Foreclosures Not Covered By Debt Collection Law, Feds Say

Law firms and other creditors seeking to foreclose on homes outside of court proceedings are not debt collectors under federal law, the Justice Department and Consumer Financial Protection Bureau told the U.S. Supreme Court.

Creditors seeking to foreclose properties in nonjudicial proceedings are seeking to collect on a security interest in a property, meaning that they are not considered to be debt collectors under the Fair Debt Collection Practices Act, the government said in a brief filed Nov. 15.

Because of that, the U.S. Court of Appeals for the 10th Circuit ruled correctly in a Colorado case, Obduskey v. McCarthy ...