CFPB Warns Debt Collectors on Time-Barred ‘Zombie’ Mortgages (1)

The Consumer Financial Protection Bureau warned debt collectors to avoid bringing foreclosure lawsuits that violate state statute of limitation laws on “zombie” mortgages.

The so-called zombie second mortgages, a relic of pre-2008 financial crisis predatory mortgage lending practices that targeted low-income and Black and Latino borrowers, are covered by the Fair Debt Collection Practices Act, the CFPB said in a Wednesday advisory opinion.

Any debt collector using threats of foreclosure or other tactics to collect on those home loans are subject to the law and could face CFPB enforcement actions or lawsuits from consumers or state attorneys general if ...