Foreclosure Complaints Subject to Claims of Fair Debt Collection Practices Act (FDCPA) Violations
In response to the April 7, 2015, 3rd Circuit decision in Kaymark v. Bank of America and Udren, the decision was held that an actionable misrepresentation under the federal Fair Debt Collection Practices Act (FDCPA) may exist where the body of the foreclosure complaint lists certain “not yet incurred fees” as “due and owing”, even if the fees were fixed under the FNMA servicing guidelines. Gross McGinley attorneys have now revised their foreclosure complaints to protect the bank and the firm. Now, the complaints should:
- specifically allege that the FNMA fees are “estimates” and/or are fees and cost “ to be incurred” in the foreclosure,
- remove the attorney fees from the amount due and owing/damages paragraph,
- remove the yet to be incurred attorney fees and costs from the figure in the demand clause, but alleging the FNMA approved figures and costs to be properly recoverable, and
- remove the yet to be incurred attorney fees and costs from the figure set forth in the required FDCPA letter we attach to the complaint.
Recovery of the fees and costs should be included when filing a Praecipe to Enter Judgment on the attorney commission/fees line so that those fees/costs are part of the judgment amount to be recovered.