Vincent Howard and our Moreno Valley foreclosure defense lawyers were interested to see a foreclosure-related lawsuit that alleged debt-collection violations rather than predatory lending. In Glover v. FDIC et al., Mary Glover sued multiple defendants, including a debt collection law firm, for failure to cancel the foreclosure case against her until three and a half years had gone by, nearly two years after she and her lender came to a loan modification agreement. She sued multiple defendants including the debt collection law firm, the Udren Law Office, alleging violations of the Fair Debt Collection Practices Act and the similar Pennsylvania statute. Ultimately, the Third U.S. Circuit Court of Appeals affirmed the dismissal of the claims against Udren as untimely.
Glover fell behind on her mortgage after sustaining serious injuries in a car accident. Her first attempt at a loan modification was not accepted, and the lender then hit her with the suspended payments and fees, followed in two months by a foreclosure case in Pennsylvania state court. Glover eventually was able to work out a loan modification agreement with the assignee of the original lender, and the opinion does not indicate that she has had further trouble making payments. However, she sued the lenders, the Udren law firm and the FDIC as receiver for Washington Mutual, alleging violations of the FDCPA and the Pennsylvania statute, the Fair Credit Extension Uniformity Act. After a second amended complaint, the trial court granted Udren's motion to dismiss the FDCPA and FCEUA claims, finding the FDCPA claims were past their deadline, and Udren was not a debt collector within the meaning of the FCEUA.
The Third Circuit first tackled the FDCPA claims. The law has a one-year statute of limitations, and the district court treated the claims as if they started accruing the day Glover got a loan modification. Thus, it said, even accounting for the time it took for the case to be considered by a FDIC review, the claims at issue (filed in a second amended complaint) were not filed until after the deadline. Glover argued that her claims related back to her first complaint, which did meet the deadline, but the Third Circuit disagreed. Relation back requires that the defendant have fair notice of the eventual claims from the original complaint, but Glover didn't allege the same substantial facts in both complaints. The appeals court also rejected Glover's argument that her claim should have accrued the day Udren learned of the loan modification, saying the FDCPA is a strict liability statute that does not take notice of the violator's knowledge. Finally, it upheld the dismissal of the FCEUA claims, saying law firms suing for a judgment are expressly exempted from the law's definition of "debt collector."
Vincent Howard and our Chino foreclosure defense attorneys are interested to see a case making foreclosure into a fair debt collection issue. The FDCPA is a powerful tool for protecting consumers' rights, but is almost always used by victims of aggressive debt collectors who have purchased debt from the original creditor. A foreclosure is absolutely an attempt to collect a debt and is covered by the FDCPA (though apparently not the Pennsylvania FCEUA). Someone like Glover, whose foreclosure was pending for far longer than it should have been, would likely have had her credit harmed by the incorrect debt collection. This can lead to problems with some of the basic purchases necessary for daily life, such as buying a car or opening a new cell phone account. At Howard Law, P.C., we represent victims of unfair debt collection suing under the FDCPA or the California equivalent, the Rosenthal FDCPA, and our Orange County foreclosure defense lawyers are happy to talk to clients about how they might apply in a foreclosure case.
Led by partner Vincent Howard, Howard Law represents Californians of all backgrounds and incomes who are fighting to hold on to their homes. If you're behind on your mortgage and you're getting nothing but excuses and delays from your lender, don't wait to contact us to discuss how we can help. You can send us a message through our website or call 1-800-872-5925.