January 17, 2009

Debt Collectors Leave Messages To Their Peril

Filed under: FCCPA,FDCPA,Florida

FDCPA and Mini-FDCPA Pre-recorded MessagesI’ll be the first to admit that debt collectors have it rough these days.  While there would seem to be a plethora of past due debts, at the same time, the economy is in bad shape and many people simply can not pay.  So, the collection agencies and junk debt buyers of the world are becoming more aggressive with their collection tactics.  Fortunately for the Broken Credit Bloggers we have the FDCPA and for those in Florida there’s also the FCCPA (many other states also have a mini-FDCPA such as Florida’s FCCPA).  Let’s take a look at an order denying the debt collector’s motion to dismiss in a recent Florida debt collection case.

In Berg v. Merchants we see that debt collectors have another stumbling block when it comes to answering machines.  If the consumer hears the message, then they have to read the mini Miranda, otherwise trouble with 1692e(11) which makes the following a violation:

“The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action.”

And they also have to comply with 1692d(6) which makes the following a violation:

“Except as provided in section 804, the placement of telephone calls without meaningful disclosure of the caller’s identity.”

Now here’s the kicker.  In addition to always complying with the above two, debt collectors are prohibited from violating 1692c(b) which states:

“COMMUNICATION WITH THIRD PARTIES.  Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.”

The question then, is how does a debt collector comply with all three of the above when the debt collector has reason to believe there are other people living in the house with the consumer (spouse seems to be an exception)? 

Berg v. Merchants Association Collection Division, Inc. No. 08-cv-60660-WPD (S.D. Fla. Oct. 31, 2008)

Something tells me that debt collector pre-recorded messages are going to go the way of the Dodo; however in the meantime, some consumers will be compensated nicely through damage awards from FDCPA (and other state mini-FDCPA such as the FCCPA for Floridians) violations that result from the inevitable answering machine message that is overhead. 

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.

The Foreclosure Mills of Florida

Filed under: FCCPA,Florida,Foreclosure

Florida Foreclosure Attorney MillsThe daunting “foreclosure mills” of Florida – ready to take your house away.  There are only a handful of them – that is, there are only a handful of law offices that file all of the foreclosures in the state of Florida.  An April 2008 article on TBO.com titled “Law Firms Cash In On Foreclosures” listed the following firms as most popular for some 1,700 lis pendens filed in Hillsborough County Florida in the month of February 2008:

Florida Default Law Group — Tampa…….415

David J. Stern — Plantation………………..263

Marshall C. Watson — Fort Lauderdale…..182

Shapiro & Fishman — Tampa………………133

Smith, Hiatt & Diaz — Fort Lauderdale……75

Albertelli Law — Tampa………………………61

Daniel C. Consuegra — Tampa…………….47

Adorno & Yoss — Miami………………………41

Ben-Ezra & Katz — Fort Lauderdale……….33

Spear and Hoffman — Miami………………33

Attorney fees for these foreclosure mill attorneys by statute permit 3% of the principal balance as a “reasonable” fee in a foreclosure lawsuit; however, it seems that the foreclosing plaintiff/lenders have found law offices throughout the state that are willing to do the job for a flat fee of 1200 bucks and from what I’ve seen this doesn’t vary by loan amount.  Specifically, F.S. 702.065(2) reads (emphasis added):

In a mortgage foreclosure proceeding, when a default judgment has been entered against the mortgagor and the note or mortgage provides for the award of reasonable attorney’s fees, it is not necessary for the court to hold a hearing or adjudge the requested attorney’s fees to be reasonable if the fees do not exceed 3 percent of the principal amount owed at the time of filing the complaint, even if the note or mortgage does not specify the percentage of the original amount that would be paid as liquidated damages. Such fees constitute liquidated damages in any proceeding to enforce the note or mortgage. This section does not preclude a challenge to the reasonableness of the attorney’s fees.”

So, the term “foreclosure mills” seems to be an accurate depiction and in my opinion, the reason these law offices are able to charge this nominal fee is because the vast majority of homeowners do not answer the complaint.  In Florida, you have twenty days to respond from date of in-hand service (thirty if by publication) and not filing a response is exactly what these law offices would prefer the homeowner did – nothing, ignore it, that’s it, game over. 

Foreclosure is a big deal and there’s a lot at stake.  Per FNMA guidelines a foreclosure takes the borrower out of the housing market for five-years whereas a completed short sale permits the borrower to purchase again in as few as two-years.  Additionally, Florida foreclosure permits deficiency judgments either at time of foreclosure or a deficiency judgment can be sought at a later date.  Specifically, F.S. 702.06 reads (emphasis added):

“Deficiency decree; common-law suit to recover deficiency.–In all suits for the foreclosure of mortgages heretofore or hereafter executed the entry of a deficiency decree for any portion of a deficiency, should one exist, shall be within the sound judicial discretion of the court, but the complainant shall also have the right to sue at common law to recover such deficiency, provided no suit at law to recover such deficiency shall be maintained against the original mortgagor in cases where the mortgage is for the purchase price of the property involved and where the original mortgagee becomes the purchaser thereof at foreclosure sale and also is granted a deficiency decree against the original mortgagor.”

So what to do when going up against Goliath the lender and the experienced foreclosure mills?  Once again, let me share with you my opinion that they do not want to have to deal with a homeowner who has filed an answer. 

Here’s a Florida foreclosure complaint and here’s an answer (and affirmative defenses, motion to dismiss, counterclaims, and demand for jury trial).  Here are Florida foreclosure pleadings in a case where the homeowner is defended by “the foreclosure killer” one of the Country’s leading foreclosure defense attorneys.

But I digress.  Don’t think that these foreclosure mills are perfect.  Take a look at the complaint in an affirmative action in Dongen v. Florida Default Law Group, P.L. et al (8:2007cv01568, M.D. Fla.) and the case was settled.  Florida has a double whammy for the Fair Debt Collection Practices Act (FDCPA) and the Florida Consumer Collection Practices Act (FCCPA) and yes they award attorney fees.

The foreclosure mills of Florida.  Sometimes stopping that wheel is as simple as filing an answer – which is mysteriously followed by your accepted loan modification or short sale.  Go figure.

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.

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