Violation of the Fair Debt Collection Practices Act (“the FDCPA”)

From Sal Danna: When Countrywide took over the servicing from Greenpoint, the loan was already in default which automatically makes Countrywide a debt collector. If it was not in default, then a loan servicer is not considered a debt collector.  When I received the first letter from Countrywide, it contained the standard “This is an attempt to collect a debt” etc, but since it was also the first communication, it also contained the 30 day validation language if the debtor disputes the debt.

Well, I disputed the debt and requested validation as well as the name of the original creditor since the one listed was Capital One Mortgage and I have never done business with Capital One Mortgage.  When 30 days had passed with no validation from Countrywide, I sent another request which was also ignored by Countrywide.  The FDCPA states that all collection activity is to cease until validation is provided to the debtor.  The debt in question was the mortgage loan that they never stopped trying to collect because they actually foreclosed on the debt while I was and am still waiting for Countrywide to provide me with a validation of that debt.
XVI.  Violation of the Fair Debt Collection Practices Act  (“the FDCPA” or “the Act”), 15 U.S.C. § 1692 et seq
105.  For purposes of applying the Fair Debt Collection Practices Act (Act) to a particular debt,the categories of debt collectors and creditors are mutually exclusive. However, for debts that do not originate with the one attempting collection, but are acquired from another, the collection activity related to that debt could logically fall into either category. If the one who acquired the debt continues to service it, it is acting much like the original creditor that created the debt. On the other hand, if it simply acquires the debt for collection, it is acting more like a debt collector.  To distinguish between these two possibilities, the Act uses the status of the debt at the time of the assignment: the term “debt collector” means any person who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. The term does not include any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity concerns a debt which was not in default a the time it was obtained by such person. 15 U.S.C.S. § 1692a. In other words, the Act treats assignees as debt collectors if the debt sought to be collected was in default when acquired by
the assignee, and as creditors if it was not.
106. Countrywide violated 15 U.S.C. § 1692g(b) when they failed to cease collection of the debt after receiving Plaintiff’s written notification, within the thirty-day debt validation period, that Plaintiff was disputing the debt. 15 U.S.C. § 1692g(b) reads:
If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, 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, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.
15 U.S.C. § 1692g(b) (emphasis added). On December 19, 2008, fifteen days after the date of Countrywide’s debt collection letter, Plaintiff sent Countrywide a Certified Letter with return receipt declaring that Plaintiff disputes your debt collection-related allegations, denies the same,and demands strict proof and verification thereof.  “I have never had a mortgage debt with Capital One and they were not and have not ever Serviced any alleged loan mentioned in your
Correspondence.”  As such, Countrywide should have ceased all debt collection efforts immediately upon receiving that letter on December 29, 2008.  The Certified letter with proof of delivery is attached hereto and made a part hereof as Exhibit “L”.
107.  On January 29, 2009, 30 days after the date of Plaintiff’s request for Validation letter, Plaintiff sent Countrywide a Certified Letter with return receipt declaring that Plaintiff has not received any verification of the debt and again disputes the debt collection-related allegations, denies the same, and demands strict proof and verification thereof.  Countrywide received and signed for this 2nd verification and validation request letter on February 2, 2009.  A few days
later, on February 6, 2009, Countrywide proceeded to allow a Notice of Sale to be Recorded and thus, violated 15 U.S.C. § 1692g(b).  The second validation request letter sent by certified mail and proof of delivery of said letter is attached hereto and made a part hereof as Exhibit “M”.
108.  After debtor properly disputes his debt, he is entitled to grace period provided by 15 USCS  § 1692g(a). McDaniel v South & Assocs., P.C. (2004, DC Kan) 325 F Supp 2d 1210.  The Law firm in that case violated 15 USCS § 1692g(b), part of Fair Debt Collection Practices Act, 15 USCS §§ 1692 et seq., by filing foreclosure actions against debtors before expiration of 30-day grace period provided by 15 USCS § 1692g(a) and by continuing with foreclosure actions after debtors requested verification of debt. McDaniel v South & Assocs., P.C. (2004, DC Kan) 325 F Supp 2d 1210.
109.  Countrywide never sent Plaintiff the verification of the debt at any time or in any manner.  Rather, Countrywide allowed the foreclosure sale to take place on February 25, 2009 in violation of the Act.  Countrywide cannot claim that the debt in question was a separate debt from the debt in the foreclosure.  The fact that Plaintiff was offered $5,000 by Countrywide in exchange for the keys to his home is proof positive that they intentionally violated the Act by foreclosing on Plaintiff’s property before providing the debt validation to Plaintiff.

5 Responses

  1. Question on Notice of Default

    Hi folks, I have a question

    Notice of default arrived, with some certain summarized number/claim in it.

    I requested Beneficiary Statement, received it, there is an itemization, several lines (payments, insurance, taxes, late fees, service fees, etc)

    I understand, our Deed Of Trust and/or Note have some provisions for Beneficiary to call it “default” when other, not-mortgage payments are missing,

    BUT

    Question is – how legal it is? I can’t locate any reference in law for this – I searched a lot with no success to prove Or disapprove the statement, hope someone can point me to (and I did read 2924 though)

    Anyone who can elaborate on this subject, please do.

    I have an analogy – in San Francisco, when tenant is late on rent, landlord gives him a pay-or-quit 3-day notice, where landlord can NOT demand late fees or even mention them, so I wonder, is there any similar rule(s) for the demands on payments when debtor is missing on some strange fee of any sort?

    I also see on this site and others, reference to class-action suit vs MERS and 9 underlying member-banks filed in Delaware, but it’s allegations are a bit different – there, they say bank charges borrowers certain amount which is higher than what lawyers charge the bank.
    In my question, I am interested in legality of including different fees into the the total, eligible for being quoted in NOD, or be a basis for total sum in default

    In my understanding, banks would say that I have agreed to this in Deed or Note, but is there any statutory rule or rules, which would be overruling for deed’s/note’s provisions?

    Your feedback is much appreciated and I hope will be useful for this entire forum at least for CA

    Thanks !

  2. Thank you Sal Danna.

    SHORT VERSION:
    Can Violation of FDCPA be used to stop UnLawful Detainer actons? Is the UD part of a collection procedure?

    I’ve sent 2 letters and faxes disputing WAMU/Chase Debt Validation Notice and they have not responded. Office of the Comptroller told them to respond on March 13, 2009.. and still they guys are not performing. Any ideas?

    LONG VERSION:

    This is exactly my issue with a twist. Chase aquired my loan from WAMU on 09-25-2008 . On October 30th I contacted HOPE and HOPE contacted Chase (old WAMU number) and after interview on phone was told I qualify for consideration of loan. Verified my home was not up for sale and kept checking. HOPE agent send me email confirmaiton and plan to followup on progress. After 18 days, WAMu produces
    Financial Statement and sends it via FedEx on Nov. 20th. FedEx records indicate the package arrive on Nov 21, 2008 in the afternoon. I get the docs send over 80 pieces of documentation… I’m happy on the way to modification — so I think. On December 7th I get a note on the door my home had been sold. I call the WAMU I pay my money to he says the loan is with him the mail and posting is a bunch of scammers trying to take advantage of me throw them I way… I ask him are you sure he says yes. I still am not comfortable and he says check with our attorney. He means the banks trustee. I call Quality Loan Service, and find out that my house was sold on November 21st in the morning.

    I call and file complaints with 2 congress members (Waters and Lofgren) Office of the Comptroller, Santa Clara County District Attorney, Office of Corporations, Office of Thrift Supervison, WAMU and Chase Executive Branches and their respective Loan Mitigation Response teams.

    After 2 monts of dealing with the EXECUTIVE Modificaiton Department — I finally get someting of an apology. “I feel really bad about the way your house was taken, let me see what I can do for you.” Calls me back and says I can have my house back for $42,100. Not a modificaiton but at this point I think I better go for it. I call back and ask for the offer in writing because I know I will have to show I’m getting the asset back (my home) to get this personal loan. WAMU EXECUTIVE Team member said “We can’t give you anything in writing because this is a special deal.” I can hear her typing. She then states she is IMing her boss and he has taken the deal off the table and that there is no chance of getting my home back now.

    On January 7, 2009, I get a “Debt Validation Notice” from WAMU/Chase that is attached to a letter that states “We may be able to help you bring your loan current and avoid foreclosure even if you can’t pay your outstanding balance in fudll now… call this number.” Well this was exactly we I was on October 30th. I call the WAMU lady back and tell her “I got great news from you guys.”! And, that I do want to work with them. How can she help me. She states that part does now apply to me and that it is a form letter. But other than that, the letter was correct.

    On February 2, 2009, I fax and send certified mail a written dispute of their Debt Validaiton Letter and demanded a full accounting of all dept they claim I owen Wmmsc C/o B of A As Ttee (as they indicate in my letter. I also alsk for a direct contact information to that entity and to provide me witha clear chronological history of all entities that have owned my loan since its inception. They did not respond. I sent this to WAMU and the Office of the Comptroller.

    On March 5, 2009, I faxed and sent certified mail to the Quality Loan Srvice Corp and WAMU,Chase (2 letter to 2 different locations) and the attorney doing an Unlawful Detainer Case Against me. I also send it to the Office of the Comptroller… and REPEAT MY DEMAND of February 2, 2009 and ask for them to produce the Promissory Note. No one has responded.

    04-03-2009 — UD hearing is tomorrow. If violation of FDCPA is grounds to stop further collection of a debt, could it be applied in a UD?

    becamse my servicer on September 25th. One October 30th I was dealing with Chase (though the I was working with

  3. Anyone,

    Is anyone aware of any potential post-30 violations of FDCPA? My case is well into default, some 6 months. So, the 30 day window is closed. Just curious if FDCPA still provides some opportunities for me to shaw violation by the alleged owner of my note.

    Andre

  4. Sal:

    Do you now of one case anywhere in the country where a judge overturned a foreclosure because the debt collector did not verify the debt?

    I read the FDCA to mean that if the debt collector does not verify the debt and still collects on the debt then the debt collector is subject to a statutory penalty, thats it. So most debt collectors carry on knowing the most they can loose is $1,000.

    If I am wrong please point to controlling case law. I have scoured lexis and cannot find one single case in the history of U.S. law.

  5. CAN MERS BE A NOTE HOLDER?

    FORECLOSURE ATTORNEYS FINDING IT HARD TO GET THE ORIGINAL NOTES AND WHO THE REAL OWNER OF THE RIGHTS TO THE NOTE ARE USING MERS AS A NOTE HOLDER, HAVING AN ALLEGED MERS VICEPRESIDENT TO SIGN THE SUBSTITUTION OF TRUSTEE AS IF THEY WERE THE NOTE HOLDER OR HOLDER IN DUE COURSE.

    IF THEY ARE NOT IN THE BUSINESS OF HOLDING NOTES, WHAT SHOULD WE REQUEST OF THEM AS PROOF, THEY ARE TRYING TO FORECLOSE IN VIRGINIA A NON-JUDICIAL STATE.

    I BELIEVE THEY ARE TRYING TO USE MERS AS A COVER AND MERS ALLOWS ITSELF TO BE PLACED IN THE LINE OF FIRE WHEN THEY ALLOW FORECLOSURE ATTORNEYS FUDGE THE LAW AND COMMIT FRAUD ON THE COURT AND ON THE BORROWERS FOR A NICKEL

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