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HOW MORTGAGE
STACKS UP
AGAINST OTHER
DEBT
Financial services debt was the largest
source of revenue for the debt collection
industry, according to the Consumer Financial
Protection Bureau's (CFPB's) annual report on
its administration of the Fair Debt Collection
Practices Act. e bureau said revenue from
financial services debt accounted for nearly
40% of debt collection revenue in 2018.
e CFPB noted that after several years
of growth, consumer debt surpassed its 2008
peak in 2017, rising to a new high of $13.54
trillion in the fourth quarter of 2018. However,
while mortgage debt increased, the growth in
consumer debt was mostly fueled by non-
housing debt such as credit cards and auto
loans.
e report revealed that the CFPB planned
to issue a notice of Proposed Rulemaking
relating to debt collections. It said the notice
would address issues such as communication
practices and consumer disclosures.
"e Bureau understands that the debt
collection industry, by and large, wants to
comply with consumer protection laws," said
Kathy Kraninger, Director of the CFPB,
in the report. "However, where there are
bad actors who violate the law, we will take
enforcement actions to protect consumers."
e report also highlighted some of the
lawsuits and amicus curiae briefs filed by the
CFPB and Federal Trade Commission to
address the debt collection practices in the
mortgage industry. ey included an amicus
brief on the Obduskey vs. McCarthy Holthus
case.
e amicus briefs also included one on the
deficiency judgment in judicial foreclosure in
the case of Cohen vs. Ditech Financial, LLC.
is brief addressed whether "the FDCPA
applies to judicial foreclosure proceedings
in state court where, under state law, the
debt collector is entitled to seek a deficiency
judgment against the consumer for the amount
of any mortgage debt remaining after the
foreclosure sale."
