In the case of Obduskey v. McCarthy & Holthus, LLP, the Legal League 100 [1] has filed an amicus curiae brief in support of McCarthy & Holthus. The Legal League 100 is an association comprising members of several leading financial services law firms in the country.
Legal professionals representing the Legal League 100 member firms such as BDF Law Group [2]; Gilbert Garcia Group [3]; Hladik, Onorato & Federman [4]; McMichael Taylor Gra [5]y; Padgett Law Group; [6] and Wright, Finlay & Zak [7] authored the brief for the respondents, McCarthy & Holthus, LLP. [8]
The brief contended that law firms acting on behalf of their mortgage servicer clients by completing the non-judicial foreclosure process in states where permitted are not subject to regulation under the Fair Debt Collection Practices Act (FDCPA). The brief noted that such servicers are not collecting a debt as defined under the plain language of the statute.
"The Legal League 100 stands committed to serving mortgage servicing professionals and all of our industry partners,” said Legal League 100 Chair Roy Diaz.
Commenting on the amicus brief, Michelle Garcia Gilbert, Legal League 100 Advisory Council Vice Chair and counsel of record said, "Application of the FDCPA to nonjudicial foreclosures is an issue that has a significant effect on the foreclosure process in states from coast to coast. We appreciate the opportunity to contribute and applaud the Court for taking up this important issue."
Subjecting law firms engaged in non-judicial foreclosures to liability paves way for opportunistic debtors’ attorneys to file lawsuits alleging violations in states where foreclosure laws are in conflict with the FDCPA, the brief contends.
In support of the respondent, McCarthy & Holthus, the brief argues that finding in favor of the plaintiff is likely to encourage mortgage servicers to possibly proceed with judicial foreclosures in states where permitted. This will, in turn, result in a significant increase of time and costs associated with a foreclosure and the borrower will eventually bear the cost per the terms of most deeds of trust and state law.
The filing “represents yet another demonstration of the of the reach of the organization and the quality of financial services law firms that make up its membership," said Derek Templeton, Executive Director at Legal League 100.
The brief also stated the possibility of states with carefully crafted foreclosure laws designed to protect borrowers and lenders being compelled to rewrite their laws in order to comply with the FDCPA.