On August 6, 2010, the U.S. Magistrate Court Judge for the Northern District of Georgia, Atlanta Division, issued a Final Report and Recommendation in the case of Michael Bourff v. Rubin Lublin, LLC. The Final Report recommended that Defendant, foreclosure law firm’s (hereinafter “law firm”) motion to dismiss be granted because its activities of enforcing a security interest falls outside the ambit of the Fair Debt Collection Practices Act (“FDCPA” or the “Act”), and even if the FDCPA applied Defendant’s notice was not misleading or deceptive.
On or about February 2, 2007, the Plaintiff, Michael Bourff, obtained a loan from America’s Wholesale Lender secured by his property. In connection with this loan, Plaintiff signed a note and granted a deed to secure debt in the property. After Plaintiff failed to make payment on the loan in the month of April 2009, he became in default under the note, the Security Deed was assigned to another entity, BAC Home Loan Servicing, LP f/k/a Countrywide Home Loans Servicing, LP (“BAC”) for the purposes of facilitating the collection of the debt. Plaintiff asserted that BAC was not a “creditor” as defined under the FDCPA and as a result violated the Act by sending Plaintiff a dunning notice on May 30, 2009, which contained a false, deceptive or misleading representation. Plaintiff alleged that the notice contained a false statement in violation of the Act because it identified BAC, rather than America’s Wholesale lender, as the “lender” and “creditor” to which the debt was owed. Since, Plaintiff asserted that BAC was merely a mortgage servicer and not a “creditor” Defendant’s dunning notice violated the Act.
The Magistrate Judge recommended that the FDCPA did not apply to the law firm because they were enforcing a security interest, rather than engaging in debt collection under § 1692e of the Act. Relying on a recent Eleventh Circuit decision and a recent Report and Recommendation filed in the same court, the Magistrate Judge stated that foreclosing on a security interest is not a debt collection activity. See Warren v. Countrywide Home Loans, Inc., 342 Fed. Appx. 458 (11th Cir. 2009); Shoup v. McCurdy & Candler, LLC, Civil Action No. 1:09-CV-2598-JEC-WEJ. In addition, the Magistrate Judge pointed out that in the notice, the law firm expressly stated that they had been retained to enforce the security interest and they were expressly identified as “Foreclosure Counsel.” These circumstances indicated that the law firm was not a debt collector under § 1692e of the Act, and its actions were not within the purview of the FDCPA. The Magistrate Judge also noted that FDCPA claims are often not allowed in cases involving non-judicial foreclosure, and “the fact that Georgia is a non-judicial foreclosure state further bolsters the law firm’s argument that it should not come under the ambit of the FDCPA.”
Furthermore, the Magistrate Judge stated that even if the FDCPA applied, the law firm did not violate the Act by misidentifying the “creditor”. The Judge noted that “any error by the law firm in stating that BAC was the creditor — as opposed to an assignee of the original lender — did not legitimately prejudice Plaintiff. Nor should it have misled or deceived Plaintiff as contemplated by the FDCPA.” Plaintiff was clearly advised that he could contact the law firm within thirty days of the notice to contest the validity of the debt and to obtain the contact information for the original creditor, and Plaintiff should have known, through the original loan documents, which he signed, that his original lender, or creditor was America’s Wholesale Lender. The Magistrate Judge ruled that in this circumstance, “even the ‘least sophisticated consumer’ would not have been, harmed, or even misled, by the law firm’s technically inaccurate identification of BAC as the ‘creditor’”. For more information, see Michael Bourff v. Rubin Lublin, LLC, Civil Action No: 1:09-CV-2437-JEC-ECS (N.D.G.A. Aug. 06, 2010).