Debt Collection Law Firms Must Follow FDCPA in Foreclosure Cases

March 7, 2018 Posted by kingcade

A federal judge has ruled that debt collection law firms are now subject to the rules of the Fair Debt Collection Practices Act in mortgage foreclosure cases.  The Fair Debt Collection Practices Act (FDCPA) was designed to help prevent creditor abuse and harassment.

U.S. District Judge Timothy J. Savage of the Eastern District of Pennsylvania denied a motion by law firm Phelan Hallinan Diamond & Jones seeking to dismiss plaintiffs Tina Collins and Glendale Walker’s FDCPA claim, which alleged the firm failed to cease all collection activity before verifying the debt after the plaintiffs first disputed it.

According to the judge’s opinion, the plaintiffs alleged that the foreclosure complaint and Phelan Hallinan’s response to their notice of dispute “contained false and misleading representations thru [sic] deceptive means in an attempt to collect a debt.’” In addition, Collins and Walker claimed that the firm threatened to proceed with the foreclosure action without first verifying the debt.

The plaintiffs also claimed that the firm falsely represented itself as counsel to Wells Fargo, leading Collins and Walker to believe that Phelan Hallinan was a part of Wells Fargo’s legal department.

“Foreclosure, although legal in nature, is ‘activity undertaken for the general purpose of inducing payment,’” Savage said. “A debt collector cannot avoid FDCPA liability simply by proceeding in rem rather than in personam. Therefore, for purposes of this action, Phelan was acting as a debt collector and engaged in debt collection activity when it communicated with the plaintiffs and filed the foreclosure action.”

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Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade Garcia McMaken website at


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