“we hold that mortgage foreclosure is debt collection under the, Act. Lawyers who meet the general definition of a “debt collector” must comply with, the FDCPA when engaged in mortgage foreclosure. And a lawyer can satisfy that definition if his principal business purpose is mortgage foreclosure or if he “regularly” performs this function. In this case, the district court held that RACJ was not engaged in debt collection when it sought to foreclose on the property. That decision was erroneous, and the judgment must be reversed.”
Appeals Court Rules Foreclosures are “Debt Collection” Under FDCPA
The U.S. Court of Appeals for the Sixth Circuit Monday handed down an opinion that defined mortgage foreclosure actions as “debt collection” under the Fair Debt Collection Practices Act (FDCPA), reversing a lower court decision.
In Glazer v. Chase Home Finance, LLC, et. al., the appellate panel said that third parties initiating foreclosure actions must comply with the provisions of the FDCPA.
The case was brought by plaintiff Glazer after he inherited a home that still had an outstanding and active mortgage serviced by Chase. After six missed payments, Chase engaged with law firm Reimer, Arnovitz, Chernek & Jeffrey Co., LPA (RACJ) to begin foreclosure proceedings.
In a complicated twist indicative of the time, Chase did not own the mortgage in question. In fact, the bank had not even originated it. The loan was owned by Fannie Mae and Chase had been assigned as the servicer from the originator. When RACJ moved to foreclose, it represented as owner of the loan Chase.
Copy of the ruling below…
Glazer v. Chase Home Finance