The Fair Debt Collection Practices Act (“FDCPA”) provides that a mortgage loan servicer is not governed by the FDCPA–because the servicer is not a “debt collector.” However, federal appellate courts and trial courts have held/ruled that a mortgage loan servicer who is assigned a mortgage loan debt while it is in default is a “debt collector,” and is thus governed by the FDCPA.

The reason behind this distinction is as follows: Debt collection laws were meant to protect consumers from debt collectors because these entities do not have a reason to maintain a good relationship with consumers. Thus, debt collectors may employ extraordinary means of collecting a debt. But, the need to protect consumers from the original loan servicer is not as great because, in theory, the loan servicer will want to maintain a good public image and gain your repeat business. A loan servicer that has been assigned a debt that is in default, is more akin to a debt collector because it chose to be in the business of default loan servicing.

This means that if you are behind on payments and you receive a letter from a loan servicer notifying you that your loan servicer has changed, your loan servicer is governed by the FDCPA. Likewise, if you were behind on your payments and filed a Chapter 13 bankruptcy, and you server changes in the middle of your bankruptcy, your servicer is likely governed by the FDCPA–depending on your specific Chapter 13 plan.

If you find yourself in either of these scenarios, the FDCPA prohibits your loan servicer from
•Contacting you directly when you are represented by an attorney,
•Contacting you at an usual time or place, or at work when your work prohibits such communications,
•Misrepresenting the character, amount, or legal status of the debt,
•Contacting repeatedly,
•Misrepresenting the character, amount, or legal status of the debt,
•Threatening to communicate false, disparaging credit information,
•Repeatedly calling third parties for location information •And many more things.

The Florida Legislature decided to provide extra protections to consumers, beyond the protections of the FDCPA. The Florida Consumer Collection Practices Act (“FCCPA”) applies to “any person,” not just “debt collectors.” This means that your mortgage loans servicer is regulated by the FCCPA even if you have never defaulted. Also, the FCCPA prohibits much of the same conduct as the FDCPA. Most common violations that Parker & DuFresne sees are entities attempting to collect a debt that is owned by another entity, entities attempting to collect improper fees and charges that resulted from the entities improper loan servicing, and contacting clients that are represented by an attorney.

This blog is providing very basic information. The bottom line is that if someone is attempting to collect money from you in a way that does not seem right, it probably is not right. Parker & DuFresne represents consumers in matters such as these all the time. Our FDCPA and FCCPA clients do not pay costs or fees. Contact us for a free consultation.