The Southern District of Florida refused to dismiss a real estate collection case against a management group and a mortgage trust on March 25.
U.S. District Judge Beth Bloom ruled on the case of Francisco and Sonny Roche against Rushmore Loan Management Services, LLC and Carlsbad Funding Mortgage Trust.
The plaintiffs accused the defendants of violating the Real Estate Settlement Procedures Act and the Fair Debt Collections Practices Act.
U.S. District Judge Beth Bloom
Count I claimed Rushmore violated section 2605(k) of RESPA. While the defendants challenged the allegation that Rushmore didn’t properly reply to the plaintiffs’ request for information (RFI), Judge Bloom suggested the defendants aren’t actually clear on the plaintiffs’ claim.
“Plaintiffs do not simply take issue with the amount stated in the payoff letter; instead, plaintiffs clearly allege that they believed many of the vague or estimated fees and costs included were erroneous,” Judge Bloom wrote. She added that these claims are actually enough to satisfy the assertion.
For Count II and Count III, allegations that Rushmore violated sections 1692f and 1692(a)(2) respectively, of the FDCPA also survived dismissal as Judge Bloom said Rushmore took action that equated attempts to collect a debt. One of the actions included a statement from Rushmore that it’s a “Debt Collector, who is attempting to collect a debt,” according to the opinion.
The remaining counts (violations of section 1692e of the FDCPA and section 559.72(9) were denied dismissal. That regulation stops a debt collector from issuing “false representation of the character, amount, or legal status of any debt,” according to the opinion. The plaintiffs properly claimed that the defendants violated these regulations.
For example, the plaintiffs accused Rushmore of inappropriately trying to collect the debt when it sent a payoff letter along with possible fees.
The Roches defaulted on their own after Sonny got extremely sick. They hired a lawyer to help them navigate through foreclosure proceedings and the loan was assigned to Rushmore, and Carlsbad was dubbed the owner of the loan even though it was in default. Rushmore sent the plaintiffs a Summary of Total Debt. But they kept calling and sending mortgage statements hoping to collect the debt, even though the couple had a lawyer. At the same time, Rushmore was allegedly ignoring the plaintiffs’ request for a full payment history and payoff letter.