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Matthew Hector
Works at Sulaiman Law Group, Ltd.
Attended The University of Alabama
Lives in Naperville, IL
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The Consumer Financial Protection Bureau has issued a Request for Comments regarding debt collection practices. I will be submitting my own comments, in particular with regard to the practice of trying to collect debts that are past the statute of limitations. 

In many situations, people are unaware that simply agreeing to make a payment on a debt can restart the statute of limitations. Debt collectors that try to collect on unsuspecting consumers are not disclosing this fact before soliciting payments. 

In the immortal words of Admiral Ackbar, "It's a trap!" 

#debtcollection #CFPB #statuteoflimitations
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If you hadn't already heard, HAMP was extended for two more years. It turns out, however, that loan modifications have a startlingly high re-default rate. I'm guessing that if we parsed the data further, we would find that re-defaulting loan mods tend to lack a principal reduction component. 
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So there's a bill pending in the House that would amend the Fair Debt Collection Practices Act to prohibit lawsuits on debts that are past the statute of limitations. It would also require debt collectors to disclose specific things about expired debts to consumers when sending collection letters. 

The disclosures are good—they are designed to inform consumers that the debt is expired and that paying on it could revive the debt. Here's the thing: a similar bill died in committee in 2011.

That aside, it seems much easier to prohibit any collection activity on a debt that is past the statute of limitations. Maybe there's a First Amendment issue there, but we have laws against making fraudulent statements, so this isn't that outside the boundaries of permissible limits. 

#FDCPA   #debtcollection   #HR3402
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The FDCPA can apply to residential real estate issues, but you have to be careful to identify whether the bank/servicer is a "debt collector" under the Act. 

In general, if the servicer is the original lender, then the Act does not apply. If the servicer acquired the loan while it was current, then the Act does not apply. 

This specific amendment will likely have very little effect on mortgage loan servicers simply because there really isn't a statute of limitations on a mortgage loan while it is within the loan term. 

On the other hand, if the holder of a deficiency judgment waits too long to enforce the judgment, then this proposed amendment would severely limit the servicer's ability to collect on that debt. Assuming, of course, that the definition of 'debt collector" is satisfied first. 
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I've decided to take the work blog a bit further into opinion land. Sometimes, it's really difficult to write objectively when the truth has a decidedly anti-banking bias.
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Matthew Hector

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My first interview as an expert on robosigning. We did it in one take, so either I was awesome or so awful that they wanted to get me out of there ASAP. I'm hoping it was some shade of the former.
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I know you are just that awesome! One-take Hector. That's you!
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Have him in circles
52 people
Jason Ian Hector's profile photo
Joe Hardwick's profile photo
Christina Zaboura's profile photo
Ramsey Metcalf's profile photo
Peter Dalinis's profile photo
Chris Seale's profile photo
David Sorkin's profile photo
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Attorney
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  • Sulaiman Law Group, Ltd.
    Attorney, present
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Currently
Naperville, IL
Previously
Aurora, IL - Chicago, IL - Tuscaloosa, AL - Seattle, Wa - Birmingham, AL - Lakeville, MN
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Yes, that's me in a suit.
Introduction
Formerly technicolor dreamcoat hair? Check. Spelled my first name with an extraneous "H?" Check. Brewer of tasty libations? Yep. Should get back to writing? Fo'sho. 

Currently: A consumer defense attorney who wishes he could just telecommute via the VPN and perhaps a Basecamp setup that nobody else would use. 

Long term: Let me teach legal writing, and you'll ultimately want me on a tenure track. 
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Tour de Farms rider, Proud Father, Punker Than Thou, Rocking That Suit
Education
  • The University of Alabama
  • The John Marshall Law School
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CmdrSlack