Defining Debt Collectors

first_img Tagged with: Debt Collection Defaults Fair Debt Collection Practices Act henson v santander Print Features Supreme Court  Print This Post The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Demand Propels Home Prices Upward 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Demand Propels Home Prices Upward 2 days ago Debt Collection Defaults Fair Debt Collection Practices Act henson v santander Print Features Supreme Court 2018-01-17 David Wharton in Daily Dose, Featured, Magazine, Print Features Lauren Riddick handles contested foreclosure matters as a member of the Codilis & Associates, P.C.’s Contested Litigation Unit and also assists with title matters. She joined the firm in August 2013. Prior to joining the firm, she was an Adjunct Professor of Law with several colleges and a Securities Attorney for a large broker-dealer in Florida. Riddick is a member of the Illinois and Florida Bar Associations. She received her Juris Doctor in 2001 from the University of Florida Levin College of Law, and her Bachelor of Science in 1998 from the University of Florida. About Author: Lauren Riddick Defining Debt Collectors Editor’s note: This story was originally featured in the January issue of DS News, out now.The United States Supreme Court, in Henson v. Santander Consumer USA Inc., settled a circuit court split and solidified what may turn out to be a large exemption from the rigors and risks associated with debt collection under the Fair Debt Collection Practices Act (FDCPA).A bank purchased defaulted loans and then sought to collect on that debt themselves, as opposed to hiring a third-party debt collection agent, ultimately resulting in a dispute as to whether FDCPA violations had occurred.The FDCPA defines debt collectors as any person whose business’s “principal purpose” is the collection of debt or who “regularly collects or attempts to collect … debts owed … another.”  In Henson, the purchasing bank was not alleged to have a “principal purpose” of debt collection, which left only the second part of the debt collection definition in dispute. Focusing on this latter language, the court ruled that an FDCPA “debt collector” does not include defaulted debt purchasers who seek to collect on those debts themselves (rather than using a third party), as they are not seeking to collect debts “owed … another.”The court stated that, under the statute, it didn’t appear to matter how a debt owner became a debt owner—i.e., it didn’t matter whether the owner originated the debt or purchased it later. Moreover, the court was unconcerned with the fact that the bank had purchased defaulted debts, as opposed to debts prior to default. The main consideration was simply whether the debt collection was for one’s own debt, or for another’s.The court further tackled the FDCPA’s rather confusing interplay of the terms “creditor” and “debt collector.” The distinction is important because although debt collectors are subject to the FDCPA, creditors generally are not. Those aligned with the petitioners argued that “debt collector” and “creditor” are mutually exclusive under the FDCPA. Therefore, so the argument goes, if under the FDCPA one must either be a creditor or a debt collector (not both), and those seeking to collect defaulted debts are excluded from the creditor definition, then the collection of defaulted debts necessarily must fall into the debt collector category. In other words, the collection of defaulted debts has to qualify as “debt collection” under the FDCPA because it’s excluded from the creditor category.However, in disagreeing with this argument, the court pointed out that the FDCPA’s creditor definition only excluded debt assigned in default when the debt was transferred “solely for the purpose of facilitating collection for another.”  The court concluded that “a company collecting purchased defaulted debt for its own account … would hardly seem to be barred from qualifying as a creditor under the statute’s plain terms.”  Therefore, the court emphasized again that the main focus has to be whether the debt collection is for oneself, or for another—not the debt’s default status. In so ruling, the court overturned decisions out of both the 7th and 3rd circuits that had limited their analyses to the default status of the debt obtained, rather than whether the collection was occurring for another.Petitioners also argued that the business of purchasing defaulted debt needed the same rules applied to independent debt collectors, as “no other result would be consistent with the overarching congressional goal of deterring untoward debt collection practices.”  In response, the court stated that Congress hadn’t had the chance to consider what should be done about those in the business of purchasing defaulted debt, since the market for defaulted debt developed after the FDCPA’s 1977 passage. And, in refusing to consider policy considerations, the court stated that “… it is never our job to rewrite a constitutionally valid statutory text under the banner of speculation about what Congress might have done had it faced a question that, on everyone’s account, it never faced.”  Instead, the court reiterated that it is the judiciary’s job to apply, not amend legislation, and that “[the] legislature says…what it means and means…what it says.”Given the court’s analysis, a servicer may be categorized as a debt collector when collecting debts on behalf of an investor, since it would be attempting to collect the debt owed another. In fact, at least one court has already similarly ruled. Therefore, to avoid the debt collector moniker and safely reap the benefits of the court’s decision, a servicer would need to be collecting on debts wholly owned by the servicer itself. Share Savecenter_img Home / Daily Dose / Defining Debt Collectors Servicers Navigate the Post-Pandemic World 2 days ago The Best Markets For Residential Property Investors 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Sign up for DS News Daily Data Provider Black Knight to Acquire Top of Mind 2 days ago Related Articles Previous: Refinance Volumes Increased in November 2017 Next: Georgia Addresses Statute on Execution of Documents Governmental Measures Target Expanded Access to Affordable Housing 2 days ago January 17, 2018 1,922 Views Subscribelast_img read more

GSEs Launch Mortgage Deferment Programs

first_img Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Home / Daily Dose / GSEs Launch Mortgage Deferment Programs Governmental Measures Target Expanded Access to Affordable Housing 2 days ago March 25, 2020 1,833 Views Fannie Mae has updated their Lender Letter to require that a borrower be evaluated for payment deferral prior to other mortgage loan modifications.Freddie Mac has announced similar changes, with the Freddie Mac Payment Deferral program. According to the GSE, effective January 1, 2021, Freddie Mac will launch a loss mitigation solution for borrowers who became delinquent due to a short-term hardship that has since been resolved.”Customers want deferrals on the front end, as a ‘right now’ option,” said Courtney Thompson, SVP, Default Mortgage at Flagstar Bank. “I think consumers would be much happier with the relief we could offer them if that deferral was available now.”According to Freddie Mac, the Payment Deferral is designed to provide relief to eligible Borrowers who have the financial capacity to resume making their monthly payments, but who are unable to afford the additional monthly contributions required by a repayment plan.”I applaud the decisive and continuing actions by FHFA, Fannie Mae, and Freddie Mac to provide clarity to servicers and assistance to homeowners impacted by the current health crisis,” said Ed Delgado, President and CEO, Five Star Global. “While mortgage relief is a much-needed step, we call on FHFA and other government stakeholders to continue working with the mortgage industry to ensure the ongoing stability of the housing market and our system of homeownership.”This development follows upon the FHFA’s announcement that the GSEs would provide payment forbearance to borrowers impacted by the coronavirus. This forbearance would permit a mortgage payment to be suspended for up to 12 months due to hardship considerations.Additionally, suspension of foreclosures and evictions for mortgages backed by the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) will extend at least 60 days.”I was happy to see the GSEs came out with a simple deferment program that helps out borrowers and defers payments to the end of term while they’re going through their difficulties,” said Wes G. Iseley, Senior Managing Director, Carrington Holding Company, LLC, and Chair of the National Mortgage Servicing Association (NMSA). “We hope that FHA and HUD will look at this and adopt a similar program as well.”In a letter to HUD, the NMSA recently advocated for deferments as the best tool to help homeowners and the industry during this time.“This option is preferred over forbearances, trial options, and modifications currently being discussed to assist homeowners,” the letter states.“Deferments have assisted borrowers in times when there is a short-term financial disruption,” it continues. “A deferment is an extension of the term of the loan with the coupon rate remaining. The borrower would resume monthly payments at the end of the deferment period as adjusted by any interim escrow analysis change in payment.”As the letter notes, no firm is staffed adequately to accommodate the documentation, analysis, calculation, recording, and paperwork required for the levels of forbearance, trial plans, and modifications projected in the current crisis. For reference, staffing numbers would need to be brought to the type of multiples of servicing headcount not seen since the financial crisis of 2008.Here’s a link where you can track related announcements from FHFA, Fannie, and Freddie. Coronavirus Deferral Fannie Mae Freddie Mac 2020-03-25 Seth Welborn Share 1Save Servicers Navigate the Post-Pandemic World 2 days ago Previous: Senate Leaders Reach Deal on $2T Stimulus Package Next: FHFA Tracks GSE Foreclosure Prevention About Author: Seth Welborn Sign up for DS News Daily Related Articles Demand Propels Home Prices Upward 2 days agocenter_img GSEs Launch Mortgage Deferment Programs Tagged with: Coronavirus Deferral Fannie Mae Freddie Mac Data Provider Black Knight to Acquire Top of Mind 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago The Best Markets For Residential Property Investors 2 days ago Demand Propels Home Prices Upward 2 days ago in Daily Dose, Featured, Government, News  Print This Post Data Provider Black Knight to Acquire Top of Mind 2 days ago Subscribe The Best Markets For Residential Property Investors 2 days ago Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer. last_img read more

USDA sets 2009 goal for livestock tracking system

first_img If only 50% of animals are registered, “It is not a workable system,” Johanns said. “But I think producers . . . understand that, and my hope is that they will embrace what we are offering, which is a voluntary approach.” Apr 6 USDA news release The US Department of Agriculture (USDA) began working on its National Animal Identification System (NAIS) after the first US case of bovine spongiform encephalopathy, or mad cow disease, was discovered in December 2003. After that case and the two subsequent BSE cases, it took investigators weeks or longer to trace other cattle that might have been exposed to the disease. An implementation plan released by the USDA yesterday calls for registration of 70% of premises and identification of 40% of animals by January 2008. By January 2009, the USDA aims to have all facilities registered and identification procedures in place for all newborn animals. In addition, the agency hopes to have complete movement data available for 60% of animals under 1 year old by that time. Under the current plan, industry participation in the NAIS is voluntary, but Johanns said it could become mandatory if producers and other industry groups are slow to sign on. The USDA has authority to make the program mandatory without new legislation, he told reporters. The NAIS is a cooperative and voluntary effort of the federal government, states, Indian tribes, and industry. Under the plan, each newborn animal will get a 15-digit identification number linked to its birthplace. The plan also calls for the registration of all livestock premises—farms, feedlots, sale barns, packing plants, and other facilities—coupled with the creation of animal tracking databases managed by the states and industry groups. “A national animal ID system will dramatically improve our ability to respond to animal disease outbreaks,” Johanns said at the news conference. The system “will help animal health officials identify the birthplace of a diseased animal and shorten the time required to trace the animal’s history to identify other potentially exposed animals.” Parts of the system are already built. Registration of premises was under way in all 50 states and two territories by August 2005, and 235,000 premises, roughly 10% of the total, have registered, USDA officials said. Also, animal identification began last month. USDA NAIS site “A long-term goal is to be able to identify all animals and premises that have had direct contact with the disease of concern within 48 hours of discovery,” Agriculture Secretary Mike Johanns said at a press conference on the plan. Given the scale of the program, the USDA’s implementation schedule is “very amibitious,” Johanns said. “We are asking the industry, not just cattle but in other areas, to really change how they look at things.” See also: The USDA has spent about $84 million on the system so far, said Johanns. Yesterday the USDA released technical standards to provide for the linkage of private animal tracking databases with the NAIS. The agency will sign agreements with private databases that meet the standards, officials said. Johanns described the NAIS as an enormous undertaking. “At any given time you have 90 to 100 million head of cattle in the United States. There has never been a system put in place that would deal with that kind of magnitude,” he said. “We are talking about a system that literally says from the time of their birth through the entire chain, we will trace that animal until we can ascertain where the animal was finally processed.” Apr 7, 2006 (CIDRAP News) – Under a schedule laid out yesterday by federal agriculture officials, a nationwide livestock identification system to help in the investigation and control of animal disease outbreaks will be fully operational by 2009. By early next year, the USDA expects to have a system in place that will permit state and federal animal health officials to query the NAIS and private databases during disease investigations. The system will be called the Animal Trace Processing or Metadata system, the agency said. The primary focus of the NAIS now is on cattle, officials said. But working groups are looking at the extension of the system to other species, including swine, sheep and goats, horses, deer and elk, and even llamas, said Dr. John Clifford, the USDA’s chief veterinarian. Johanns said the US livestock industry will need the tracking system to stay competitive with other beef exporters, such as Australia and Canada. “Traceability is being used as a marketing tool by several countries,” he said. “For example, Australia is aggressively marketing animal traceability to gain a competitive advantage over us.” Transcript of Apr 6 USDA news conference Newspaper reports have described cattle producers as wary of the plan, particularly the cost of the identification tags and the privacy of data. Meanwhile, some consumer groups have pressed the USDA to move faster and to make the plan mandatory.last_img read more