Consumer Finance Litigation

In Green v. Specialized Loan Servicing, LLC, 17-15681, the Eleventh Circuit Court of Appeals rejected a consumers contention that his monthly mortgage statement should only seek his last five years of mortgage installments due to Florida’s five-year statute of limitations for mortgage foreclosure. The consumer sued his mortgage servicer under the federal Fair Debt Collection Practices Act (“FDCPA”) 15 USC 1692 alleging his mortgage statements were not only an attempt to collect a debt but also were deceptive because they sought debt that the consumer alleged was time-barred.

The Eleventh Circuit found multiple problems with the debtors claim and affirmed the dismissal of his complaint by the district court.

First, the Eleventh Circuit found that a monthly mortgage statement, which is required by the Truth in Lending Act (“TILA”), 15 USC 1637(b) is not “an attempt to collect a debt” covered by the FDCPA.  Specifically, the Court held:

“We find nothing in the language in question from the Mortgage Statement, beyond what is required by TILA, which rises to the level of being unlawful debt collection language. Green argues that SLS should have reduced the total amount due shown on the statement because it “cannot be helpful information” to include the amounts of payments due beyond five years prior. But the TILA regulations, in fact, require that the statement include delinquency information, including the “length of the consumer’s delinquency.”

Next, the Eleventh Circuit found that the consumer’s claim that the amount of his indebtedness had been reduced by the supposed expiration of the statute of limitations to be completely without merit.  Relying on the Florida Supreme Court’s opinion in Bartram v. U.S. Bank, N.A., 211 SO. 3d 1009 (Fla. 2016) the Eleventh Circuit held that not only had the statute of limitations not expired on his mortgage but that since the debt could still be accelerated his “entire debt” including installment payments that first became due over five years ago could still be recovered in a re-filing foreclosure action. Consequently, the Court held that:

“In compliance with the mortgage and note, based on a July 1, 2010, default by Green, SLS accelerated the debt on June 30, 2015, and the entire outstanding amount of the loan ‘came due’ on that date. It was only then that the statute of limitations period began to run for the full accelerated amount due. Thus, the foreclosure action in June 2015 was timely, and SLS did not improperly seek any payment on the note by filing that action. The district court correctly determined that Florida’s statute of limitations ‘does not reduce the amount that a mortgagee can recover’ in this situation.”

The only issue remaining in the consumer’s appeal was his claim that his loan servicer had improperly demanded recovery of attorney’s fees through a demand letter and the filing of a complaint.  The Eleventh Circuit rejected this claim due to the statute of limitations for claims under the FDCPA (the consumer had waited over a year after the allegedly offending letter to bring his claims) and because requesting the court to award attorney’s fees did not constitute a debt collection insofar as the complaint simply requested the court determine what fees, if any, the consumer should owe.

The Green opinion is of particular import for its carve out for mortgage statements from the definition of debt collection. This holding is useful in a variety of circumstances, but it should be noted that the Eleventh Circuit recognized an exception “that a monthly statement that is in conformity with TILA may nevertheless include additional language that constitutes debt collection.” Thus, lenders and loan servicers would do well to hew closely to the requirements of TILA when crafting mortgage statements so as to ensure that they are not misconstrued as debt collection activity.