Facing Foreclosure on the Emerald Coast? Fair Debt Collection Act May Help You

Today I received an email from an attorney in the Niceville and Destin Florida area regarding helping homeowners facing foreclosure.  The attorney, Mark A. Violette, noted that there are several federal laws that will protect the homeowner, notably the Fair Debt Collection Practices Act.  He said that lenders are required to provide a copy of a loan history report to the borrower upon request.  Most mortgage lenders use loan servicing companies, and these companies are unable to comply with such a request.  The good news is that if the lender does not provide the report, collection efforts and the impending foreclosure are halted.  Attorney Violette kindly provided the following example:

Step One:

Lender files a Foreclosure Complaint.

Attached to the Complaint is a Notice Pursuant to the Fair Debt Collection Act (“FDCA”) stating the homeowner has 30 days to contest the amount due.

Step Two:

Attorney Violette files a Motion to Stay and Request for Loan History Report pursuant to FDCA.

The lender must cease all collection efforts until the lender has provided the mortgagor with complete verification of the disputed amount of debt.

Step Three:

Wait for Lender to provide the loan history report, WHICH NEARLY ALL LENDERS ARE UNABLE to produce.

This may allow time for the homeowner to complete a Short Sale, or find another satisfactory resolution to the foreclosure.