Law firms, mortgage lenders and servicers were just awarded more protection in serving non-judicial foreclosures, according to a recent Supreme Court ruling.
The ruling is a victory for the mortgage industry in its fight to retrieve property from delinquent homeowners. One attorney claims the ruling may eliminate thousands of similar homeowner lawsuits.
In the case of the Obduskey v. McCarthy & Holthus decision from earlier today, the homeowner tried to fight his non-judicial foreclosure in Colorado.
Each state differs in foreclosure requirements, but generally fit into two category: foreclosures that get to be decided by the courts or foreclosures that are not — a non-judicial foreclosure. Colorado is a non-judicial foreclosure state.
Homeowner Dennis Obduskey alleged that once he received a foreclosure notice from law firm McCarthy & Holthus, he invoked protection under the federal Fair Debt Collection Practices Act.
This act protects consumers and maintains that: “a ‘debt collector’ must ‘cease collection’ until it ‘obtains verification of the debt’ and mails a copy to the debtor,” the Supreme Court ruling states.
However, McCarthy & Holthus is not a debt collector by definition, as it only pursues non-judicial foreclosures, the Court ruled.