A homeowner sought to sue a home loan servicing company, BAC, as well as a co-defendant, alleging that they violated three sections of the Fair Debt Collections Practice Act (FDCPA) according to the October 7, 2014 issue of the New York Law Journal. The FDCPA is a federal law that governs what debt collectors may do. It states what legal actions they may take and how they are allowed to contact debtors. If a company, including a loan servicing company, violates the FDCPA, then the person whose financial and legal rights were violated may sue the offending company. If they receive a settlement, then it often includes special compensation and even payment of legal fees.

The homeowner claimed that BAC had no legal right to start a foreclosure action in court. Additionally, BAC merged with Bank of America. After the merger, the entity managing this loan became Bank of America, but neither bank informed the foreclosure court that there was a change in who would be servicing the loan. These two allegations were breaches in protections afforded to consumers by the FDCPA.

These two claims were dismissed by the court, however. The homeowner did not file a complaint with the court in time. The court may only take action against a loan servicer over these specific violations if the complaint is filed within one year of the alleged violation. Even though the foreclosure was still pending, the court filings were not “timely.”

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