CFPB: "F" Is For "Foreclosure," "FDCPA"

The CFPB has weighed in on whether a trustee foreclosing on a California home qualifies as a "debt collector" under the federal Fair Debt Collection Practices Act. In Ho v. ReconTrust, N.A. (9^th Cir. Aug. 7, 2015), the Bureau filed an Amicus Curiae brief arguing that a trustee engages in debt collection if it sends consumers notices stating that nonjudicial foreclosure will occur unless the borrowers make payment on their debt. (That is, of course, standard practice in nonjudicial foreclosure states.) It argues that this is the case regardless of whether the conduct is related to the enforcement of a security interest—conduct which is frequently viewed as outside the purview of the FDCPA. The topic is of interest not only to entities that act as trustees under deeds of trust, but also to lenders, servicers and other entities involved in nonjudicial foreclosure.