumer’s attorney, rather than to the consumer, are not actionable under the Act.^[7] They reason that the FDCPA should not apply to a debt collector’s conduct when an attorney is interposed between the consumer and the debt collector because, in those instances, the attorney, rather than the FDCPA, will protect the consumer from the debt collector’s conduct. It should be clear from the statutory text and from Heintz that Appellees’ argument is ill-fated. Still, given the varied holdings of our Sister Circuits on this issue, we think it necessary to address Appellees’ argument. In so doing, we find it impossible to conclude, under the plain language of the FDCPA, that a debt collector’s communications to an attorney representing a consumer are not covered by the Act.

Our inquiry begins with the specific provisions invoked by Appellant. The first is § 1692d, which expressly provides that “debt collector[s] may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.” 15 U.S.C. § 1692d (emphasis added). Given the phrase “any person,” § 1692d’s universal application could not be clearer. See Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769, 773 (7th Cir. 2007) (emphasizing § 1692d’s reference to “any person”). On its face, § 1692d is not a protection for consumers alone; it ostensibly protects any person from being harassed, oppressed, or abused by a debt collector in connection with the collection of a debt. In the absence of any language to the contrary, a consumer’s attorney is undoubtedly “any person.” Cf. 15 U.S.C. § 1692c, (d) (restricting application of section to consumers and “the consumer’s spouse, parent (if the consumer is a minor), guardian, executor, or administrator”).

The same holds true for § 1692e. Section 1692e broadly prohibits “any false, deceptive, or misleading representation or means in connection with the Collection of any debt.” Id. § 1692e (emphasis added). A particular class of persons to whom such representations or means cannot be directed is not specified; rather, in listing examples of conduct that would violate § 1692e, Congress explicitly provided examples of conduct directed to consumers and other persons alike. A debt collector may violate § 1692e by threatening “to take any action that cannot legally be taken,” using “any false representation or deceptive means . . . to obtain information concerning a consumer,” or by failing to disclose in an initial written communication “with the consumer” that the communication is from a debt collector. See id. § 1692e(5), (10), (11). As such, § 1692e is naturally read to bar “any” prohibited representation, regardless of to whom it is directed, so long as it is made “in connection with the collection of any debt.” See id. § 1692e.

Like § 1692e, the third section at issue, § 1692f, does not expressly state that it protects “any person.” Section 1692f generally prohibits a debt collector from using “unfair or unconscionable means to collect or attempt to collect any debt.” Id. § 1692f. Still, the provision’s broad language coupled with its illustrative examples of violative conduct support the conclusion that § 1692f applies whether the unfair and unconscionable means are employed against consumers or non-consumers. Section 1692f(5), for example, bars debt collectors from “[c]ausing charges to be made to any person for communications by concealment of the true purpose of the communication.” Id. § 1692f(5) (emphasis added). In this scenario, it is the person who accepts the charges as a result of the debt collector’s concealment who is also afforded protection under § 1692f, and nothing in the language of the statute suggests that that person need be the consumer. Cf. id. § 1692c.

In sum, not one of the three sections at issue here “designate[s] any class of persons, such as lawyers, who can be abused, misled, etc., by debt collectors with impunity.” See Evory, 505 F.3d at 773. The FDCPA’s statutory text does not provide nor does it imply immunity for debt collection practices otherwise forbidden by the Act simply because those debt collection practices are directed at a consumer’s attorney or any other non-consumer. Appellees’ contention that attorneys representing consumers are excluded from the class of persons to whom a debt collector may not direct conduct prohibited under §§ 1692d-1692f finds no support in the plain language of the Act.

To the contrary, § 1692c specifically provides that, where a debt collector knows that a consumer is represented by an attorney, he or she shall direct all communications to the consumer’s attorney, absent permission to communicate directly with the consumer. See 15 U.S.C. § 1692c(a)(2). Section 1692c, as a whole, regulates debt collectors’ communications with consumers. See id. § 1692c; see also id. § 1692b(2). In contrast to other provisions, § 1692c explicitly refers to the “consumer” and clearly and necessarily distinguishes “consumers” from “attorneys” and other third parties. It is thus understood to protect only consumers and those individuals enumerated in §1692c(d). See Wright v. Fin. Serv. of Norwalk, Inc., 22 F.3d 647, 649 & n.1 (6th Cir. 1994) (en banc) (noting that § 1692c is the only provision limited to “consumers,” while “a debt collection practice need not offend the alleged debtor before there is a violation of [§ 1692e]”). Section 1692c’s singular focus does not, however, evidence a congressional intent to afford attorneys and their consumer-clients disparate protection under other sections of the Act. See, e.g., Russello, 464 U.S. at 23, 104 S. Ct. at 300 (“Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” (internal quotation marks omitted)).

Indeed, the FDCPA’s liability provision is in no way limited to conduct and communications directed only to consumers. Pursuant to § 1692k(a), “any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person.” 15 U.S.C. § 1692k(a) (emphasis added). The phrase “with respect to any person” is expansive and is properly understood to encompass all persons. See CBS Inc., 245 F.3d at 1223 (“[I]n the absence of any language limiting the breadth of [the] word [`any’], it must be read as referring to all of the subject that it is describing.” (internal quotation marks omitted)). It follows that if “any person” is entitled to redress under the FDCPA, then all persons must be entitled to protection under it—be it the consumer under § 1692c, see Wright, 22 F.3d at 649 n.1, or any person who is mistreated in the connection with the collection of any debt under §§ 1692d-1692f. See United States v. DBB, Inc., 180 F.3d 1277, 1281 (11th Cir. 1999) (“[W]e read the statute to give full effect to each of its provisions. . . . [and] look to the entire statutory context.”). By painting § 1692k with broad strokes, Congress ensured that debt collectors could be held liable to consumers and non-consumers alike for violations of the Act’s conduct-regulating provisions. We refuse to read §1692k to be narrower than the plain meaning of the phrase “any person” implies. See, e.g., United States v. Silva, 443 F.3d 795, 798 (11th Cir. 2006) (per curiam) (outlining rules of statutory construction).

Finally, if the statutory text left any room for doubt on the consumer-attorney-communication issue, appellate precedent resolves it. Our lodestar, Heintz, involved a communication from a debt-collector attorney to a consumer’s attorney. Jenkins’s FDCPA claims in Heintz were based on a letter from Heintz, the debt collector, to Jenkins’s attorney. See 514 U.S. at 293, 115 S. Ct. at 1490. On these facts, the Supreme Court held that the Act applies to lawyers “who `regularly’ engage in consumer-debt-collection activity, even when that activity consists of litigation.” Id. at 299, 115 S. Ct. at 1493. In so doing, the Court assumed, without deciding, that a false representation sent to a debtor’s attorney by a debt collector violates the Act. See id. at 298-99, 115 S. Ct. at 1492-93. In accord with Heintz, a number of courts of appeals have since read §§ 1692d-1692f, or a combination thereof, as applying to a debt collector’s communications with persons other than the consumer, see, e.g., Hemmingsen v. Messerli & Kramer, P.A., 674 F.3d 814, 818-19 (8th Cir. 2012); Todd v. Collecto, Inc., 731 F.3d 734, 737-39 (7th Cir. 2013); Evory, 505 F.3d at 773; see also Sayyed, 485 F.3d at 232-34, and we join with those courts today.

The language of the FDCPA is plain and clear. Debt collectors are categorically prohibited from making false or misleading representations and from engaging in abusive and unfair practices in connection with the collection of any debt. See 15 U.S.C. §§ 1692d-1692f. A proper reading of the statutory text dictates that a debt collector’s communications with a consumer’s attorney, including those communications required by § 1692c, are subject to §§ 1692d-1692f of the Act to the same extent as a debt collector’s communications with the consumer himself.^[8] See, e.g., id. § 1692k(a). It would create an odd situation, indeed, if the fact that a consumer was represented by an attorney somehow excused the debt collector from otherwise observing the FDCPA’s requirements. Therefore, in the absence of statutory language to the contrary, we decline Appellees’ invitation to exempt conduct or communications directed to a consumer’s attorney from the Act’s coverage.

3.

Upon a brief examination of the Act’s declared purpose, we are fortified in our conclusions. The FDCPA was passed in response to “abundant evidence of . . . abusive, deceptive, and unfair debt collection practices by many debt collectors”; then-existing laws and procedures for redressing injuries caused by such practices had proven inadequate to protect consumers. See 15 U.S.C. § 1692(a)-(b). Its purpose is “to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” Id. § 1692(e). Congress found that non-abusive means “[were] available for the effective collection of debts.” Id. § 1692(c).

“[T]he import of the words Congress has used is clear.” Harris v. Garner, 216 F.3d 970, 976 (11th Cir. 2000) (en banc). The Act’s natural point of aim is the debt-collecting activities of debt collectors, and the inbuilt consequence of its regulation of debt collectors is the protection of both consumers and other persons who find themselves on the receiving end of prohibited debt-collecting activities. See, e.g., §§ 1692(b), 1692(e), 1692a(2), 1692d-1692f, 1692k(a). Interpreting the FDCPA to permit otherwise prohibited conduct merely because it is directed at a consumer’s attorney or takes the form of a procedural filing would not only subvert the plain text of the Act, it would also frustrate the Act’s stated objectives. See, e.g., United States v. Am. Trucking Ass’ns, 310 U.S. 534, 542, 60 S. Ct. 1059, 1063 (1940) (“In the interpretation of statutes, the function of the courts is. . . . to construe the language so as to give effect to the intent of Congress.”); Isbrandtsen Co. v. Johnson, 343 U.S. 779, 783, 72 S. Ct. 1011, 1014-15 (1952) (“[A statute] should be interpreted so as to effect its purpose.”).

In the context of communications to a consumer’s attorney, for example, Appellees’ reading of the FDCPA protects a consumer from otherwise prohibited debt collection efforts “only so long as she does not retain an attorney.” Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 945 (9th Cir. 2007) (per curiam) (Fletcher, J., concurring in part, dissenting in part). Once the consumer retains an attorney, though, the debt collector is free to convey false or misleading information to the consumer’s attorney without fear of consequences. See, e.g., § 1692e. In other words, in seeking the advice of an attorney, the consumer opens himself up to the very abuses the Act is meant to redress, see Guerrero, 499 F.3d at 945 (Fletcher, J., concurring in part, dissenting in part); see also § 1692(a) (listing effect of abusive debt collection practices), because the consumer, rather than the debt collector, will be forced to bear the costs resulting from the debt collector’s conduct, cf. § 1692k(a) (holding debt collectors civilly liable for illicit debt collection practices). Such a result would destroy, not achieve, the spirit and force of the FDCPA. See DBB, Inc., 180 F.3d at 1283.

4.

Guided by Supreme Court precedent and the plain language of the FDCPA, we find that the Act applies to the litigating activities of lawyers and law firms engaged in consumer debt collection, subject only to the limited exceptions Congress has chosen to include in the statute. See Harris, 216 F.3d at 976 (“We will not do to the statutory language what Congress did not do with it. . . .”). The statutory text also leads us to conclude that the Act prohibits debt collectors from engaging in proscribed conduct with respect to any person in connection with the collection of any debt, see 15 U.S.C. §§ 1692d-1692f, 1692k, except where Congress has expressly limited applicability of the Act to a particular person or group of persons, see, e.g., id. §§ 1692b, 1692c.

To the extent our reading of the FDCPA “imposes some constraints on a lawyer’s advocacy on behalf of [his] client, it is hardly unique in our law,” and we do not think it absurd to require a debt-collecting attorney advancing the interests of his client to fulfill his “equally solemn duty to comply with the law.” Jerman, 559 U.S. at 600, 130 S. Ct. at 1622. The FDCPA is nothing short of a straightforward statutory directive to hold debt collectors accountable for abusive, deceptive, and unfair debt collection practices. Had Congress intended to restrict application of the FDCPA to conduct directed only to the consumer or to exempt certain procedural filings from its provisos, it presumably would have done so expressly, see, e.g., §§ 1692c(d), 1692e(11), but it did not draft the statute that way. Therefore, because Appellees filed the sworn reply in connection with the collection of Appellant’s debt, Appellees’ conduct is actionable under the FDCPA.

B.

Having determined that the FDCPA does apply to Appellees’ conduct here, we must examine whether Appellant pled facts sufficient to allow this court “to draw the reasonable inference that [Appellees are] liable for the misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S. Ct. at 1949. In a single cause of action, Appellant alleges that Appellees violated each of § 1692d, § 1692e, and § 1692f by filing the sworn reply, notwithstanding Appellant’s assertions that his wages were exempt, and in not releasing the writ of garnishment sooner. However, on this issue, we agree with the district court and find that Appellant’s complaint fails to sufficiently allege that Appellees engaged in conduct prohibited by the FDCPA.

1. § 1692d

Section 1692d does not, as a matter of law, proscribe Appellees’ conduct in this case. Under § 1692d, a debt collector “may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.” 15 U.S.C. § 1692d. Banned conduct includes the “use of violence,” the “use of obscene or profane language,” and repeated phone calls intended to annoy or harass “any person at the called number.” See, e.g., id. § 1692d(1)-(6) (listing types of prohibited conduct). We view claims under § 1692d “from the perspective of a consumer whose circumstances make[] him relatively more susceptible to harassment, oppression, or abuse.” See Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1179 (11th Cir. 1985). Here, Appellant alleges that Appellees violated § 1692d by filing the sworn reply despite Appellant’s affidavit stating his wages were exempt from garnishment.

We considered the scope of § 1692d in Jeter. In that case, Credit Bureau, Inc. (Credit Bureau) notified the consumer, Diane Jeter, that she was “indebted to” Credit Bureau’s client. Id. at 1171. The letter provided that, “unless satisfactory arrangements [we]re made” within a five-day period, Credit Bureau would recommend that its client bring an action against Jeter to collect the debt. Id. We acknowledged that, while a threatened “lawsuit might cause a consumer embarrassment, inconvenience, and further expense. . . . [s]uch consequences of a debt collection (or any other) lawsuit are so commonplace that even a consumer susceptible to harassment, oppression, or abuse would not have been harassed, oppressed, or abused by the statement in and of itself.” Id. at 1179 (internal quotation marks omitted). We noted that, while Credit Bureau’s written statements may have fallen within § 1692e as “potentially deceptive or false . . . threats to recommend legal action,” id. (citing § 1692e(5), (10)), “[d]eception or falsehood alone . . . is wholly different from the conduct condemned in [§ 1692d],” id. As such, we found that Credit Bureau’s conduct was outside the scope of § 1692d— and we reach the same conclusion here.

If the filing of a lawsuit does not have the natural consequence of harassing, abusing, or oppressing a debtor, surely a simple oppositional statement does not “represent[] the type of coercion and delving into the personal lives of debtors that the FDCPA in general, and § 1692d in particular, was designed to address.” Id. at 1180 n.12; see Harvey v. Great Seneca Fin. Corp., 453 F.3d 324, 330 (6th Cir. 2006) (“[T]he filing of a debt-collection lawsuit without the immediate means of proving the debt does not have the natural consequence of harassing, abusing, or oppressing a debtor.”). It is not enough that the sworn reply caused Appellant unwanted “embarrassment, inconvenience, and further expense,” Jeter, 760 F.2d at 1179 (internal quotation marks omitted); indeed, as the Sixth Circuit has noted, “[a]ny attempt to collect a defaulted debt will be unwanted by a debtor,” see Harvey, 453 F.3d at 330. Rather, the debt collector’s conduct must manifest “a tone of intimidation,” Jeter, 760 F.2d at 1179 (internal quotation marks omitted), and no such tone emanates from Appellees’ sworn reply here.

Even viewed from the perspective of the least sophisticated consumer, the filing of the sworn reply does not have the natural consequence of harassing, abusing, or oppressing Appellant. See Jeter, 760 F.2d at 1179; see also Chalik v. Westport Recovery Corp., 677 F. Supp. 2d 1322, 1330 (S.D. Fla. 2009) (finding sworn statement denying exemption filed without specific knowledge regarding exemption was not the type of conduct covered by § 1692d); Watkins v. Peterson Enters., 57 F. Supp. 2d 1102, 1108-09 (E.D. Wash. 1999) (holding that serving writs of garnishment that overstated debt was not an abusive practice because the types of behavior described in § 1692d “are a far cry from that at issue”). In employing the court system in the way alleged by Appellant here—namely, filing an oppositional statement—Appellees did not engage in “conduct the natural consequence of which [was] to harass, oppress, or abuse” within the meaning of § 1692d. See, e.g., § 1692d(1)-(6). Therefore, the district court did not err in dismissing Appellant’s claim under § 1692d.^[9]

2. § 1692e

Appellant has also failed to allege facts sufficient to state a claim under § 1692e(10) or, more generally, § 1692e. Section 1692e generally prohibits deceptive practices in debt collection. Examples of proscribed conduct include implying that the consumer committed any crime, falsely representing the amount of the debt, and threatening to take legal action that is not intended to be taken. See 15 U.S.C. § 1692e(1)-(16). Appellant contends that the sworn reply qualifies as a “false representation or deceptive means” of collecting a debt under subsection (10) because Appellees were without a factual basis for opposing his claim of exemption. In determining whether Appellees’ conduct was deceptive under § 1692e and/or § 1692e(10), we must consider whether the “least sophisticated consumer” would be deceived by the sworn reply.^[10] See Jeter, 760 F.2d at 1177.

The sworn reply is not misleading or deceptive in the traditional sense. It does not misrepresent the nature or effect of the writ of garnishment. See Fuller v. Becker & Poliakoff, P.A., 192 F. Supp. 2d 1361, 1369-70 (M.D. Fla. 2002). It does not erroneously state the amount of the debt owed by Appellant. See Kojetin v. C U Recovery, Inc., 212 F.3d 1318, 1318 (8th Cir. 2000) (per curiam). It does not incorrectly identify the holder of the alleged debt. See Wallace v. Wash. Mut. Bank, F.A., 683 F.3d 323, 327-28 (6th Cir. 2012). It does not contain “false or deliberately ambiguous threats” of future litigation. See Jeter, 760 F.2d at 1177-78 & n.11; see also Crossley v. Lieberman, 868 F.2d 566, 567, 571-72 (3d Cir. 1989). Instead, the sworn reply simply states Appellees’ legal position relative to Appellant’s claim of exemption.

Still, Appellant maintains that Appellees’ legal position was baseless because Appellees received Appellant’s affidavit in support of his claim of exemption prior to filing the sworn reply. Appellees, however, were under no obligation to take Appellant’s affidavit as the truest representation of his financial situation. Indeed, Appellant’s affidavit failed to provide the amount of his wife’s Social Security benefits. Appellees needed to ascertain the amount of Appellant’s wife’s Social Security benefits in order to determine whether Appellant provided more than one-half of her support. See Fla. Stat. § 222.11. Appellees sought that information through discovery, and, in order to avoid dissolution of the writ of garnishment before such discovery took place, Appellees had to file the sworn reply. See id. § 77.041(3) (“If the plaintiff or the plaintiff’s attorney does not file a sworn written statement that answers the defendant’s claim of exemption . . . no hearing is required and the clerk must automatically dissolve the writ and notify the parties of the dissolution by mail.”). In short, at the time the sworn reply was filed, the facts underlying Appellant’s right to an exemption were in dispute.

Appellant does not allege how he—or anyone else—was “misled, deceived, or otherwise duped” by the submission of a sworn statement that disputed his contention that he was a “head of family” under Florida law. See Hemmingsen, 674 F.3d at 819 (internal quotation marks omitted). Appellees were fully within their rights to assert their position with regard to Appellant’s claim of exemption and to request more information or details about Appellant’s right to an exemption. It is not enough to allege that Appellant believed that he was entitled to the “head of family” exemption and that Appellees inconveniently and disappointingly disagreed. It would be passing odd to find that allegations that a state court filing asserted a legal position contrary to that of the consumer were sufficient to state a claim under § 1692e. See Jerman, 559 U.S. at 599-600, 130 S. Ct. at 1621-22 (noting “the Act’s conduct-regulating provisions . . . should not be assumed to compel absurd results when applied to debt collecting attorneys”). Without more, we will not limit a debt-collector attorney’s ability to engage in conduct inherent to the adversarial process—and expected in a garnishment action in Florida state court. See Rivell v. Private Health Care Sys., Inc., 520 F.3d 1308, 1309 (11th Cir. 2008) (per curiam) (“[T]he complaint’s `[f]actual allegations must be enough to raise a right to relief above the speculative level.'”).

Appellees’ subsequent dissolution of the writ of garnishment does not affect our analysis. An “apparent objective” of the FDCPA is the preservation of creditors’ judicial remedies. See Heintz, 514 U.S. at 296, 115 S. Ct. at 1492. If judicial proceedings are to accurately resolve disputes, including debt collection disputes, debt-collector attorneys must be permitted to present legal arguments in their clients’ favor and to invoke the remedies available to them, including wage garnishment. See id. (citing § 1692c(2)-(3)) (“[The Act allows] the actual invocation of the remedy that the collector `intends to invoke.'”). The fact that Appellees’ attempt to collect on Appellant’s debt by garnishing his wages “turn[ed] out ultimately to be unsuccessful” does not make the filing of the sworn reply “an action that cannot legally be taken.” See id. at 296, 115 S. Ct. at 1491 (internal quotation marks omitted).

Because Appellant’s allegations as stated in his complaint are insufficient to establish deceptive means of collecting a debt under § 1692e or § 1692e(10), Appellant fails to state a cause of action, and his claim was properly dismissed.^[11]

3. § 1692f

Finally, § 1692f’s catch-all prohibition on unfair and unconscionable conduct does not net Appellant’s complaint. See Todd, 731 F.3d at 739 (labeling § 1692f a “catch-all prohibition”). Section 1692f generally prohibits the use of “unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. § 1692f. Whether conduct qualifies as unfair or unconscionable is assessed objectively from the point of view of the “least sophisticated consumer.”^[12] LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1200-01 (11th Cir. 2010) (per curiam) (internal quotation marks omitted).

The Act does not supply definitions for “unfair” or “unconscionable,” so we turn to the common usage of the words to determine their meaning. See Consol. Bank, N.A. v. United States Dep’t of Treasury, 118 F.3d 1461, 1464 (11th Cir. 1997). “Unfair” is defined as “marked by injustice, partiality, or deception.” Merriam Webster’s Collegiate Dictionary 1290 (10th ed. 1996); see also LeBlanc, 601 F.3d at 1200 (“[I]n Jeter, we noted in dictum that in the FTC context, `an act or practice is deceptive or unfair if it has the tendency or capacity to deceive.'”). A step beyond unfair, “unconscionable” is defined as “shockingly unfair or unjust.” Merriam Webster’s Collegiate Dictionary 1286; see Black’s Law Dictionary 1757 (10th ed. 2014) (“having no conscience; unscrupulous . . . showing no regard for conscience; affronting the sense of justice, decency, or reasonableness”). As defined, neither of these terms describes Appellees’ conduct here.

We first note that Appellant fails to allege any conduct beyond that which he asserts violates the other provisions of the FDCPA, and, in doing so, Appellant fails to specifically identify how Appellees’ conduct here was either unfair or unconscionable in addition to being abusive, deceptive, or misleading.^[13] See LeBlanc, 601 F.3d at 1200 & n.31 (finding consumer’s § 1692f claim dependent in part on consumer’s success under § 1692e(5) because “it’s doubtful” conduct not found to violate § 1692e(5) could be perceived as unfair and unconscionable). A catch-all is not a free-for-all. In order to proceed under § 1692f, Appellant is still required to allege facts showing that the least sophisticated consumer would or could view Appellee’s sworn reply as partial and unjust or as unscrupulous and unethical. See id. at 1200. Appellant makes no such allegations.

Looking to the conduct that is alleged, we fail to see how the sworn statement, which was filed after Appellees had obtained a writ of garnishment and for purposes of persuading the state court to hold an evidentiary hearing on Appellant’s exemption claim, was either deceitful or an affront to justice. See Beler v. Blatt, Hasenmiller, Leibsker & Moore, LLC, 480 F.3d 470, 472-75 (7th Cir. 2007) (holding law firm did not violate § 1692f when efforts to collect on debt judgment resulted in three-week freeze of consumer’s checking account); Todd, 731 F.3d at 739-40 (finding plaintiff failed to state claim under § 1692f where debt collector made no request for payment and no express or implied threat of repercussion to plaintiff or his consumer-mother); McMillan v. Collection Prof’ls Inc., 455 F.3d 754, 756, 763-65 (7th Cir. 2006) (concluding least sophisticated consumer could find letter with heading “YOU ARE EITHER HONEST OR DISHONEST YOU CANNOT BE BOTH” unfair under § 1692f); see also Fox v. Citicorp Credit Servs., Inc., 15 F.3d 1507, 1517 (9th Cir. 1994) (holding pursuit of writ of garnishment where debtor was current on credit card payments could be found to violate § 1692f). Appellees’ conduct, as alleged, is a “far cry” from the types of behavior proscribed by § 1692f. See Watkins, 57 F. Supp. 2d at 1109; see also 15 U.S.C. § 1692f(1)-(8).

The crux of Appellant’s § 1692f claim is Appellees’ assertion in the sworn reply of a legal position contrary to that of Appellant. Unfortunately, disagreement is the nature of litigation; Appellees’ conduct before the state court does not, without more, rise to the level of unfair or unconscionable under § 1692f. As such, we affirm the district court’s dismissal of Appellant’s § 1692f claim as well.

IV.

For the reasons set forth above, we disagree with the district court’s finding that the FDCPA does not apply to Appellees’ conduct before the state court. Because the plain text of the Act makes no exception for “formulaic procedural filings” and does not limit applicability of §§ 1692d-1692f to conduct directed at the consumer, Appellees’ state-court activities fall squarely within the four corners of the FDCPA and were actionable thereunder. However, we ultimately affirm the district court’s dismissal of Appellant’s complaint based on Appellant’s failure to state a claim under the FDCPA.

AFFIRMED.

[*] Honorable Richard L. Voorhees, United States District Judge for the Western District of North Carolina, sitting by designation.

[1] The FDCPA defines a “consumer” as “any natural person obligated or allegedly obligated to pay any debt.” See 15 U.S.C. § 1692a(3). As such, courts often use “consumer” and “debtor” interchangeably. Except, however, in the context of 15 U.S.C. § 1692c, which provides a broader, section-specific definition of “consumer.” See id. § 1692c(d) (“For the purpose of this section, the term `consumer’ includes the consumer’s spouse, parent (if the consumer is a minor), guardian, executor, or administrator.”). Section 1692c is not at issue in this appeal.

[2] See Fla. Stat. § 222.11(1)(c) (defining the “head of family” as “any natural person who is providing more than one-half of the support for a child or other dependent”).

[3] See id. § 222.11(2)(a) (exempting from garnishment “[a]ll of the disposable earnings of a head of family whose disposable earnings are less than or equal to $750 a week”); see also id. § 77.041.

[4] Appellant attached multiple exhibits to his complaint, including a copy of his affidavit and of the sworn reply, and we treat those documents as part of the complaint for Rule 12(b)(6) purposes. See, e.g., Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000) (per curiam); see also Fed. R. Civ. P. 10(c).

[5] See Black’s Law Dictionary 1339 (10th ed. 2014) (defining a “pleading” as “[a] formal document in which a party to a legal proceeding (esp. a civil lawsuit) sets forth or responds to allegations, claims, denials, or defenses,” such as “the plaintiff’s complaint and the defendant’s answer”).

[6] We need not determine whether the sworn reply filed by Appellees is, in fact, a “procedural filing” or whether a “procedural filing” would or could never qualify as a “formal pleading” under § 1692e(11) because the instant appeal does not implicate the particular requirements of that subsection. For our purposes, § 1692e(11) simply demonstrates that Congress can craft explicit exemptions from the FDCPA’s proscriptions for the litigating activities of debt-collecting attorneys where it sees fit to do so. See, e.g., United States v. Mount Sinai Med. Ctr. of Fla., Inc., 486 F.3d 1248, 1252 (11th Cir. 2007).

[7] Appellees also argue, for the first time on appeal, that the sworn reply does not qualify as a “communication” under the FDCPA. See 15 U.S.C. § 1692a(2) (defining the term “communication”). We need not exercise our discretion to consider this issue because it is unconnected to our ultimate determination. See Akanthos Capital Mgmt., LLC v. CompuCredit Holdings Corp., 677 F.3d 1286, 1292 (11th Cir. 2012) (providing this court has discretion to consider issues not presented below). First, Appellant did not allege below and does not allege on appeal that the sworn reply constitutes a “communication” under the FDCPA; Appellant’s claims are based on Appellees’ “conduct.” Second, communications in connection with debt collection are governed by § 1692c, a provision that is not at issue here. Third, the provisions that are at issue, §§1692d-1692f, regulate more than a debt collector’s communications; they prohibit specified conduct, representations, and means of collection. While these sections necessarily encompass communications, a violation thereof may be premised on conduct not falling within the statutory definition of “communication.” See §§ 1692a(2), 1692d-1692f. Appellees’ red herring is a rough fish.

[8] Appellees also suggest that the sworn reply is not actionable under the FDCPA because it was “directed to the state court.” This contention fails for the same reasons Appellees’ argument regarding attorney-to-attorney communications fails: (1) the Act’s prohibitions are not limited to representations made directly to or conduct directed solely at consumers, see §§ 1692d-1692f, and (2) documents submitted to a court in the course of judicial proceedings to collect on a debt fall within the ambit of “litigating activities,” see Heintz, 514 U.S. at 294, 115 S. Ct. at 1490. Also, because debts are often collected through the judicial process, see id. at 294, 115 S. Ct. at 1491 (citing Black’s Law Dictionary 263 (6th ed. 1990) (“To collect a debt or claim is to obtain payment or liquidation of it, either by personal solicitation or legal proceedings.”)); O’Rourke v. Palisades Acquisition XVI, LLC, 635 F.3d 938, 949 (7th Cir. 2011) (Tinder, J., concurring in the result) (citing § 1692a(2)) (noting that courts are a medium through which debt collection information is conveyed to consumers), we think it would “compel absurd results” indeed if abusive, misleading, or unconscionable documents submitted to a court (and served on the consumer or his counsel) in an attempt to collect on any debt were excluded from the Act’s proscriptions, see Jerman, 559 U.S. at 600, 130 S. Ct. at 1622. Appellees cannot avoid the FDCPA by arguing that the sworn reply was primarily directed to the state court.

[9] See Jeter, 760 F.2d at 1179 (citing S. Rep. No. 95-832, at 4 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1698) (“Ordinarily, whether conduct harasses, oppresses, or abuses will be a question for the jury. Nevertheless, Congress has indicated its desire for the courts to structure the confines of § 1692d.”).

[10] While we have determined that the FDCPA applies to debt-collection activities directed to a consumer’s attorney, the standard by which such claims should be evaluated is a different question. Appellees reasonably suggest that the “least sophisticated consumer” standard is inappropriate for evaluating the tendency of conduct or language to deceive or mislead a consumer’s attorney. The Seventh Circuit, among others, has adopted a “competent lawyer” standard to determine whether a communication or representation to a consumer’s attorney would deceive or mislead that attorney under § 1692e. See Evory, 505 F.3d at 774-75; see also Powers v. Credit Mgmt. Servs., Inc., 776 F.3d 567, 574 (8th Cir. 2015). We do not adopt or reject such a standard here because, if Appellant cannot make the minimal showing under Jeter, he is necessarily unable to demonstrate that individuals held to a higher standard of competence, be it an attorney or a state court judge, could be misled or deceived by the sworn reply.

[11] Generally, “whether the `least sophisticated consumer’ would construe [the conduct] as deceptive is a question for the jury.” Jeter, 760 F.2d at 1178. However, whether Appellant alleged facts sufficient to state a claim under § 1692e(10) is a legal question for the court. See Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1367 (11th Cir. 1997) (“Facial challenges to the legal sufficiency of a claim or defense. . . . always present[] a purely legal question. . . .”).

[12] As suggested above, whether an attorney would find Appellees’ conduct unfair or unconscionable is a question different from whether the least sophisticated consumer would find Appellees’ conduct unfair or unconscionable. See supra note 10. However, given the circumstances of this case, we need not traverse that quagmire today.

[13] Appellant’s allegation that Appellees filed the sworn reply in a bad faith attempt to leverage a settlement of the subject debt is a legal conclusion, which we are not required to treat as true. See Iqbal, 556 U.S. at 678, 129 S. Ct. at 1949.

Reuters-

The Federal Housing Finance Agency disclosed on Thursday that it paid two law firms over $373 million since 2010 to pursue litigation against several banks over mortgage-backed securities sold to Fannie Mae and Freddie Mac before the financial crisis.

The FHFA, which has acted as conservator for Fannie and Freddie since the government took them over in 2008, disclosed the sums in response to a Freedom of Information Act request by Reuters.

The disclosure marked the first time the FHFA had said how much it had paid Quinn Emanuel Urquhart & Sullivan LLP and Kasowitz Benson Torres Friedman LLP.

 [REUTERS]

He has a special thanks to give to the Obama Administration.

Bloomberg-

Goldman Sachs Group Inc. made hundreds of partners rich when it went public in 1999. Its performance since then has turned Lloyd Blankfein into a billionaire.

The chief executive officer of the Wall Street bank for the past nine years, Blankfein has seen his net worth surge to about $1.1 billion as the firm’s shares quadrupled since the initial public offering, according to the Bloomberg Billionaires Index. As the largest individual owner of Goldman Sachs stock, he has a stake in the company worth almost $500 million. Real estate and an investment portfolio seeded by cash bonuses and distributions from the bank’s private-equity funds add more than $600 million.

For Blankfein, the son of a New York postal worker, the accumulation of wealth has been dramatic. He’s one of the few current leaders of a big global bank who reached a senior-executive rank before his firm went public. That won’t happen again anytime soon, as Goldman Sachs was the last major Wall Street firm to end its private partnership.

 [BLOOMBERG]

image: Reuters

Credit Slips-

Yesterday, Judge Amy Totenberg of the Northern District of Georgia issued a very cogent 70-page opinion in the case of the CFPB v. Frederick Hanna & Associates, a large collection law firm with offices in Georgia, Florida, and South Carolina. The opinion denies Hanna’s motion to dismiss in its entirety, and almost completely agrees with the CFPB’s legal theory. In doing so, the opinion deals a serious blow to the collection law firm business model.

A brief recap of the case if you haven’t been following. A year ago, the CFPB filed suit against the Hanna law firm essentially attacking the big collection law firm business model. Among other things, the CFPB alleged that the firm operated “less like a law firm than a factory” and that attorneys were not “meaningfully involved” in the collection lawsuits they filed. As an example, the CFPB alleged that one attorney in the Hanna firm signed about 138,000 lawsuits between 2009-10. That’s 189 lawsuits per day, 7 days a week, 52 weeks a year.

The second CFPB claim was that in filing most of its lawsuits on behalf of debt buyers, the law firm “knew or should have known that many of the[] affidavits [they filed] were executed by persons who lacked personal knowledge of the facts.” The Bureau sued under both the Fair Debt Collection Practices Act (FDCPA) and the Consumer Financial Protection Act (CFPA) for what it alleges were false or misleading and unfair acts and practices.

 [CREDIT SLIPS]

Members Call for More Transparency after Legislation Gutted Dodd-Frank Provision

Crain’s-

Goldman Sachs Group Inc. reported second-quarter earnings that fell 49% from a year earlier on higher legal costs tied to a potential settlement of mortgage-related probes.

Net income dropped to $1.05 billion, or $1.98 a share, from $2.04 billion, or $4.10, a year earlier, the New York-based company said Thursday in a statement. Excluding the legal costs, earnings were $4.75 a share, beating the $3.96 average estimate of 24 analysts in a Bloomberg survey.

Goldman Sachs set aside $1.45 billion for litigation and regulatory proceedings this quarter, about five times more than a year earlier. The firm is in talks to be the latest major bank to settle a Justice Department probe into sales of mortgage securities before the financial crisis.

 [CRAIN’S]

ibtimes-

On the campaign trail, Hillary Clinton is selling her version of economic populism, including calls for Wall Street executives who engage in financial wrongdoing to be held accountable more than they have been under President Barack Obama. She has pushed that message hard as she seeks to win support from the Democratic Party’s liberal base, with a speech Monday and a follow-up statement from her campaign the next day.

“Yesterday, Hillary said that when Wall Street executives commit criminal wrongdoing, they deserve to face criminal prosecution. Not a slap on the wrist, not a fine paid by their employers — prosecution,” said an email to supporters from Gary Gensler, a former Goldman Sachs executive-turned-government regulator now serving as a top Clinton campaign official.

Raking In Donations

Clinton’s outrage, though, did not stop her family’s foundation from raking in donations from many of the same banks that secured government fines rather than face full-scale prosecution. The Clinton Foundation has accepted $5 million worth of donations from at least nine financial institutions that avoided such prosecution — even as they admitted wrongdoing. These include Barclays, HSBC and UBS, all of which entered into agreements with the Justice Department that allowed their employees to avoid criminal charges. The Clintons also personally accepted nearly $4 million in speaking fees from those firms since 2009.

 [IBTIMES]

image: Reuters/Stephen Lam

The Intercept-

Three top Democrats are accusing the Department of Housing and Urban Development of quietly removing a key clause in its requirements for taxpayer-guaranteed mortgage insurance in order to spare two banks recently convicted of federal crimes from being frozen out of the lucrative market.

HUD’s action is the latest in a series of steps by federal agencies to eliminate real-world consequences for serial financial felons, even as the Obama administration has touted its efforts to hold banks accountable.

In this sense, the guilty plea has become as meaningless to banks as their other ways of resolving criminal charges: out-of-court settlements, or deferred prosecution agreements. “Too Big to Fail” has morphed into “Too Big to Jail” — and then again, into “Bank Lives Matter.”

[THE INTERCEPT]

CONTACT: Bill Sorrell, Attorney General, (802) 828-3171

YoungLawGroup-

A small but closely watched number of Long Island homeowners are asking judges to dismiss foreclosure cases against them, saying lenders missed New York’s six-year deadline to file such lawsuits.

Already, a judge has thrown out a Sound Beach couple’s foreclosure case because the lender took too long to file its second lawsuit, after the first one was dismissed. The case has drawn intense scrutiny from attorneys who represent homeowners and lenders. In interviews with Newsday, attorneys said more homeowners have filed court papers seeking the same result.

As Long Island struggles to emerge from its yearslong foreclosure crisis, the deadline could mean a yet-to-be-determined number of Long Island homeowners win their foreclosure cases and stay in their homes.

[YOUNG LAW GROUP]