(BREAKING NEWS) —
Here’s a rare treat … oral transcripts from Dennis Obduskey v. McCarthy & Holthus, LLP:
We’ve been waiting on the arguments here, because how the FDCPA is interpreted when it comes to foreclosures in non-judicial (Deed of Trust) states is at issue and has been in conflict among the federal circuits as to whether the enforcement of a security instrument (the actual deed of trust) constitutes the “collection of a debt”. The 10th U.S. Circuit Court of Appeals (where the case originated) says enforcement of a security instrument is not a violation of the Fair Debt Collection Practices Act because it does not constitute debt collection.
Part of the problem here, is that it is and it isn’t (enforcement of a collection of debt) but an enforcement by the Trustee to sell property which is collateral for a debt (the note). McCarthy & Holthus LLP is a known law firm that is part of a nationwide network that foreclosures on property wherein the borrower is claimed to be in default because of non-payment on the actual obligation (the Note).
Other courts have narrowly interpreted the matter in both ways. This is where the conflict has occurred and this is why SCOTUS is hearing the matter. If the Trustee is only attempting to satisfy the Lender’s need to recover the collateral that was pledged and does nothing more than use the contractual obligation of publication and sale to satisfy the terms of the security instrument (deed of trust) … that’s one thing. The second the Trustee steps over the line and retains a law firm to enforce the terms of the security instrument and demand “payment” of a “sum certain”, THEN the attempt to collect a debt IS IN FACT, where misrepresentations occur, which would constitute a violation of the FDCPA! My non-lawyer wisdom tells me to let YOU be the judge here!
If the law firm has all of its ducks in a row, that’s one thing. But in this case, the argument tends to indicate it didn’t, which is why Dennis Obduskey filed suit. This case represents one of the biggest challenges to non-judicial foreclosures in the United States; thus, this is worth the read if you are contemplating such an action. Enjoy!
P.S.: The same amount of federal and state conflict has occurred with the MERS® System and the way the courts have treated it. Why SCOTUS won’t hear those relative arguments may change. For now, that issue is at a standstill.