Opinion ID: 179062
Heading Depth: 4
Heading Rank: 3

Heading: April 12, 2004 Letter

Text: Maynard’s primary contention is that Cannon violated the FDCPA in its April 12, 2004 letter. On April 7, 2004, after receiving the notice of foreclosure, Maynard sent Cannon a letter disputing the entire debt and requesting backup loan documents and confirmation of the amount of the disputed claim. In response, on April 12 Cannon sent a letter providing copies of the deed of trust, the loan agreement, and a itemization of the loan amount at $131,536.06. Further, Cannon informed Maynard, “We hereby, upon review of this file, confirm that Judith W. Maynard is the individual against whom the claim is being made and that the amount of the claim is $131,536.06, together with interest as may be appropriate under the law.” Aplt. App., Vol. I, p. 64. Maynard contends the April 12 letter violated the FDCPA, and points to three provisions of the Act supporting liability.
Maynard first argues the April 12 letter violated § 1692g. In the event a consumer disputes any portion of a debt being collected, § 1692g(b) requires that “the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment . . . and a copy of such verification or judgment . . . is mailed to the consumer by the debt collector.” (Emphasis added.) The statute does not detail what information must be included in the verification. -13- In its April 12 letter, Cannon listed the initial amount of the mortgage as $131,536.06, provided the deed of trust, a copy of the loan agreement, and various other loan documents. Maynard claims the listed loan amount was incorrect, that she in fact owed a different amount, or that Cannon should only have listed the amount by which this loan was in default, since under Utah law she had the right to pay only the defaulted amount to reinstate the mortgage. See U TAH C ODE A NN . § 57-1-31 (a debtor can reinstate a trust deed by paying only the defaulted amount within three months of initial default). Additionally, Maynard contends Cannon violated its responsibility to verify the loan. We disagree. This provision is not intended to give a debtor a detailed accounting of debt to be collected. Instead, “[c]onsistent with the legislative history, verification is only intended to eliminate the problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid.” Chaudry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999) (internal punctuation and citation omitted). Clearly, all Cannon was required to do under § 1692g was to identify the defaulted mortgage amount that was the basis for the foreclosure. In any event, at the time she received the letter Maynard already had obtained the disputed arrearage from the notice of default and directly from Household, from which she had obtained payoff amounts. Cannon was seeking to foreclose on the house, not collect the arrears on the mortgage, and so the fact that the April 12 -14- letter did not state the amount of default is irrelevant. Cannon correctly identified the original loan and the original lender, which is all that § 1692g required it to do. Maynard’s interpretation would take us to an absurd result. For example, by the time Cannon sent this letter, Maynard actually owed more than the original principal amount, due to accrued interest. She therefore is seeking to impose liability on a debt collector who either (1) overstated the amount due, by listing the original loan amount instead of the arrearage, or (2) understated the amount due, by listing only the original principal amount, not the total amount she owed with accrued interest. Her reasoning, that any incorrect statement of the amount owed, no matter in which direction the debt collector erred, nor the amount of the error, results in strict liability for the debt collector, is unfounded in the text of the FDCPA and is at odds with its purpose of preventing “abusive, deceptive, and unfair debt collection practices.” 15 U.S.C. § 1692. The FDCPA does not result in liability for every statement later alleged to be inaccurate, no matter how small or ultimately harmless. And, as the district court found, Maynard had obtained loan payoff information from Household and could not have been confused or misled by the information set forth in the letter. Finally, § 1692g is designed to prevent debt collection only in the case of a debt collector who has not performed the requested debt verification. See id. (“[T]he debt collector shall cease collection of the debt . . . until the debt -15- collector obtains verification . . . and a copy of such verification . . . is mailed to the consumer by the debt collector.”). This section does not require a debt collector to make a verification—a debt collector can simply cease collection efforts if it does not wish to make a verification. That is what happened here. Cannon had no further communications with Maynard after the April 12 letter that is asserted as the violation of § 1692g. This section only prohibits further debt collection until the debt has been verified—it does not ban the communication to the debtor that this section requires. Because we conclude Cannon complied with § 1692g(b) by naming the original creditor, and correctly identifying the mortgage amount in default, and because Cannon did not engage in any communication with Maynard after its letter, we conclude Cannon did not violate § 1692g.
Maynard next claims the April 12 letter was an attempt to collect an amount not permitted by law, in violation of § 1692f(1). She apparently bases this claim on the premise that Cannon was attempting to collect more money than she was obligated to pay under Utah law—the default amount. We disagree with her interpretation. Section 1692f(1) prohibits “unfair or unconscionable means to collect or attempt to collect any debt[, consisting of t]he collection of any amount (including interest, fee, charge, or expense incidental to the principal obligation) -16- unless such amount is expressly authorized by the agreement creating the debt or permitted by law.” The loan amount Cannon set forth in the letter was the legal and contractual basis for the foreclosure, and Cannon was merely attempting to foreclose on Maynard’s property, as permitted by Utah law. Furthermore, Cannon’s actions—whether in writing the April 12 letter or in initiating the nonjudicial foreclosure—were authorized by the loan agreement, permitted by the deed of trust, or contemplated by the FDCPA.
Finally, Maynard contends Cannon misrepresented the character, amount or legal status of the debt, in violation of § 1692e(2)(A). She claims Cannon misrepresented that the principal of her mortgage was “immediately due and payable.” Aplt. Br. 18. Tellingly, she does not cite to any portion of Cannon’s letter that states this—nor could she, for this letter says no such thing. Because this claim is based on no more than recharacterizing the contents of Cannon’s letter, we agree with the district court that Maynard has not presented sufficient evidence of a violation under this provision. -17-