The U.S. Court of Appeals for the Sixth Circuit Monday handed down an opinion that defined mortgageforeclosure actions as “debt collection” under the Fair Debt Collection Practices Act (FDCPA), reversing a lower court decision.
In Glazer v. Chase Home Finance, LLC, et. al., the appellate panel said that third parties initiatingforeclosure actions must comply with the provisions of the FDCPA.
The case was brought by plaintiff Glazer after he inherited a home that still had an outstanding and active mortgage serviced by Chase. After six missed payments, Chase engaged with law firm Reimer, Arnovitz, Chernek & Jeffrey Co., LPA (RACJ) to begin foreclosure proceedings.
In a complicated twist indicative of the time, Chase did not own the mortgage in question. In fact, the bank had not even originated it. The loan was owned by Fannie Mae and Chase had been assigned as the servicer from the originator. When RACJ moved to foreclose, it represented as owner of the loan Chase.