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Case ID: 2722 | Credit / Debt | 09/01/2004
A class action has been filed against mortgage servicing company Fairbanks Capital Corporation on behalf of homeowners who allege that the company violated the federal Fair Debt Collection Practices Act (FDCPA) and the Illinois Consumer Fraud Act when it allegedly attempted to foreclose on non-delinquent loans and failed to disclose certain information required by the acts. The action seeks unspecified damages, and an order that will force Fairbanks to stop its allegedly predatory lending practices.
On November 13, 1997, Chad and Frances Schlosser obtained a $36,000 mortgage loan for personal, family or household purposes, namely refinancing of existing personal debts. The action alleges that Fairbanks acquired the Schlossers' mortgage when it purchased over 12,000 loans from now-defunct ContiMortgage. At the time the mortgage was transferred to Fairbanks in August 2000, the loan was paid up. Fairbanks decided otherwise, and sent them a demand letter on August 22, 2000. The letter was Fairbanks' first communication with the Schlossers. The August 22, 2000, demand letter allegedly did not comply with the debt verification provision of the FDCPA. Specifically, instead of informing the Schlossers that they could dispute their alleged default status by letter, in which case Fairbanks would be required to verify that they really were in default--and cease collection activities until that was done--the letter told them that they had to file an action in court if they wanted to contest the claim Fairbanks was making. According to the action, this (1) unfairly shifted the burden of determining the status of the debt from the collector to the consumer and (2) imposed a much more severe burden on the consumer--filing a court action as opposed to writing a letter--than the FDCPA intended. In addition, the letter allegedly did not state the amount of the debt, as required by the FDCPA. When the Schlossers attempted to pay Fairbanks their December mortgage payment, it was rejected because their account was in default according to the company. The letter returning their check stated: "Enclosed is your check in the amount of $344.00 which we cannot accept at this time. Your account is currently in default status and this payment was less than the full amount due. Please contact our office at 1-888-818-6032 for the amount to bring your loan current. . . . This letter is from a debt collector and is an attempt to collect a debt. Any information obtained will be used for that purpose." On December 14, 2000, a foreclosure action was commenced against the Schlossers by Fairbanks' parent company, Manufacturers & Traders Trust Company. In December 2000, the Schlossers faxed two letters to Fairbanks complaining that they were not in default. Nothing happened. In February 2001, the Schlossers faxed a letter to Fairbanks' foreclosure attorney again complaining that they were not in default. Apparently in response, on February 22, 2001, the foreclosure action was dismissed. The action was initially dismissed in the trial court, but was reinstated on appeal. At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Credit / Debt Cases of Interest A class action has been filed against lender MicroFinancial, Inc. (NYSE: MFI) and certain of its officers and directors by stockholders who purchased the company's common stock between February 5, 1999, and October 30, 2002. The stockholders seek to recover compensatory damages for the loss of value of their stock.
A class action lawsuit has been filed in the Eastern District Court of New York against Eckerd Corporation, a Florida based retailer, for violations of the Fair Debt Collection Practices Act. Class members seek injunctive and declaratory relief as well as damages, attorney's fees and costs. A statewide class action has been filed in Pennsylvania against Irv Borenstein, Esq. This action is brought on behalf of all Pennsylvania residents who, since December 5, 2002, have received a letter from Borenstein's law firm in an attempt to collect a debt. Consumers allege that certain language contained in the letters sent by Borenstein violate the federal Fair Debt Collection Practices Act and are seeking unspecified compensatory damages, statutory damages and injunctive and declaratory relief. California law requires that mortgage companies fully disclose all charges and fees related to the origination of a residential loan. On July 28, 2003, the court granted final approval to the parties' $12.6+ million settlement in a class action against AccuBanc Mortgage Corporation and National City Mortgage Company on behalf of all persons who paid document preparation, documentation or document processing fees, processing fees, administrative fees, underwriting fees or wire fees to either or both of the companies in connection with the origination of a residential mortgage in California between May 3, 1996, and April 21, 2003. If a telemarketer asks you for money up front, you should question the wisdom of paying. The Federal Trade Commission has reached a $3.9 million settlement with the Electronic Financial Group, Inc. on behalf of consumers who were taken advantage of by the defendants in advance-fee debit card marketing scams. Persons eligible to take part in the settlement should contact the FTC for more information. If you are having trouble paying all your bills, it might be best for you to consult a certified financial counselor before you make any decisions. A class action has been filed against Denver-based loan-buyout company EquityLink, LLC, on behalf of Colorado homeowners who allege that the company's "HomeSaver" program is actually deceptive and highly predatory, and violates state lending laws.
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