FDCPA and RESPA: District Court Dismisses Claims Against Banks

A United States District Court has dismissed both FDCPA and RESPA claims brought against a bank and its servicer.  In Fleming v. U.S. Bank, C.A. No. 14-3446 (D. Minn. Feb. 6, 2015), the consumers sent the servicer a Qualified Written Request which the servicer timely responded to.  The Flemings eventually defaulted on the mortgage and the bank commenced foreclosure proceedings.  The Flemings filed suit asserting violations of both the FDCPA and RESPA.

Regarding the FDCPA claim, the plaintiffs argued that defendants violated the FDCPA by attempting to foreclose on the property and engaging in conduct that was unfair and deceptive in its efforts to foreclose.  The defendants argued that they were exempt from the FDCPA because foreclosure activities undertaken by mortgagors and mortgage servicing companies are not debt collection under the FDCPA. While noting a split in the circuits (the Fourth and Sixth Circuit have held that foreclosure is debt collection), the court concurred with the defendants, holding that foreclosure activities do not constitute debt collection under the FDCPA.

The court also dismissed the RESPA claim.  Under RESPA, servicers are required to provide a written response to a Qualified Written Request within 30 days of receipt.  The court determined that the QWR served by the Flemings was not proper and even assuming for the sake of argument that the QWR was proper, the servicer had adequately responded to the same.  Moreover, the court determined that the plaintiffs failed to properly plead the RESPA claim because they failed to allege that they suffered some actual damage as a result of the alleged violation.  The court noted that “[A] RESPA plaintiff must plead and prove, as an element of the claim, that he or she suffered some actual damage as a result of the alleged RESPA violation.  In the case of the Flemings, they only sought damages “if any be proven”, thus failing to properly allege harm.