Federal Judge Slams Wells Fargo for Violation of Debt Collector’s Act in Florida

Posted on December 25, 2013 by Neil Garfield

 

EDITOR’S NOTE: this is why I am encouraging attorneys to take cases involving foreclosure, even if the foreclosure itself is problematic. The FDCPA federal counterpart essentially states the same rules. These cases allow for damages and recovery of attorney fees that might aid in the cost of protracted litigation by a pretender lender. Most of my clients are receiving these contacts even after they have expressly told the caller that they are represented by counsel and even that there is a lawsuit pending. I would add that there is clearly a question as to whether the offer of modification is an admission against interest that the loan is in default and that therefore the current “default” is waived.

Danielle Kelley of our firm Garfield, Kelley and White has been writing about this for some time. She firmly believes, and I agree with her, that the time has come to file these actions. I would suggest that a debt validation letter be sent under the FDCPA and that the “borrower” obtain a title and securitization report as well, in order to shore up the potential setoffs and counterclaims against the pretender lender. But the good part of this law is that even if the caller is in fact the true lender or creditor, they must follow the rules — or pay the penalty.

2013 U.S. Dist. LEXIS 172716, *


ANDREW CONKLIN, Plaintiff, v. WELLS FARGO BANK, N.A., Defendant.

Case No. 6:13-cv-1246-Orl-37KRS

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA, ORLANDO DIVISION

2013 U.S. Dist. LEXIS 172716

December 8, 2013, Decided
December 9, 2013, Filed 

CORE TERMS: collection, mortgage, debt-collection, phone, cell, collect a debt, telephone, solicitations, exemption, consumer, foreclosure, landline, factual allegations, security interest, express consent, prerecorded, foreclose, servicer, exempt, foreclosure action, emergency calls, business relationship, cellular phones, telephone-solicitation, categorically, communicate, pre-suit, exempted, notice

COUNSEL:  [*1] For Andrew Conklin, Plaintiff: Richard S. Shuster, LEAD ATTORNEY, Shuster & Saben, LLC, Satellite Beach, FL.

For Wells Fargo Bank, N.A., a foreign corporation, Defendant: Aaron S. Weiss, LEAD ATTORNEY, Carlton Fields, PA, Miami, FL; April Y. Walker, LEAD ATTORNEY, Carlton Fields, PA, Orlando, FL; Michael Keith Winston, LEAD ATTORNEY, Carlton Fields, PA – West Palm Beach, West Palm Beach, FL.

JUDGES: ROY B. DALTON, JR., United States District Judge.

OPINION BY: ROY B. DALTON, JR.

OPINION

ORDER

This cause is before the Court on the following:

1. Plaintiff’s Complaint (Doc. 2), filed August 15, 2013;

2. Defendant Wells Fargo’s  Click for Enhanced Coverage Linking SearchesMotion to Dismiss Plaintiff Andrew Conklin’s Complaint and Supporting Legal Memorandum (Doc. 12), filed August 28, 2013; and

3. Plaintiff Andrew Conklin’s Response to Motion to Dismiss (Doc. 18), filed September 23, 2013.

Upon consideration, the Court finds that Defendant’s motion is due to be denied.

BACKGROUND

Defendant is the loan servicer on Plaintiff’s mortgage. (Doc. 2, ¶ 4.) In 2010, Defendant sued Plaintiff to foreclose on his house. (Doc. 18, p. 1.) Defendant allegedly continued to communicate about the foreclosure directly to Plaintiff after he was represented by counsel; this led Plaintiff  [*2] to file a previous Florida Consumer Collection Practices Act (“FCCPA”) claim against Defendant. (Id. at 1-2.) That case later settled. (Id. at 2.)

Then, earlier this year, Defendant allegedly resumed calling Plaintiff’s cell phone. (Doc. 2, ¶¶ 16-18.) After one of the calls, Defendant left a voicemail stating: “This is . . . your mortgage servicer, calling in regards to your mortgage. . . . This is an attempt to collect a debt . . . .” (Id. ¶ 16.) Plaintiff accordingly filed this suit in state court, alleging that Defendant has violated the FCCPA and the Telephone Consumer Protection Act (“TCPA”). (Id. ¶¶ 10-26.) Defendant removed the case to this Court on the basis of federal-question jurisdiction. (Doc. 1.)

Defendant now moves to dismiss the Complaint, arguing that it fails to state either an FCCPA or a TCPA claim. 1 (Doc. 12.) Plaintiff opposes. (Doc. 18.) This matter is ripe for the Court’s adjudication.

FOOTNOTES

1 Defendant also argues that Plaintiff failed to give pre-suit notice, which was allegedly required by Plaintiff’s mortgage. (Doc. 12, pp. 2-4.) First, this suit is about the calls, not the mortgage; thus, the mortgage is not “central” to the Complaint, and the Court declines to consider  [*3] it at the motion-to-dismiss stage. See Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005). Second, the Court is skeptical that a contractual requirement of pre-suit notice to allow the other party an opportunity to cure a breach is applicable to this action, which is not on the contract itself. Nevertheless, because the Court declines to consider this argument now, it will not preclude Defendant from raising it at a later point.

STANDARDS

A plaintiff must plead “a short and plain statement of the claim.” Fed. R. Civ. P. 8(a)(2). On a motion to dismiss, the Court limits its consideration to “the well-pleaded factual allegations.” La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004). The factual allegations in the complaint must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). In making this plausibility determination, the Court must accept the factual allegations as true; however, this “tenet . . . is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009). A pleading that offers mere “labels and conclusions” is therefore insufficient. Twombly, 550 U.S. at 555.

DISCUSSION

I. FCCPA

The  [*4] FCCPA provides that “[i]n collecting consumer debts, no person shall . . . [c]ommunicate with a debtor if the person knows that the debtor is represented by an attorney with respect to such debt . . . .” Fla. Stat. § 559.72(18). Defendant argues that Plaintiff has failed to state an FCCPA claim because: (1) enforcing a security instrument does not amount to debt collection within the meaning of the FCCPA; (2) Plaintiff has not alleged that Defendant was attempting to collect a debt; and (3) Plaintiff has not alleged that Defendant “communicated” with him within the meaning of the FCCPA. (Doc. 12, pp. 4-6.) The Court disagrees.

It is true that “a mortgage foreclosure action itself” does not qualify as debt collection under the FCCPA. Trent v. Mortg. Elec. Registration Sys., Inc., 618 F. Supp. 2d 1356, 1360-61 (M.D. Fla. 2007) (Corrigan, J.) (noting that Fair Debt Collection Practices Act (“FDCPA”) case law applies to FCCPA cases); see also Warren v. Countrywide Home Loans, Inc., 342 F. App’x 458, 460 (11th Cir. 2009) (“[F]oreclosing on a security interest is not debt collection activity [for the purposes of § 1692g of the FDCPA].”). However, the action at issue here is not the invocation  [*5] of “legal process to foreclose,” see Trent, 618 F. Supp. 2d at 1361, but rather debt collection calls made outside that judicial process. It is not as if these calls were made to notify Plaintiff of the foreclosure action or to attempt to comply with the statute. Cf. Diaz v. Fla. Default Law Grp., P.L., No. 3:09-cv-524-J-32MCR, 2011 U.S. Dist. LEXIS 68541, 2011 WL 2456049, at *4 (M.D. Fla. Jan. 3, 2011) (Corrigan, J.) (“The timing of the filing of the foreclosure complaints [just weeks before the communications] confirms that defendant was not using the [alleged debt collection] letters in an attempt to collect the debt outside the foreclosure process.”). Rather, the calls were made years into the underlying foreclosure action, and after Plaintiff previously filed an FCCPA claim for this very same behavior, in an explicit attempt to collect a debt. (Doc. 2, ¶ 16 (“This is . . . your mortgage servicer, calling in regards to your mortgage. . . . This is an attempt to collect a debt . . . .”).) To try to claim now that these calls were made in an attempt to foreclose the security interest rather than to collect a debt is simply disingenuous. See Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1217 (11th Cir. 2012)  [*6] (holding that a letter explicitly stating that the defendant was attempting to collect a debt plainly constituted debt-collection activity, and noting that “[t]he fact that the letter and documents relate to the enforcement of a security interest does not prevent them from also relating to the collection of a debt”). To give credence to that argument would be to give carte blanche to any holder of secured debts to harass consumers in the process of foreclosure, and as the U.S. Court of Appeals for the Eleventh Circuit aptly noted, “That can’t be right. It isn’t.” Id. at 1218.

Plaintiff has alleged that Defendant bypassed his lawyer and called him directly to discuss payment on his mortgage and to attempt to collect a debt. (Doc. 2, ¶¶ 16-18.) This is precisely the kind of behavior that the FCCPA was designed to prevent. The Court therefore finds that Plaintiff has sufficiently stated an FCCPA claim, and Defendant’s motion is due to be denied on that ground.

II. TCPA

The TCPA prohibits making any call using an autodialer to any cell phone, except for emergency calls or calls where the called party has given prior consent. 47 U.S.C. § 227(b)(1)(A)(iii). Defendant argues that all debt-collection  [*7] calls, including those made to cell phones, are categorically exempt from the TCPA. (Doc. 12, p. 7.) However, the case on which Defendant relies for that proposition, Meadows v. Franklin Collection Serv., Inc., 414 F. App’x 230 (11th Cir. 2011), is distinguishable from the one at bar.

In Meadows, the plaintiff was suing under two provisions of the TCPA which are inapplicable here: § 227(b)(1)(B), regarding landlines, 2 and § 227(c)(5), regarding telephone solicitations. 3 Id. at 235-36. Neither of those provisions apply in this case, as Plaintiff is suing under § 227(b)(1)(A)(iii), regarding cell phones. (See Doc. 2, ¶ 21.) Though Meadows does broadly state that “the FCC has determined that all debt-collection circumstances are excluded from the TCPA’s coverage,” that statement is dicta and is also qualified by the narrow holding of the case, which was specifically based on the landline and telephone-solicitation provisions. 414 F. App’x at 235.

FOOTNOTES

2 The court held that the defendant did not violate the landline provision because it had an existing business relationship with the intended recipient of the call and the call was made for a commercial, non-solicitation purpose—both explicit  [*8] exemptions from that provision of the TCPA. Meadows, 414 F. App’x at 235 (citing In re Rules & Regulations Implementing Tel. Consumer Prot. Act of 1991, 7 FCC Rcd. 8752, 8773 (Oct. 16, 1992) (“[P]rerecorded debt collection calls would be exempt from the prohibitions on such calls to residences as: (1) calls from a party with whom the consumer has an established business relationship, and (2) commercial calls which do not adversely affect privacy rights and which do not transmit an unsolicited advertisement.” (emphasis added)).

3 The court held that the defendant did not violate the telephone-solicitation provision because the calls made were debt collections, not telephone solicitations. Meadows, 414 F. App’x at 236. The court rightly noted that the FCC has determined that debt-collection calls are “not subject to the TCPA’s separate restrictions on telephone solicitations.” Id. (citation and internal quotation marks omitted) (emphasis added).

Further, this Court must read that statement in Meadows in conjunction with the FCC ruling on which it relies, which provides that “prior express consent [in debt-collection calls made to cell phones] is deemed to be granted only if the wireless  [*9] number was provided by the consumer to the creditor, and that such number was provided during the transaction that resulted in the debt owed.” In re Rules & Regulations Implementing Tel. Consumer Prot. Act of 1991, Request of ACA Int’l for Clarification & Declaratory Ruling, 23 FCC Rcd. 559, 564-65 (Dec. 28, 2007) (FCC Ruling). This ruling clarifies that not all debt-collection calls to cell phones are categorically exempted from the TCPA—unlike the broad exemptions for landline debt-collection calls and telephone solicitations, which are based on the content of the call itself. See id. at 561-62 (“[P]rerecorded debt collection calls are exempted from Section 227(b)(1)(B) of the TCPA which prohibits prerecorded or artificial voice messages to residences.”), 565 (“[C]alls solely for the purpose of debt collection are not telephone solicitations . . . . Therefore, calls regarding debt collection . . . are not subject to the TCPA’s separate restrictions on ‘telephone solicitations.'”). Rather, with regard to cell phones, a debt collector must show that the debtor provided the number during the debt transaction; only then will a debt-collection call fall under the consent exception in  [*10] the cell-phone provision. See Gager v. Dell Fin. Servs., LLC, 727 F.3d 265, 273 (3d Cir. 2013) (“The only exemptions in the TCPA that apply to cellular phones are for emergency calls and calls made with prior express consent. Unlike the exemptions that apply exclusively to residential lines, there is no . . . debt collection exemption that applies to autodialed calls made to cellular phones. Thus, the content-based exemptions invoked by [the defendant] are inapposite.”).

In sum, debt-collection calls to cell phones are only exempt from the TCPA if the debtor had prior express consent, in the form of a number provided by the debtor during the transaction giving rise to that debt. See FCC Ruling, 23 FCC Rcd. at 564-65. As Plaintiff has pled that he did not give consent or alternatively revoked consent (Doc. 2, ¶¶ 22-23), he has adequately stated a TCPA claim, and Defendant’s motion is due to be denied on that ground. It will be Defendant’s task to prove consent at the summary-judgment stage. See FCC Ruling, 23 FCC Rcd. at 565 (putting the burden on the caller to show consent); see, e.g., Osorio v. State Farm Bank, F.S.B., 859 F. Supp. 2d 1326, 1330-31 (S.D. Fla. 2012) (reviewing the issue  [*11] of consent and revocation on summary judgment).

CONCLUSION

Accordingly, it is hereby ORDERED AND ADJUDGED that Defendant Wells Fargo’s  Click for Enhanced Coverage Linking SearchesMotion to Dismiss Plaintiff Andrew Conklin’s Complaint and Supporting Legal Memorandum (Doc. 12) is DENIED.

DONE AND ORDERED in Chambers in Orlando, Florida, on December 8, 2013.

/s/ Roy B. Dalton Jr.

ROY B. DALTON JR.

United States District Judge

 

Filed under: CASES, CORRUPTION, foreclosure, GARFIELD KELLEY AND WHITE, investment banking, Investor, Mortgage, Motions, Pleading, Servicer, TRUST BENEFICIARIES, trustee | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 6 Comments »

What Do Those Losses at Fannie and Freddie Mean?

Posted on May 13, 2010 by Neil Garfield

Editor’s Note: While the courts hear arguments and decide this way and that about standing and real party in interest, the elephant in the living room is that we have highly publicized reports of LOSSES associated with more than $5 trillion in loans bought or guaranteed by Fannie and Freddie. That amounts to around 25 million loans more or less. So I ask myself, “Self, if those loans were bought or guaranteed by Freddie or Fannie, what’s left?”

If they were bought, did they keep them or sell them into the secondary market for securitization?

If they own them, why are they not at least nominal plaintiffs or beneficiaries in foreclosure sales?

If they guaranteed them, and they show a loss, doesn’t that mean they paid?

If they paid, it was presumably the loss or full balance of the loan, so which is it?

If they paid, what did they get in return?

If they paid, who owns the loan now?

If they report an “inventory” of foreclosed property, who actually is named as the owner and who gets the proceeds of sale?

If property is “inventory” were Freddie and Fannie involved on any level of the foreclosure or sale?

Did Freddie or Fannie get the benefit of any credit enhancements, insurance, credit default swaps etc.?

Who makes modification decisions for Fannie and Freddie?

Do some or all of these loans fall under the category of unsecured debt, the enforcement of which is subject to pennies on the dollar debt collection?

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May 10, 2010, 4:46 am

<!– — Updated: 11:47 am –>

Ignoring the Elephant in the Bailout

From Gretchen Morgenson’s latest Fair Game column:

If you blinked, you might have missed the ugly first-quarter report last week from Freddie Mac, the mortgage finance giant that, along with its sister Fannie Mae, soldiers on as one of the financial world’s biggest wards of the state.

Freddie — already propped up with $52 billion in taxpayer funds used to rescue the company from its own mistakes — recorded a loss of $6.7 billion and said it would require an additional $10.6 billion from taxpayers to shore up its financial position.

The news caused nary a ripple in the placid Washington scene. Perhaps that’s because many lawmakers, especially those who once assured us that Fannie and Freddie would never cost taxpayers a dime, hope that their constituents don’t notice the burgeoning money pit these mortgage monsters represent. Some $130 billion in federal money had already been larded on both companies before Freddie’s latest request.

But taxpayers should examine Freddie’s first-quarter numbers not only because the losses are our responsibility. Since they also include details on Freddie’s delinquent mortgages, the company’s sales of foreclosed properties and losses on those sales, the results provide a telling snapshot of the current state of the housing market.

That picture isn’t pretty. Serious delinquencies in Freddie’s single-family conventional loan portfolio — those more than 90 days late — came in at 4.13 percent, up from 2.41 percent for the period a year earlier. Delinquencies in the company’s Alt-A book, one step up from subprime loans, totaled 12.84 percent, while delinquencies on interest-only mortgages were 18.5 percent. Delinquencies on its small portfolio of option-adjustable rate loans totaled 19.8 percent.

The company’s inventory of foreclosed properties rose from 29,145 units at the end of March 2009 to almost 54,000 units this year. Perhaps most troubling, Freddie’s nonperforming assets almost doubled, rising to $115 billion from $62 billion.

When Freddie sells properties, either before or after foreclosure, it generates losses of 39 percent, on average.

There is a bright spot: new delinquencies were fewer in number than in the quarter ended Dec. 31.

Freddie Mac said the main reason for its disastrous quarter was an accounting change that required it to bring back onto its books $1.5 trillion in assets and liabilities that it had been keeping off of its balance sheet.

None of the grim numbers at Freddie are surprising, really, given that it and Fannie have pretty much been the only games in town of late for anyone interested in getting a mortgage. The problem for taxpayers, of course, is that the company’s future doesn’t look much different from its recent past.

Indeed, Freddie warned that its credit losses were likely to continue rising throughout 2010. Among the reasons for this dour outlook was the substantial number of borrowers in Freddie’s portfolio that currently owe more on their mortgages than their homes are worth.

Even as its business suffers through a sour real estate market, Freddie must pay hefty cash dividends on the preferred stock the government holds. After it receives the additional $10.6 billion it needs from taxpayers, dividends owed to Treasury will total $6.2 billion a year. This amount, the company said, “exceeds our annual historical earnings in most periods.”

In spite of these difficulties, Freddie and Fannie are nowhere to be seen in the various financial reform efforts under discussion on Capitol Hill. Timothy F. Geithner, the Treasury secretary, offered a vague comment to Congress last March, that after some unspecified reform effort someday in the future, the companies “will not exist in the same form as they did in the past.”

Fannie and Freddie, lest you’ve forgotten, have been longstanding kingpins in the housing market, buying mortgages from banks that issue them so the banks could turn around and lend even more. After both companies overindulged in the lucrative but riskier end of home loans, they nearly collapsed, prompting the federal rescue. Since then, the government has continued to use the firms as mortgage buyers of last resort, to help stabilize a housing market that is still deeply troubled.

To some, the current silence on what to do about Freddie and Fannie is deafening — as is the lack of chatter about Freddie’s disastrous report last week.

“I don’t understand why people are not talking about it,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington, referring to Freddie’s losses. “It seems to me the most fundamental question is, have they on an ongoing basis been paying too much for loans even since they went into conservatorship?”

Michael L. Cosgrove, a Freddie spokesman, declined to discuss what the company pays for the mortgages it buys. “We are supporting the market by providing liquidity,” he said. “And we have longstanding relationships with all the major mortgage lenders across the country. We’re in the business of buying loans, and we are one of the few sources of liquidity available.”

But Mr. Baker’s question gets to the heart of the conflicting roles that Freddie and Fannie are being asked to play today. On the one hand, the companies are charged with supporting the mortgage market by buying loans from banks and other lenders. At the same time, they must work to minimize credit losses to make sure the billions that taxpayers have poured into the firms don’t disappear.

Freddie acknowledged these dueling goals in its quarterly report. “Certain changes to our business objectives and strategies are designed to provide support for the mortgage market in a manner that serves our public mission and other nonfinancial objectives, but may not contribute to profitability,” it noted. Freddie said that its regulator, the Federal Housing Finance Agency, has advised it that “minimizing our credit losses is our central goal and that we will be limited to continuing our existing core business activities and taking actions necessary to advance the goals of the conservatorship.”

Mr. Baker’s concern that Freddie may be racking up losses by overpaying for mortgages derives from his suspicion that the government might be encouraging it to do so as a way to bolster the operations of mortgage lenders.

That would make Fannie’s and Freddie’s mortgage-buying yet another backdoor bailout of the nation’s banks, Mr. Baker said, and could explain the government’s reluctance to include them in the reform efforts now being so hotly debated in Washington.

“If they are deliberately paying too much for mortgages to support the banks,” Mr. Baker said, “the government wants them to be in a position to keep doing that, and that would mean not doing anything about their status until further down the road.”

It’s no surprise that the government doesn’t want to acknowledge the soaring taxpayer costs associated with these mortgage zombies. The truth about Fannie and Freddie has always been hard to come by in Washington, and huge piles of money seem to circulate silently around both firms.

Remember last Christmas Eve? That’s when the Treasury quietly decided to remove the $400 billion limit on federal borrowings available to Fannie and Freddie through 2012.

That stealth move didn’t engender much confidence in either the companies or their government guardian.

But because taxpayers own Freddie and Fannie, we should know more about their buying habits, as Mr. Baker points out. Unfortunately, if the government’s past actions are any indication of what we can expect, then don’t hold your breath waiting for the facts.

Go to Column from The New York Times »
Go to Freddie Mac Quarterly Report »

Filed under: bubble, CORRUPTION, Eviction, expert witness, Fannie MAe, foreclosure, foreclosure mill, GTC | Honor, HERS, investment banking, Investor, MODIFICATION, Mortgage, Motion Practice and Discovery, securities fraud, Servicer, STATUTES, trustee | Tagged: , , , , , , , , , | 25 Comments »

MERS ARTICLE REVEALS INHERENT FLAWS

Posted on March 15, 2010 by Neil Garfield

see FORECLOSURE_SUBPRIME_MORTGAGE_LENDING_AND_MERS1

Editor’s Note: This appears to be public domain. The article is excellent in its analysis of MERS. Here is the Table of Contents:

FORECLOSURE, SUBPRIME MORTGAGE LENDING, AND THE MORTGAGE ELECTRONIC REGISTRATION SYSTEM
Christopher L. Peterson*
TABLE OF CONTENTS
I.
THE AMERICAN REAL PROPERTY RECORDING SYSTEM
II.
THE ORIGIN AND OPERATION OF MERS
III.
THE QUESTIONABLE LEGAL FOUNDATION OF MERS
A.
MERS Does Not Own Legal Title to Mortgages Registered On Its Database
B.
MERS Lacks Standing to Bring Mortgage Foreclosures
C.
MERS’ Foreclosure Efforts Implicate the Federal Fair Debt Collection Practices Act
i.
MERS is a Third Party Debt Collector
ii.
Mortgage Servicers that Cloak Themselves in MERS’ Name Should be Construed as Debt Collectors
D.
Loans Recorded in MERS’ Name May Lack Priority Against Subsequent Purchasers for Value and Bankruptcy Trustees
IV.
ANALYZING MERS’ ROLE IN THE RESIDENTIAL MORTGAGE MARKET
A.
MERS and the Mortgage Foreclosure Crisis
B.
MERS and Atrophy of the Land Title Information Infrastructure
C.
Title Recording Law and Democratic Governance

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , | 1 Comment »

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

Posted on March 31, 2009 by Neil Garfield

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.

Filed under: Eviction, foreclosure, GTC | Honor, MODIFICATION, Mortgage, securities fraud | Tagged: , , , , , | 5 Comments »

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