In Obduskey v. McCarthy & Holthus, LLP, the United States Supreme Court unanimously held the Fair Debt Collection Practices Act does not apply to a law firm conducting a nonjudicial foreclosure.

While the law firm prevailed in Obduskey, the Court’s opinion suggested several circumstances in which the law firm might have been subject to the FDCPA.  Practically speaking, many firms instituting nonjudicial foreclosures will likely remain subject to the FDCPA.

According to Obduskey, a law firm conducting nonjudicial foreclosures might still be subject to the FDCPA if:

  • The law firm has a regular debt collection practice above and beyond nonjudicial foreclosures, or if the firm otherwise engages in debt collection;
  • The law firm sends an unnecessary letter (or engages in other communications) that is not required by state law;
  • The foreclosure is a judicial foreclosure;
  • The law firm engages in unfair practices related to the nonjudicial foreclosure.

For a more in-depth analysis, please visit this article authored by Balch’s Charles Brumby.

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Photo of Gregory C. Cook Gregory C. Cook

Gregory is a partner in Balch & Bingham’s Birmingham office and serves as chair of the Financial Services Litigation Practice Group.  His practice centers on commercial litigation, with a concentration on complex litigation. Since joining Balch & Bingham LLP in 1991, Mr. Cook has focused his practice in the area of business and financial services litigation, including concentrating on class action defense (he has been involved in defending over 60 class actions). More recently, Mr. Cook has defended a number of actions and class actions arising out of the mortgage and subprime crisis, including matters for loan servicers, lenders, title insurance agents and settlement services providers. Mr. Cook is listed in Best Lawyers in commercial litigation, has been rated “AV” by Martindale Hubbell and was selected by Super Lawyers in Business Litigation.