John Soumilas of Francis Mailman Soumilas. Courtesy photo Seventh Circuit Issues Seemingly Internally Inconsistent FCRA/FDCPA Decision
In its recent decision in Freeman v. Ocwen Loan Servicing, No. 23-2512, the U.S. Court of Appeals for the Seventh Circuit upheld a district court's dismissal of a borrower's Fair Credit Reporting Act (FCRA) and Fair Debt Collection Practices Act (FDCPA) claims arising out of her mortgage servicer's erroneous reporting that her mortgage was in default.
September 20, 2024 at 10:24 AM
9 minute read
In its recent decision in Freeman v. Ocwen Loan Servicing, No. 23-2512, the U.S. Court of Appeals for the Seventh Circuit upheld a district court's dismissal of a borrower's Fair Credit Reporting Act (FCRA) and Fair Debt Collection Practices Act (FDCPA) claims arising out of her mortgage servicer's erroneous reporting that her mortgage was in default. In doing so, the court issued a concerning and seemingly internally inconsistent decision.
A Mortgage Servicer's Mistake Causes Significant Problems
Demona Freeman secured a loan to purchase her home. The loan was assigned to the Bank of New York Mellon and serviced by Ocwen Loan Servicing. After Freeman fell behind on her mortgage payments, BNY Mellon filed a foreclosure action against her. Freeman subsequently filed for bankruptcy and later made all the payments necessary to secure an order of discharge in the bankruptcy.
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