Sixth Circuit Enforces FDCPA Against Loan Servicer: Defendants “Cannot Have it Both Ways.”

No. 09-4220 Bridge, et al. v. Ocwen Fed. Bank, et al

Further, we find disingenuous Ocwen Bank’s argument that “Ocwen also is not
a debt collector because servicing transferred to Ocwen on May 1, 2002, and Plaintiffs
themselves allege that the account was not in default at that time.” (R. 98 at 7). We note
this argument is exemplary of an unsettling trend in FDCPA claims. Defendants seek
to have it both ways: after having engaged in years of collection activity claiming a
mortgage is in default, Defendants now seek to defeat the protections of the FDCPA by
relying on Plaintiffs’ position throughout those years that the mortgage is not in default.
No. 09-4220 Bridge, et al. v. Ocwen Fed. Bank, et al. Page 9
As noted in the analysis of the Third Circuit, FDCPA coverage is not defeated by clever
arguments for technical loopholes that seek to devour the protections Congress intended.

. . .

Thus, a FDCPA defendant cannot escape coverage under the Act by asserting
to the court that the debt was not actually in default, despite having dunned plaintiffs for
months or years in the face of plaintiffs’ pleas or proof that the collector has made some
error. A defendant may not retroactively change the status of the plaintiff it has pursued
as an alleged debtor. To hold otherwise would defy the clear congressional mandate we
are charged with upholding.

. . .

The Bridges have stated a claim under the FDCPA. They allege that there is no
assignment of record to establish that Deutsche is a creditor or that Ocwen Bank is a loan
servicer; that Ocwen Bank made persistent efforts to collect a debt, i.e., mortgage
payments; and that the Defendants used the mails as well as an instrumentality of
interstate commerce, i.e., the telephone system, to do so. Thus, they have sufficiently
alleged that the Defendants are debt collectors, rather than creditors or loan servicers.
See Llewellyn v. Shearson Fin. Network, Inc., 622 F. Supp. 2d 1062, 1073 (D. Colo.
2009) (accepting for purposes of Rule 12(b)(6) an allegation that defendant was a debt
collector due to its failure to legally obtain the right to collect a debt).
They further allege that Defendants have impermissibly communicated with third
parties concerning Lisa Bridge’s asserted outstanding debt; that Defendants have ignored
their repeated requests to cease communications; that Defendants have targeted their
personal telephone lines with the intent to annoy, abuse or harass them; and that they
have falsely reported the amount of the debt the Bridges owe (or don’t owe) to the credit
reporting agencies and to other parties. These allegations, which must be taken as true,
are more than sufficient to state a plausible claim for relief based on the FDCPA.

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