Foreclosures and the FDCPA

Foreclosures and falling home prices continue to plague Americans all over the country. According to a report by 60 Minutes, banks that want to foreclose on homes can’t find the original ownership documents. Where did they go? It turns out that corners were cut by lenders and their investors on Wall Street by not maintaining the documents at all, saving costs, back when home sales were strong and banks never worried about foreclosure. Now, some companies are routinely using forged paperwork to cover up these practices so they can move forward with the foreclosure process – a clear violation of consumers’ rights and resulting in people being removed from their homes under deceptive circumstances.

What does this mean for the millions of Americans who have fallen behind on their mortgage payments?

The Fair Debt Collection Practices Act was passed in the 1970’s to protect consumers against unfair and abusive tactics by collection agencies. Debt collectors for mortgage loans are subject to the guidelines of the Act so homeowners who are dealing with foreclosure at this time could have a valid claim to keep their homes if fraudulent practices like those described above have occurred.

NewOrleansCityBusiness.com reported that a Louisiana couple who defaulted on their mortgage following Hurricane Katrina was awarded $10,000 for the years of debt harassment they endured, including continued and persistent telephone collection calls. During foreclosure proceedings, CitiMortgage Inc. admitted to “lost” paperwork. Ultimately, a state judge ruled in favor of the couple, after finding that the FDCPA was violated.

It is important for consumers to know their rights in order to protect themselves from unfair debt collection. Anyone who is facing the possibility of foreclosure should learn the FDCPA and how collection laws defend their rights as a consumer. Debt harassment is against the law, and we have experienced attorneys that enforce the Act on behalf of consumers.