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9th Cir. Rules Letter’s ‘Benefits’ of Paying Time-Barred Debt Not Misleading Under FDCPA, CFPB to Address SOL Disclosures

The U.S. Court of Appeals for the Ninth Circuit recently held that a collection letter offering payment options on a time-barred debt and listing “benefits” of paying the debt was not deceptive or misleading under the Fair Debt Collection Practices Act. Meanwhile, the CFPB is expected to take up the issue of time-barred debt disclosures early next year.

6th Cir. BAP Holds So-Called ‘910 Claims’ To Be Treated Like Other Allowed Secured Claims

The Bankruptcy Appellate Panel for the U.S. Court of Appeals for the Sixth Circuit (Sixth Circuit BAP) recently reversed a lower bankruptcy court’s ruling that rejected an objection to the confirmation of debtors’ chapter 13 plan asserted by the holder of a claim relating to vehicle financing incurred within 910 days of the bankruptcy petition (a 910 claim).

5th Cir. Rejects Borrower’s Texas Foreclosure Statute of Limitations Challenge

The U.S. Court of Appeals for the Fifth Circuit recently affirmed judgment against a borrower for quiet title claims brought against the owner and servicer of her mortgage loan, and entered judgment of foreclosure in the loan owner and servicer’s favor on their counterclaims for foreclosure against the borrower.

2nd Cir. Holds False Claims Act Applies to Loans Made By the FRBs

The U.S. Court of Appeals for the Second Circuit recently held that the federal False Claims Act (FCA) applies to persons who present false or fraudulent loan applications to Federal Reserve Banks (FRBs) because the latter are “agents of the United States” within the meaning of the FCA and the loan money is provided by the United States to advance a government program or interest within the meaning of the FCA.

Foreclosing FHA-Insured Mortgages in Ohio: Answers to Common Questions Posed in Contested Litigation

Lenders foreclosing FHA-insured mortgages in Ohio often face challenges that contest the lender’s compliance with relevant regulations from the U.S. Department of Housing and Urban Development (HUD). Like most courts throughout the nation, Ohio courts treat HUD regulations as contractual terms incorporated into FHA-insured mortgage loan documents. As Ohio case law on this issue continues to evolve, confusion—and sometimes shock—can arise for out-of-state lenders unfamiliar with the state-specific intricacies of litigating contested foreclosures involving FHA-insured mortgage loans in Ohio.

7th Cir. Reduces Punitive Damage Award Against Mortgage Servicer by Over 80%

The U.S. Court of Appeals for the Seventh Circuit recently reversed as excessive a jury’s award of $3 million in punitive damages against a mortgage servicer for inadequate recordkeeping, misapplication of payments, and poor customer service. However, the Court affirmed the jury’s award of $582,000 in compensatory damages and remanded the case to the trial court with instructions to reduce the punitive damages award to $582,000, a 1:1 ratio of compensatory to punitive damages.

11th Cir. Adopts ‘False Name Exception’ to Creditor Liability Under FDCPA

The U.S. Court of Appeals for the Eleventh Circuit recently reversed the dismissal of a pro se consumer’s claims under the federal Fair Credit Reporting Act (FCRA), holding that he stated a plausible claim for relief with his allegations that the defendant creditor obtained his credit report without his consent, and failed to reasonably investigate his credit reporting disputes. However, the Court affirmed the trial court’s dismissal of the consumer’s claim under the federal Fair Debt Collection Practices Act (FDCPA) that the creditor defendant used a “false name” in attempting to collect the debt owed to it.

Supreme Court: FDCPA Claims Run from Date of Violation – Not from Date of Discovery

There is no discovery rule for federal Fair Debt Collection Practices Act claims, the U.S. Supreme Court held today. Affirming the U.S. Court of Appeals for the Third Circuit's decision in Rotkiske v. Klemm, today’s opinion also overrules an earlier ruling from the U.S. Court of Appeals for the Ninth Circuit, Mangum v. Action Collection Serv., Inc. There, the Ninth Circuit permitted FDCPA claims to run from when the plaintiff knows or has reason to know of the violation.

7th Cir. Reverses Dismissal of FDCPA Claim Involving Statement That 1099C Form May Be Filed

The U.S. Court of Appeals for the Seventh Circuit recently reversed the dismissal of a debtor’s claim under the federal Fair Debt Collection Practices Act, holding that the debtor stated a plausible claim that the dunning letter she received violated the FDCPA. Here, the Court held that the dunning letter at issue implied that the debt collector would file a 1099C form with the Internal Revenue Service, when in reality it was clear to the Seventh Circuit that the creditor would never file a 1099C form because the amount in each letter was less than $600.