Vincent Howard and our entire team of San Bernardino foreclosure defense lawyers handle foreclosure cases as well as some cases involving the Fair Debt Collection Practices Act. However, the FDCPA is not usually invoked in the context of foreclosure, which is why we were interested to see a case out of the Eleventh U.S. Circuit Court of Appeals where it was. In Bourff v. Rubin Lublin LLC, Michael Bourff of Georgia appealed from the dismissal of his FDCPA case against a law firm seeking to collect on a mortgage debt owed to BAC Home Loan Servicing. Rubin Lublin LLC contacted Bourff with a letter that identified BAC as the creditor, which Bourff contended was a false representation. His lawsuit was dismissed for failure to state a claim because BAC was a creditor according to the ordinary meaning of the term and any error was harmless, but the Eleventh Circuit reversed.
Bourff took out a loan of $195,000 from America's Wholesale Lender and secured it with the deed of property he then bought in Fulton County, Georgia. He defaulted on the loan in April of 2009, and AWL assigned the loan to BAC in June for the purpose of collecting. BAC hired Rubin Lublin to collect, and the law firm sent Bourff a letter notifying him it had been retained to collect the debt. The letter said, in pertinent part, that it was a notice pursuant to the FDCPA, an attempt to collect a debt, and that BAC was the creditor on the loan in question. Bourff responded by suing, arguing that BAC cannot be a creditor under the definition provided by the FDCPA. That would make the statement in the notice a false representation under the law, which would trigger the right to sue for damages. The district court disagreed, granting Rubin Lublin's motion to dismiss. It found BAC was a creditor within the ordinary meaning of the term and that even if not, the error was harmless. Bourff appealed.
The Eleventh Circuit reversed, finding Bourff's allegations were enough to survive a motion to dismiss. The FDCPA applies in this case because this was an attempt to collect a debt, the court said. An FDCPA notice like the one sent to Bourff must not contain any false, deceptive or misleading representations, and the courts have determined that a false representation is enough to violate the law, even when the plaintiff does not claim to have been misled or deceived. The false representation in this case was the representation of BAC as a creditor, the court said. This term is defined by the FDCPA as "any person... to whom a debt is owed," but not including someone assigned a debt "solely for the purpose of facilitating collection of such debt for another." Thus, Bourff argued, the assignment of his debt to AWL to BAC, after his default, makes it untrue that BAC was the creditor. The Eleventh agreed, construing the evidence in the light most favorable to Bourff. Thus, it vacated dismissal of his case and remanded it for more proceedings.
Vincent Howard and our Costa Mesa foreclosure defense attorneys are pleased to see the Eleventh enforcing the law as written, rather than accepting the district court's conclusion that BAC was a creditor within the ordinary meaning of the term. The FDCPA and other laws define their terms precisely to give guidance about what they do and do not regulate. Indeed, if "creditor" had not been defined by the law, there would undoubtedly be a patchy and inconsistent history of caselaw attempting to read the Congressional tea leaves in order to come up with a fair definition. As this court notes, the FDCPA is strict about false representations, which makes it a powerful consumer protection law; Vincent Howard and our Los Angeles County foreclosure defense lawyers invoke it when we feel our clients have been misled or taken advantage of by a debt collector.
If you're facing default or foreclosure, or know you will be soon, you don't have to suffer through endless unproductive negotiations with your loan servicer. Howard Law, P.C., represents clients across California who are seeking a loan modification, bankruptcy or another legal avenue against foreclosure. For an evaluation of your case, send us an email or call 1-800-872-5925 today.