(OP-ED) — The author of this post is the author of The FDCPA, Debt Collection and Foreclosures … and posits the following for educational purposes and for your consideration in the paradigm shift that has now become the focus of thousands of consumers.
I’ve noticed an uptick in the number of pro-bank/pro-debt collector law firm postings regarding the U.S. Supreme Court’s latest narrow ruling in the Obduskey case (out of the 10th Circuit Court of Appeals). I love how these folks like to “pat themselves on the back” for their observations that non-judicial foreclosure proceedings can still be business as usual, despite the caveats their posts now contain. Why on earth would they post “caveats” to the debt collection industry (which includes law firms like the one Dennis Obduskey filed an FDCPA action against) if they were so sure of themselves in being able to just walk all over borrowers they claim are in default?
Despite the fact the nation’s highest court resolved the federal circuit split on whether non-judicial foreclosures can continue as “business as usual”, the ruling was “narrow in scope” regarding the enforcement of security interests as defined under 15 USC § 1692f(6), which is what the Court focused on in its decision: Obduskey v McCarthy & Holthus LLP, 586 U.S. ___ (2019)
What Congress intended …
Creditors used to love the idea that they could open up a can of “whoop ass” on debtors any time they felt like it, even late-night, repetitive or threatening phone calls (“I know where you live” and “your mommy’s going to jail” and “we’re going to sue you if you don’t pay” or “we’re going to bomb your office building if you don’t come down here and pay this bill” or “you !@)#(%^!”.) The caveats I’m seeing in these law blog posts still make reference to the fact that the latest FDCPA-related ruling DOESN’T mean “business as usual”. It simply means that debt collectors trying to enforce deeds of trusts have to be extra careful NOT to step over that well-defined line of intended “abuses” that do in fact, fall under the FDCPA!
Enforcing a recorded security interest (deed of trust, security deed, HELOC, etc.) in a non-judicial state means just that. If a third party (the trustee, NOT MERS) intends on using the terms of the security instrument to act as the third party in taking back collateral, the collection activity has to specifically and purely involve that process. The narrow ruling still prohibits abusive debt collection practices, whether or not a non-judicial foreclosure is still the intended outcome. The abusive debt collection practices fall under 15 USC 1692d and 15 USC 1692e, as well as portions of 15 USC 1692f (1) through (5) and (6)(B)(C) and (7) and (8). See here for clarification: FAIR DEBT COLLECTION PRACTICES ACT 09-1996
If you have a case … you have a case …
Every time the debt collection industry scores a narrow victory, they pontificate their accomplishments as soon as humanly possible, almost to the point of bragging rights (see, I told you so … lemme rub your nose in it) kind of stuff. This is typical of the legal profession, especially the kind that can operate unchecked when it comes to carrying out enforcement actions.
One of the more remarkable things I find is that all non-judicial foreclosures are assumed to be legal unless otherwise challenged. One of the things I put forward in the book (mentioned above) is that careful analysis of the debt collection laws needs to be strictly adhered to (the letter of the law), which you are attempting to assert was violated.
How the “chain of title” points to potential suspect violations of 15 USC 1692e(5) …
Here’s where the latest ammo we’ve been sharing on the C&E comes into play. Cancellation and expungement (C&E) actions are used to disable and destroy the authority these debt collectors rely on to even enforce a security instrument. Under “False or misleading representations” (§ 807 of the FDCPA), section 5 prohibits false, deceptive or misleading representation in threatening “to take any action that cannot legally be taken” … which would mean to me that if you could strip away the lies contained within the assignments that generally precede the initiation of a non-judicial foreclosure action through a C&E, the authority of the debt collector would be void and the debt collector’s representations would then be false and misleading, which IS a violation of the FDCPA!
Champagne budget … Beer Belly Pocketbook!
A C&E action is definitely a cheaper way to wage war on an unsuspecting servicer (who is really behind the scenes of the debt collection/non-judicial enforcement proceeding), stripping away whatever rights it thinks it has to steal your house on behalf of party or parties unknown (which could be Fannie Mae or Freddie Mac, lest we hold the GSEs unaccountable in the end) than waging an all-out FDCPA battle in federal court, which costs substantially more money. Try to keep the emotions in check for the moment while I finish.
The document the servicers are creating is the assignment of deed of trust (much like the assignment of mortgage), which they claim gives them the authority (on behalf of the alleged “lender”) to appoint a substitute trustee to initiate a non-judicial foreclosure. Do you have a contract with the mortgage loan servicer? (Didn’t think so.) However, servicers have Limited Powers of Attorney, which they claim give them the authority to do whatever they want, including wading into the shark-infested waters of violations created under the FDCPA. Strip away their authority under the assignment as void … they’re like “chum in the water”.
This is why I’m releasing a two-day training video DVD set with the latest book by attorney Al West and myself, The C&E on Steroids! in very short order. What better a way to deal with America’s tainted real property records than to fight the good fight head-on in state court, rather than wage a flimsy, unsupported war in federal court without first demonstrating the ultra vires behavior of the trustee thanks to a phony assignment, which you’ve knocked out FIRST in a C&E action!