This case pits a homeowner against a mortgage servicing company that has improperly billed her for amounts not due. The homeowner entered into a mortgage modification agreement, but when the mortgagee sold the loan, the new mortgage did not comply with the agreement, claimed the homeowner was in default, and attempted to foreclose. The foreclosure court denied foreclosure, enforced the modification agreement, and sanctioned the mortgagee. Even after that order, however, the mortgage servicer sent monthly bills that misrepresented the amounts due. The homeowner sued under the Fair Debt Collection Practices Act (FDCPA), alleging that the servicer was a debt collector, and that the bills were communications concerning the collection of a debt that contained misrepresentations, were harassing, and were unconscionable.
The U.S. District Court for the Middle District of Florida dismissed the complaint on the ground that, in its view, the monthly billing statements were not communications in connection with the collection of debt, and were not subject to any provisions of the FDCPA. The court relied on an opinion of the Consumer Financial Protection Bureau (CFPB), which had stated that mortgage servicers’ monthly billing statements were exempt only from a single provision of the FDCPA (prohibiting communications by a debt collector to a consumer after the consumer has directed the collector to cease further communications), because mortgage servicers are required by the Dodd-Frank Act and regulations issued under it to send monthly billing statements.
The homeowner appealed to the Eleventh Circuit. In an amicus curiae brief supporting the homeowner, Public Citizen and the U.S. PIRG Education Fund explained that the district court misread the CFPB opinion, which concerns only the FDCPA’s cease-communications provision and in fact presumes that the other protections of the FDCPA remain applicable to a mortgage servicer’s billing statements if the mortgage servicer otherwise qualifies as a debt collector under the FDCPA.
In a May 2022 decision in favor of the homeowner, the court of appeals held that monthly mortgage statements required by the Truth in Lending Act (TILA) can constitute communications in connection with the collection of a debt under the FDCPA, at least when—as here—they contain debt-collection language that is not required by that Act and the context suggests that they are attempts to collect or induce payment on a debt. Addressing the CFPB opinion, the court explained that nothing in that non-binding opinion indicated that the CFPB sought to exclude all TILA-required periodic mortgage statements from the FDCPA’s coverage.