A monumental decision was recently passed down in the United States Court of Appeals for the 6th Circuit (Ohio) that found foreclosures are indeed a type of debt collection and therefore are protected under the Fair Debt Collection Practices Act (FDCPA). This decision, Glazer v. Chase Home Finance, LLC et al., will impact homeowners across the country who are at risk of losing their home to foreclosure because mortgage holders and their legal representatives will now be held to a set standard of how they may collect a debt and what practices and tactics are and are not allowed.
Determining Foreclosures Are Debt Collections
The court reasoned that: the mortgage holder places a home in foreclosure as an attempt to collect on the unpaid mortgage, according to the Daily Record. The home will be seized and sold in order to settle this owed amount, which the court ruled, is a clear example of debt collection. Even if the mortgage holder has attorneys representing them to process and execute the foreclosure, these attorneys are then considered the debt collectors according to the court documents.
When the court ruled that, in this case, the consumer, Glazer, could go after the law firm representing his mortgage company for violating the FDCPA (in contrary to the lower court’s decision), they sealed the fate for those processing foreclosures across the country. While there has been no definitive determination as to whether or not Glazer’s FDCPA rights were violated, these claims will be presented at a future hearing, consumers now have the right to file based on these kinds of violations.
What This Means for Consumers
This decision has the ability to afford further rights to consumers whose homes are in foreclosure, as they will now be afforded all of the protections under the Act. The FDCPA will protect these homeowners from harassment by the bank attempting to foreclose or their legal representatives, define strict, allowable methods of communication and attempts to collect, and will protect consumers from being mislead by the collector in question.
The Federal Trade Commission explains that under the Fair Debt Collection Practices Act, consumers have the right to:
- Specify what times and places are convenient for the collector to contact them regarding the debt.
- Can, in writing, state intent not to pay the debt and thus cease communication with the collector.
- Specify who, other than yourself and legal representative, the collector may speak with regarding your debt.
- Refer all communication to your legal representative.
- Not be abused via profane or threatening language, constant calls aimed at intimidating you into payment, or threat of damaging your reputation or harming your property or you physically.
It is important that all consumers, including those facing foreclosure, are aware of their rights under the Act.
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