Foreclosing Servicer & State Law

I have a question about collection and foreclosure.

I’ve read on your site that a collection company has to be registered in the state that the debtor lives in order to collect from them. Is it the same with foreclosures, too? Does a mortgage company or a servicer have to be registered to collect in the state of the property being foreclosed?

If so, how do I go about finding out if they are? What agency do I contact?

Thank you!

Clarissa

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Hi Clarissa,

Requirements for registration/licensing of collection agencies (if applicable for your state) are not unilateral and vary by state.  National Banks have federal preemption over state laws with regards to lending, but not debt collection.  And most notably, if the servicing of the mortgage loan is transferred when the loan is in default, then the new servicer is a debt collector and must abide by the FDCPA.

Thanks for the questions and hope this helps.

Paul

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