PrintConsumer Protection - Mortgage Loan - RESPA - FDCPA - Damages
In plaintiffs' suit alleging defendant mortgage lender violated the Real Estate Settlement Procedures Act and the Fair Debt Collection Practices Act by failing to properly credit payments on their mortgage loan, a Richmond U.S. District Court grants summary judgment for defendant on plaintiff's RESPA claims, but rejects defendant's contention that it is not a "debt collector" under the FDCPA because its over $2 billion of its default loan business is only 21 percent of its total business.
Plaintiffs have alleged several violations of RESPA by defendant Countrywide pertaining to two qualified written requests that they allegedly sent to Countrywide, as well as violations of RESPA provisions governing disclosure of information to credit reporting agencies. Defendants contend their replies to the March 2006 qualified written request contained all the requested information and otherwise was a proper response under RESPA.
When a borrower's request is for specific information and not for an "investigation" to be conducted, providing the requested information is sufficient to fulfill the RESPA obligations. Otherwise to require a loan servicer to always conduct an essentially "blind" investigation of each account that it receives qualified written requests for, even when those requests only seek specific information, would be unduly burdensome, if not unnecessary and/or counterproductive. Such is especially so where the borrower is represented by counsel who is presumably knowledgeable in knowing what to request.
Defendant responded appropriately to plaintiffs' March 2006 qualified written request. As to the January 2007 written request, RESPA duties were not implicated as the letter was not received by Countrywide nor was it received by an agent authorized to receive its qualified written requests. Even if plaintiff's January 2007 letter was intended for Countrywide, plaintiff has failed to offer any evidence that the letter was actually received by Countrywide, or a properly designated agent. Defendant's motion for summary judgment as to the Jan. 11, 2007 communication is granted.
Countrywide also seeks summary judgment on plaintiffs' FDCPA claims, asserting that the court should focus on the percentage, or volume of business activity attributed to debt collection, in determining whether Countrywide regularly engages in such activity. Under a volume analysis, Countrywide asserts it is not a debt collector, as acquisition of loans that were in default at the time of acquisition have been less than 1 percent of Countrywide's total acquisitions over time, and the acquisition an servicing of such loans has averaged only 0.21 percent of Countrywide's total business.
Countrywide's argument fails to take into account the breadth of Countrywide's debt collection activities. While a small percentage of Countrywide's overall business involves debt collection, there are still a significant portion of the population who are impacted by Countrywide's debt collection efforts. The dollar value associated with that portion of its business is $2,404,958,058, a rather significant amount. It is also readily apparent that the acquisition and servicing of Countrywide efforts constitute a regular debt collection practice, supported by significant resources and funding. Although not proportionally significant in Countrywide's overall business activities, its debt collection activities are such that they constitute "regular debt collection," as defined by the Act.
Plaintiffs are alleging that Countrywide is a debt collector pursuant to the statute, and as the parties dispute whether the loan was in default at the time of defendant's acquisition of it, there is a material factual dispute as to the issue that must be resolved at trial. Defendant's motion for summary judgment as to the substantive elements of plaintiffs' FDCPA claim is denied.
Plaintiff Dannie Carter is only permitted to recover under those sections of the Act by which he is considered a "consumer," or the violation necessarily is against a person other than the consumer. As such, his claims under 15 U.S.C. §§ 1692(c) and 1692(d) are proper as they include persons beyond the consumer.
Carter v. Countrywide Home Loans Inc. (Dohnal, J.) No. 3:07cv651, Aug. 25, 2009; USDC at Richmond, Va. VLW 009-3-488, 25 pp.
