Source: http://stopforeclosurefraud.com/author/dinsfla-2/
Timestamp: 2019-04-22 23:00:49+00:00

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Almost five years ago our listeners were astonished by the frank revelations of a highly credentialed Big Five Banker vacationing in Hawaii during Christmas 2014, who freely welcomed appearing on The Foreclosure Hour, and openly admitted how he and his Big Five colleagues had been abusing homeowners without any effective regulation by either the Government or the Courts.
“Larry the Banker,” continuing to request that we not use his real name for privacy purposes, is again back in Hawaii on vacation on Kauai this Easter, and in an exclusive sit down with him last Wednesday morning, he told me that from his colleagues’ perspective nothing has really changed, although some courts seem to be increasing their understanding of how crooked the secondary mortgage market really is, but appear not to know what to do about it.
Although I invited Larry to return for a second interview this Easter Sunday and he accepted, his family obligations on Kauai unfortunately have made that impossible for him at the very last minute, so I thought the next best thing would be to replay his 2014 appearance on The Foreclosure Hour, since we have had an enormous increase in the number of new listeners since then, particularly on the U.S. Mainland.
Meanwhile, Larry has promised to be on our radio show live again when he next returns to Hawaii.
He has asked that if our listeners have any questions that they would like him to answer when he returns, unlike last time when he reports he was surprised by the depth and quality of the questions, he would appreciate having the questions beforehand in order to be more responsive.
However, he advises that he feels that it would be improper for him if asked to comment on ongoing individual cases. Please therefore ask your questions of him of a general nature only.
Your written questions for Larry’s next appearance would be appreciated. You can email your questions to him at info@foreclosurehour.com and we will be sure to get your questions to Larry.
Please be with us this Sunday with “Larry the Banker” for exclusive, valuable insight into what is really happening on the dark side.
Bayview Loan Servicing LLC v. Wicker, Case No. 3 WAP 2018, — A.3d —-, 2019 WL 1388516 (Pa. Mar. 28, 2019), clarifies that in Pennsylvania state court, a servicer pursuing foreclosure may succeed in getting loan records from prior servicers admitted into evidence without testimony from every prior servicer.
In a ruling favorable to mortgage servicers, the court refused to adopt a “bright line rule forbidding the authentication of documents recorded by a third party.” Instead, the court ruled that trial courts have broad discretion to allow admission of such third-party records under Pennsylvania Rule of Evidence 803(6).
Business records, including mortgage loan histories, are hearsay. But when a business can provide a witness to testify that someone with personal knowledge prepares its records, at or near the time of the event they record, and that it regularly keeps such records in the ordinary course of business, those records become admissible under Rule 803(6) unless they are untrustworthy.
Although Justice Breyer’s conclusion is based on a straight forward textual analysis, it is overly academic, detached from the realities of debt collection, and misses the obvious intent of this important consumer protection law.
On March 20, 2019, the Supreme Court handed down its decision in Obduskey v. McCarthy & Holthus, which sought to end a debate about whether the enforcement of security interests by non-judicial foreclosure is considered “debt collection” within the meaning of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §1692 et seq. Justice Breyer, writing for a unanimous court, upheld the lower courts’ determinations that the foreclosing law firm in a non-judicial foreclosure was doing “no more than” enforcement of a security instrument and was thus not a covered “debt collector.” Although the Justice’s conclusion is based on a straight forward textual analysis, it is overly academic, detached from the realities of debt collection, and misses the obvious intent of this important consumer protection law.
The FDCPA defines a debt collector as “any person … in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts.” 15 U.S.C. §1692a(6). The Justices agree that this primary definition would clearly cover law firms seeking to enforce a foreclosure claim, judicially or non-judicially, were it not for a single clause at the end of the definition: “[f]or the purpose of section 1692f(6) of this title, such term also includes any person … in any business the principal purpose of which is the enforcement of security interests” (emphasis added). The Court concludes that non-judicial foreclosures seek only to enforce a bank’s security interest in the mortgaged home, and so this “limited-purpose definition” applies to law firms engaged in non-judicial foreclosures. Thus, the majority of the provisions of the FDCPA no longer apply to law firms foreclosing on homes in non-judicial foreclosure states. The Court does not, however, extend this ruling to judicial foreclosures; foreclosing law firms in judicial foreclosure states remain subject to all the provisions of the FDCPA.
Judge Beatrice Butchko’s order floats the possibility of sanctions if the bank fails to produce discovery documents the judge ordered it to release in August 2018.
A major bank looking to foreclose on a Miami-Dade resident’s mortgage has been handed an order to show cause by a judge over a discovery dispute.
Miami-Dade Circuit Judge Beatrice Butchko issued the order against U.S. Bank N.A. on Monday. Her ruling follows an Aug. 20, 2018, discovery order requesting the bank submit within 60 days documents tracing the company’s internal handling of the loan to foreclosure defendant Raul Zayas in the five-year-old case.
Among the documents the defense had requested: screenshots showing the dates U.S. Bank had uploaded the original note and other loan documents into its system, along with loan origination documentation. The court ordered the plaintiff to turn over the information. It also ordered the plaintiff to arrange depositions with company officials.
A U.S. District Court of the Northern District of California judge tossed a lawsuit against PHH Mortgage Corp. and Morgan Stanley Private Bank.
On April 2, Magistrate Judge Nathanael M. Cousins granted an order in favor of a PHH and Morgan Stanley’s motion to dismiss Eric McAfee and Marguerite McAfee’s lawsuit against them.
The McAfees initially sued the defendants in Santa Clara County Superior Court in August 2018 for an alleged failure to ensure that they were considered for all foreclosure prevention alternatives, negligent misrepresentation, failure to reinstate their mortgage loan, and violation of California’s Unfair Competition Law. The ruling states the defendants recorded a notice of default in January 2018 because the plaintiffs were more than $150,000 behind on their mortgage for their Saratoga home.
You lost your foreclosure case by summary judgment or at trial. What if anything can you do now to save your home or secure damages for wrongful foreclosure?
Increasingly, more and more homeowners nationwide are contacting John and me, asking that same question.
Unfortunately, we do not have the time to respond personally to each such inquiry, so today approaching Easter Sunday we thought it would be a good idea to address that question on this Sunday’s radio show.
As you know, there is little consistency among jurisdictions how foreclosures are handled judicially, and even less consistency when it comes to the provision of post-judgment remedies, or the lack thereof.
Therefore, on today’s show, time permitting, our attempt can only be to present our listeners with an overview or roadmap of what homeowners face post-judgment.
You will further discover that individual jurisdictions themselves may be in a growing transition concerning what your post-judgment remedies are and might be in your individual case, adding to the difficulty in your securing a post-judgment remedy.
Until recently, all state and federal courts accepted the view, for instance, that if the court that entered judgment against you lacked jurisdiction, its judgment could be set aside at any time as void.
That however is no longer the case, as “finality” has been winning against “validity” in American courts in recent decades for many reasons, including the existence of increasing case backlogs, narrowing judicial budgets, and the fear of opening up the floodgates for past zombie adjudications.
To map out a plan for overturning an adverse foreclosure judgment, one must begin if possible by determining why you lost, which will have a direct impact on what if anything can be done in your individual case.
Some of those reasons might be that you defaulted failing to defend, or your pleadings were defective, or you did not have the money to do what needed to be done, or you had a bad judge, or your facts were poor, or the law was against you, or you had an attorney who was not sufficiently skilled, or the opposing attorney out-argued you.
Trying to understand why you lost, the next step is to plan your assault post-judgment, either as a direct attack on the judgment or as a collateral attack, or eventually both, if you have the money.
A direct attack, again after first determining if possible why you lost, can consist of a motion for reconsideration, an appeal, a request for a stay, and a petition for a writ of certiorari filed as high eventually as the United States Supreme Court, while the odds of success shrink the higher you appeal.
A collateral attack can consist of a Rule 60(b) Motion to set aside the judgment, or a new lawsuit for fraud on the court or wrongful foreclosure or to quiet title or for expungement, or a bankruptcy filing (Chapters 7, 11 of 13), or a writ of mandamus, or a writ of prohibition, or a new lawsuit for injunctive and declaratory relief.
Depending on your post-judgment plan for relief, whether a direct attack and/or a collateral attack on the judgment, there are numerous strategies, often interrelated, available to you (in addition to those claims and defenses that could be raised prior to judgment) depending on the law of your jurisdiction and, if known, why you lost.
Among such strategies where applicable are claims that the judgment is void, or the judgment was procured by fraud on the court, or due to supervening authority of retroactive applicability, or there was a lack of personal jurisdiction, or there was a lack of subject matter jurisdiction, or there was a lack of due process particularly procedural due process, or the judge was disqualified, or whatever specific objections you may have made below that were rejected or ignored.
And you should anticipate a variety of counter-attacks, consisting of motions to dismiss or for summary judgment, based upon claims that the judgment is voidable not void, or that your supervening authority is prospective in its application only, or due to laches as a result of your delay and reliance by others on the judgment, or res judicata and its twins collateral estoppel and claim preclusion, or issues of privity due to res judicata involving the same subject matter where one with the same related standing as yours lost, or the bonafide purchaser defense, or faulting your timing, or waiver including a failure to object below on the same grounds, or your lack of standing as a mere third-party purchaser, or the absence of tender, or the expiration of the statute of limitations.
If nothing else, the above illustrates how complex and how expensive this area of the law has become to litigate in, and why homeowners without sufficient money are at an extreme disadvantage, especially when usually unable to find competent legal counsel almost anywhere.
Please join John and me as we share with you our knowledge and experience, and summarize for you this expansive and little understood but increasingly important area of post-judgment foreclosure defense.
We regularly counseled lenders, even before the Talaganov case, that they should try to “ride the coattails” of the senior mortgagee’s foreclosure suit by answering the complaint and seeking any surplus. Failure to participate in the foreclosure will eventually result in the junior lender being proscribed from seeking surplus funds that will exist in some cases.
Commercial lenders often take junior or second mortgages on real estate as additional collateral for loans. Unfortunately, because those junior liens are subordinate to the senior liens, they are subject to being eliminated through the foreclosure process if the primary lienholder files suit to foreclose. Oftentimes the junior lender gives-up on the second mortgage and seeks other ways to recover on its loan and does not bother participating in the foreclosure case filed by the senior mortgagee. The decision to walk away from the junior mortgage, however, should be reconsidered.
In the case of JP Morgan Chase Bank v. Talaganov, the junior mortgagee, RBS Citizens, filed an answer to the foreclosure filed by Chase in which it stated that RBS had a mortgage lien, but admitted that Chase had a senior mortgage lien. RBS requested in its answer that it be entitled to any surplus funds. The court eventually entered the judgment of foreclosure and sale, which noted that RBS had a valid junior mortgage in the amount of “TBD.” After the property was sold, a surplus of $66,043.74 existed, which RBS and Talaganov both sought.
In an assurance of discontinuance filed in Suffolk Superior Court, Caliber has agreed to provide restitution and loan modifications to homeowners in Massachusetts and change its business practices to comply with state law.
The AG’s Office alleges Caliber violated the Massachusetts Act Preventing Unlawful and Unnecessary Foreclosures, known as “35B,” a landmark law passed in 2012 that protects certain borrowers from foreclosure. The law requires creditors to make a good faith effort to avoid foreclosure for borrowers whose mortgage loans have unfair subprime terms.
The AG’s Office began its investigation after observing through the AG’s consumer assistance work that Caliber predominantly offered struggling homeowners loan modifications with payments that were temporarily lower and only covered the interest due on the loan each month. After a few years, however, borrowers would see their mortgage payments balloon to an amount even higher than what they originally were paying and could not afford, setting borrowers up to again face foreclosure.
The AG’s investigation found that Caliber favored these short-term, interest-only loan modifications over permanent, affordable modifications even in cases where a permanent modification was commercially reasonable. The company also routinely gave borrowers the runaround about missing documents required for the loan modification review process.
Under the terms of the settlement, Caliber will provide loan modification relief to Massachusetts borrowers who applied for modifications and were foreclosed upon due in part to Caliber’s conduct. Caliber will also institute a new loan modification program and review Massachusetts borrowers currently on interest-only or short-term modifications to provide them a more sustainable, affordable modification.
The AG’s Office has been a national leader in securing restitution and other relief for borrowers from banks and servicers. The office has obtained recoveries and other relief from Morgan Stanley, Goldman Sachs, Royal Bank of Scotland, Citigroup, JPMorgan Chase, Countrywide, Fremont Investment & Loan, Option One, HSBC, Ditech, Nationstar Mortgage, Shellpoint Mortgage Servicing, PHH and others on behalf of Massachusetts homeowners.
Consumers with questions or concerns about deceptive or abusive foreclosure and loan servicing practices can call the Attorney General’s consumer hotline at 617-727-8400 or file a complaint with the office.
This matter was handled by Assistant Attorneys General Michael Lecaroz and Lisa Dyen and Division Chief Max Weinstein, all of the AG’s Consumer Protection Division.
The Colorado Court of Appeals has overturned a $119,500 civil penalty imposed against a foreclosure law firm accused of violating consumer fraud laws by failing to disclose an ownership interest in a side business.
Judge Morris Hoffman of Denver had imposed the penalty against the Castle Law Group for failing to tell Fannie Mae and Freddie Mac about its interest in a company that posted notices on properties targeted for foreclosure.
But the court of appeals ruled Thursday that the judge erred because the alleged deceptive practice did not have a significant impact on consumers, the Denver Post reports.
Judge David Miller’s wrote that the specific application of the Florida Fair Foreclosure Act—a 2013 law created in response to the housing crisis— to a case before him was at odds with the Florida Constitution.
A portion of a Florida law created to deal with a deluge of foreclosure cases has been declared unconstitutional by a Miami-Dade Circuit Judge.
Judge David Miller found the Florida Fair Foreclosure Act violates provisions of the Florida Constitution by retroactively altering the terms of contracts. He issued the order March 30 in a foreclosure case, U.S. Bank National Association vs. Ricardo Rivas, et. al.
The 2013 law was meant to alleviate the heavy load of foreclosure cases on Florida courts, and allow lenders to request expedited foreclosures.
Posted on 07 April 2019.
This important broadcast, first exclusively airing on The Foreclosure Hour on July 17, 2016, is being repeated because homeowners are still largely under-using this powerful weapon against foreclosure, given the sloppiness and dishonesty of loan servicers, although it is available in virtually every mortgage and deed of trust situation.
John Waihee and I are pleased to have heard from many of our listeners that since that first broadcast they have used this defense successfully and easily to defeat summary judgments, even when appearing pro se, but too many homeowners and even their counsel are still inexcusably overlooking this powerful defense.
Not only will its knowledgeable use almost always defeat a foreclosure summary judgment no matter in what jurisdiction a borrower resides, but it can also result in a foreclosure action being dismissed entirely and with prejudice, or result in an extremely attractive settlement once your pretender lender and its loan servicer and their attorneys for a change have their backs embarrassingly up against an evidentiary wall.
All a borrower facing foreclosure needs to know about this “bunker buster” foreclosure defense mega-weapon is contained within this one hour rebroadcast. You cannot afford to miss a minute of it.
This is, moreover, just another glaring example of how vulnerable foreclosure rules really are in court once one understands both how to use evidentiary objections correctly and why most judges, far from being stupid or corrupt, have nevertheless become brainwashed into mistakenly believing blindly that borrowers facing foreclosure are just deadbeats who have not paid their mortgages and whose arguments are not worthy of evidentiary review.
You will also gain valuable insight from this rebroadcast into how judges historically have become misled by the legal system’s defective rule reasoning, what we have termed “The Rule Ritual,” mistaking “Rule Statements” for “Rules,” without digging into the purposes behind the rule statements, which homeowners with an increased understanding can, turning the tables on lenders as it were, use to their winning benefit.
Please join John Waihee and me for the rebroadcast of our Foreclosure Workshop #16, and you will quickly gain this uniquely specialized knowledge, as many of our listeners already successfully have, about Paragraph 22 and its companion Rule 19 embedded within Fannie Mae and Freddie Mac prescribed forms, that could well save your home from foreclosure and your family from eviction.
This affirmative defense is contractual, in that it is an uncontested condition precedent to a lender’s ability to foreclosure, period, especially written into the language of standard mortgages and deeds of trust, and even were it absent in your loan documentation, courts have considered it to be contractually required under the common law, Santiago v. Tanaka, 137 Haw. 137, 157, 366 P.3d 612 (2015).
HABITAT II CONDOMINIUM, INC., a Florida not-for-profit corporation, Appellee.
No. 4D18-1517.District Court of Appeal of Florida, Fourth District.March 27, 2019.Appeal of a non-final order from the Circuit Court for the Seventeenth Judicial Circuit, Broward County; John B. Bowman, Judge; L.T. Case No. CACE 15-019601 (02).
Lorenzo A. Allen, Parkland, pro se.
Tara N. Mulrey of Katzman Chandler, Fort Lauderdale, for appellee.
Lorenzo A. Allen appeals an order denying in part his Florida Rule of Civil Procedure 1.540 motion to vacate a foreclosure judgment and to set aside the sale. He argues the judgment is void because he did not have notice of the final hearing. He also argues that the trial court erred in denying his rule 1.540 motion without an evidentiary hearing. We agree that he is entitled to an evidentiary hearing.
Habitat II Condominium, Inc. (Habitat) filed a complaint against Allen and other owners of a condominium to foreclose a lien for $3,460 in unpaid assessments. Allen was served with the complaint by substitute service on his daughter at his residence. He did not answer. Habitat moved for default and, later, summary judgment. The motions and the notices of hearing were mailed to a different address. Allen did not appear at the final hearing, the trial court entered a foreclosure judgment, and the property was sold.
Just over a year after the final judgment, Allen filed a verified rule 1.540 motion arguing that his due process rights were violated by mailing the motions and notices of hearing to the wrong address, which rendered the judgment void. Without holding an evidentiary hearing, the trial court denied the motion in part, simply stating that the judgment stands, but a hearing will be set as to amounts. The order does not include any findings or any explanation.
On appeal Allen argues that the judgment was void and the court erred in denying his rule 1.540 motion without an evidentiary hearing. Habitat did not file an answer brief.
“It is well settled that a judgment entered without notice to a party is void.” Taylor v. Taylor, 67 So. 3d 359, 362 (Fla. 4th DCA 2011) (quoting Watson v. Watson, 583 So. 2d 410 (Fla. 4th DCA 1991)); see also Wells Fargo Bank, N.A. v. Michaels,166 So. 3d 226, 227 (Fla. 5th DCA 2015); Touloute v. City of Fort Lauderdale, 80 So. 3d 1129 (Fla. 4th DCA 2012).
Allen’s motion stated a colorable claim of entitlement to relief and should not have been denied without an evidentiary hearing. See Jones v. Gov’t Employees Ins. Co., 192 So. 3d 614, 615 (Fla. 4th DCA 2016); Schuman v. Int’l Consumer Corp.,50 So. 3d 75, 77 (Fla. 4th DCA 2010).
Accordingly, we reverse and remand for an evidentiary hearing on Allen’s claim that he did not have notice of the final hearing.
GERBER, C.J., TAYLOR and CONNER, JJ., concur.
For years, organizations that work with community associations, along with association residents, have lobbied for reforms to the foreclosure system in New Jersey. As of this writing, two bills currently sit on Governor Murphy’s desk which, when signed, will make small strides towards easing the burden felt by community associations when saddled with numerous properties in foreclosure.
In the aftermath of the financial crisis and housing bubble, New Jersey quickly claimed the infamous honor of leading the nation in annual foreclosures, with more than 70,000 foreclosures each year. Due to the length of time needed to complete a foreclosure (estimated at the end of 2017 to average 1,300 days), community associations have routinely been faced with subsidizing units being foreclosed upon for long stretches of time.
Making matter worse, many lenders have chosen to delay foreclosure efforts on vacant and abandoned units. When a unit or home in a community association stops paying maintenance fees, the burden falls on all other owners in that community to pick up the tab. If the lender delays foreclosure of that unit, or if the court system is otherwise unable to timely complete the foreclosure, the burden on the association and its members is felt for years.
Our listeners are well aware of the basic foreclosure defenses discussed by John and me on many of our previous shows, such as non-receipt of an adequate default and cure notice or receipt of none at all, the lack of standing of a foreclosing plaintiff, the absence of personal jurisdiction due to improper service of process, the expiration of the statute of limitations, and so forth.
But few if any homeowners or judges for that matter are aware of yet many other mostly ignored foreclosure defenses that go overlooked through ignorance, camouflage, or deception.
Yet those otherwise stealth foreclosure defenses in one form or another are amply available to litigants in most non-foreclosure cases nationwide.
One can therefore expect that at least some of these otherwise well recognized defenses will find their way into foreclosure litigation, and will begin to save homeowners from foreclosure and eviction, but only if homeowners, including our listeners this Sunday, with such knowledge, make that effort in individual cases.
Here are at least twenty of these most overlooked foreclosure defenses to be discussed, time allowing, on today’s show; how many are you familiar with?
1. Loan modifications do not first require payment defaults.
2. Limitations on the recovery of foreclosure attorneys’ fees.
3. The estates of deceased joint homeowners are still necessary and indispensable parties.
4. Service by publication is unconstitutional absent clear evidence of exhausted due diligence attempts at personal service first.
5. Expungement actions are more effective than mortgage and deed of trust misnamed “quiet title” actions.
6. Lawyers are prohibited from appearing in Court as both foreclosure attorneys and material witnesses.
7. Pretender lenders in order to support standing are required to prove that they paid for the loan before being able to show injury as a result of loan default.
8. Judges owning stock in a party, if researched and proven, should recuse themselves or be disqualified.
9. Violations of the AG Settlement and other Sanction Orders can be enforced in individual cases by suing State Attorneys General for negligence in non-enforcement.
10. Individual whistle blowing REMIC actions can be effective regarding nonpayment of State taxes.
11. Foreclosure attorney representation needs to supported by disclosure of legal services agreements between lenders, loan servicers, government sponsored entities, and foreclosure law firms.
12. Homeowners are a protected class under federal and state securities laws since securitized loans are securities from their inception.
13. Various provisions of federally sponsored mortgage and deed of trust forms are unenforceable against borrowers as adhesion clauses.
14. The affirmative defense of anticipatory breach, sometimes called anticipatory repudiation, can be used to attack pretender lender standing in several effective ways.
15. Most promissory notes are not negotiable instruments and therefore cannot be enforced merely by endorsement or possession.
16. Foreclosure deficiency judgments are unconstitutional when not based on the true value of the foreclosed property at time of sale confirmation.
17. There are state public policy abstention objections to federal court removal of foreclosure related cases.
18. There are securitized trust REMIC violations that can be objected to that prove a lack of standing to foreclose which are unrelated to the enforcement of securitized trust contract agreements of which borrowers have no standing otherwise to object to.
19. Insurance proceeds as well as government and assignor discounts diminish pretender lender claims to loss, barred by the affirmative defense of unjust enrichment.
20. The remedy against robo-signers and robo-endorsers and robo-notaries is suing the head of the recording office for expungement at the recording office.
Please join John and me this Sunday to learn about these overlooked foreclosure defenses.
A South Jersey foreclosure firm in the process of closing will not have to go into receivership because of an alleged six-figure debt to a legal advertising firm, a federal judge has ruled.
U.S. District Judge Gene E.K. Pratter in the Eastern District of Pennsylvania on March 22 denied Mansfield Advertising’s request for the appointment of a receiver for Udren Law Offices.
Mansfield Advertising of Philadelphia sued Cherry Hill-based Udren Law Offices in August, claiming the law firm failed to pay more than $138,000 in legal advertising fees. Udren Law represented lenders and mortgage servicers on real estate matters in Florida, New Jersey and Pennsylvania.
This week, in a unanimous decision, the Supreme Court held that law firms conducting nonjudicial foreclosures are not “debt collectors” under the Fair Debt Collection Practices Act.
McCarthy & Holthus LLP (McCarthy) sent the petitioner, Dennis Obduskey, correspondence regarding the foreclosure of his Colorado home in 2014, about five years after he defaulted. Obduskey responded with a letter invoking the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §1692g(b), which provides that if a consumer disputes the amount of a debt, a “debt collector” must “cease collection” until it “obtains verification of the debt” and mails a copy to the debtor. When McCarthy initiated a nonjudicial foreclosure action, Obduskey sued, alleging that McCarthy failed to comply with the FDCPA’s verification procedure. The District Court dismissed on the ground that McCarthy was not a “debt collector” within the meaning of the FDCPA, and the Tenth Circuit and Supreme Court affirmed.
Section 1692f(6) provides that it is an unfair or unconscionable practice to take or threaten to take nonjudicial action to effect dispossession of property under certain circumstances. In Obduskey, the Court held that the specific prohibitions contained in section 1692f(6) apply to McCarthy’s security interest enforcement, which includes nonjudicial foreclosure (a process by which the sale of a secured interest happens outside of court supervision, and the creditor is unable to hold a homeowner liable for the balance). But because McCarthy’s security enforcement activity did not fall within section 1692a(6)’s primary definition of “debt collector,” the Act’s other provisions—including debt verification—did not apply to the firm in the Obduskey dispute.
This decision should provide some relief to lenders and the foreclosure law firms who assist them, provided they comply with federal and state law prohibitions on unfair, deceptive, and abusive practices.
The U.S. Supreme Court on Wednesday unanimously ruled that foreclosure lawyers are not debt collectors, ending a Colorado man’s years-long effort to gut the state’s century-old public trustee foreclosure system.
As such, the attorneys representing Wells Fargo Bank in its efforts to foreclose on Dennis Obduskey’s home in Bailey are not subject to comply with a broad array of consumer protections mandated by the federal Fair Debt Collection Practices Act, such as proving the bank actually has the right to foreclose.
The 9-0 decision in Obduskey v. McCarthy & Holthus LLP primarily keeps intact nonjudicial foreclosure processes that occur in Colorado and 32 other states.

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