One law that we frequently use to recover money for members of the public
is the Fair Debt Collection Practices Act, also known as the FDCPA. The
FDCPA applies to debt collectors and forbids them from engaging in certain
activities. One section of the FDCPA prohibits mortgage servicers who
are foreclosing on a consumer from directly communicating with that consumer
if the servicer knows the consumer to be represented by counsel, as part
of an attempt to collect a debt. What does that mean? It means the bank
should not be sending bills to the person they are suing, those bill should
be sent to that persons lawyer. This law is violated very frequently and
we have successfully prosecuted many lawsuits against debt collectors
who have violated it.
One defense which mortgage servicers raise against FDCPA cases with great
regularity, though rarely successfully, is the Truth in Lending Act, also
known as TILA. TILA governs certain conduct by mortgage servicers, among
other things, the sending of monthly mortgage statements. One portion
of TILA requires that mortgage servicers send out monthly statements to
consumers. Mortgage servicers have tried to use this portion of TILA to
try to defend against FDCPA cases, claiming that they are required to
send the monthly statements directly to the borrowers and therefore can
send bills directly to our clients. This argument has rarely if ever worked
against our office and local judges seem to realize the requirement to
send statements under TILA does not require that they are sent to the
consumer directly, only that they are sent. Sending them to a consumer’s
attorney of course satisfies that requirement. Still, it is good to see
that this interpretation of the FDCPA and TILA is spreading to other jurisdictions.
Judge Peck recently adopted this interpretation in the case of Carey v.
Everbank in Hernando County, Case No. 14-CC-142 where he ruled that:
“The Court finds that Fla. Stat. 559.72(18) is not preempted by 12
CFR 1026.41 and that simultaneous compliance with both 12 CFR 1026.41
and Fla. Stat. 559.72(18) can be achieved by sending the monthly mortgage
statements required by 12 CFR 1026.41 to legal counsel for a consumer.
The Court rejects Defendant's arguments to the contrary.”
This document has been provided for informational purposes only and is
not intended and should not be construed to constitute legal advice. Please
consult your attorney in connection with any legal issues related to the
matters discussed in this article as the applicability of state, local
and federal laws may vary.