Do attorneys who carry out nonjudicial foreclosures meet the definition of “debt collectors” under the Fair Debt Collection Practices Act? The courts of appeals for the 4th, 5th and 6th circuits and the Colorado Supreme Court believe so. But the 9th and 10th circuits have said no. So the U.S. Supreme Court has taken up the question in Obduskey v. McCarthy Holthus LLP, and heard oral arguments Jan. 7 in the Colorado-based case that came to the court from the 10th Circuit.
Wells Fargo purchased the servicing rights to a mortgage Magnus Financial Corporation held for Dennis Obduskey’s home. Obduskey defaulted on the loan, and Wells Fargo’s counsel McCarthy Holthus initiated a nonjudicial foreclosure.
Obduskey received a notice from McCarthy in 2014. The notice had provisions similar to those sent by collectors that do fall under the FDCPA’s definition of a debt collector, such as Wells Fargo’s intent for a nonjudicial foreclosure and a statement that McCarthy may be a debt collector attempting to collect. But absent from the notice was any demand for Obduskey to actually make any payments on the debt.