Cohen v. Ditech Financial LLC
This case involves claims under the Fair Debt Collection Practices Act based on the alleged failure by debt collectors to accurately disclose the creditor of a mortgage loan in a judicial foreclosure proceeding in New York state court. The district court dismissed the case because it concluded that the FDCPA did not apply to equitable foreclosure proceedings. The Bureau filed an amicus brief arguing that the district court erred in dismissing the case. Specifically, the brief argued that, even if the court were to assume that the FDCPA did not apply to foreclosure proceedings in which the exclusive remedy was enforcement of the security interest on the property, the FDCPA still applies when the proceeding can result in a deficiency judgment against the consumer for any debt remaining after the foreclosure sale. The brief also argued that the FDCPA applied to the whole foreclosure proceeding even though a debt collector would not file a motion for a deficiency judgment until after the foreclosure sale occurs. Finally, the brief argued that the district court erred in concluding that the purported adequacy of state law consumer protections in foreclosure proceedings provided a basis for failing to apply the FDCPA in this case.