I recently read about the Sixth Circuit Court of Appeals of the United States decision giving consumers a victory on January 14th, 2013 in Glazer v. Chase Home Finance LLC, No. 10-3416, 2013 WL 141699. The court ruled that the FDCPA (Fair Debt Collection Practices Act) applies to the activity of mortgage foreclosures. The Court further ruled that lawyers whose principal or regular business practices involves mortgage foreclosure activity are by definition “debt collectors” and therefore must follow the FDCPA.
The key to the Glazer decision is that the Court held the mortgage foreclosure itself is not merely an action to enforce a security interest, but also involves an action to collect the underlying debt. In other words, the filing of a foreclosure law suit is both an effort to collect on the security interest (the mortgage) and also a simultaneous attempt to collect on the debt (the note). Since a foreclosure law suit is also an attempt to collect money, is similar to collection efforts by a credit card company, and falls under what the FDCPA was intended to regulate.
Glazer will force mortgage servicers and law firms to reevaluate their collection procedures. As a homeowner who may be involved in a foreclosure, you should know your rights under the FDCPA. A knowledgeable attorney can assist you in knowing your rights are and how to enforce them.
Comments and conversation welcome.
Brian D. Flick, Esq with Godbey & Associates