This past September, a federal judge refused to dismiss an Oregon homeowner’s complaint that her mortgage servicer violated federal consumer protection laws.
The lawsuit claimed that a Nevada loan servicer, Madison Management Services, failed to respond to various requests for information and notices sent by Portland consumer Anna Nguyen.
Federal law generally requires mortgage companies to timely respond to requests for information and notices of servicing errors from consumers. Specifically, the Real Estate Settlement Procedures Act generally requires mortgage servicers to acknowledge receipt of consumer requests within 5 business days, and respond within certain time frames.
In Nguyen’s case, Oregon federal judge Anna Brown decided that new regulations passed after the subprime mortgage crisis gave borrowers the right to sue their mortgage companies for failing to comply with certain servicing laws.
Judge Brown also allowed Nguyen to sue Madison Management Services for failing to comply with the Truth in Lending Act based on its failure to send her mortgage statements and interest disclosures. Nguyen’s claim under the Fair Debt Collection Practices Act also survived dismissal based on the mortgage company’s failure to take certain actions required under federal law.
Nguyen’s claims under the Oregon UTPA were dismissed because her loan was obtained before 2010. The court is expected to set the case for a rule 16 conference in the coming weeks.
Michael Fuller is a partner at Olsen Daines and an adjunct professor of consumer law at Lewis & Clark Law School in Portland, Oregon.