DS News

86 Florida Minority Certified Business MIAMI-DADE & BROWARD COUNTIES 786-499-6994 www.REOPitStop.com Luis@ContinentalRealtors.com RESNET ID: 106089 | Equator ID: 272261 Luis F. Guzman Broker/Owner GEORGIA District Court Dismisses CFPB Enforcement Claims By Douglas Sullivan In a stunning decision under the Federal Rules of Civil Procedure governing discovery, the U.S. District Court for the Northern Dis- trict of Georgia dismissed enforcement claims filed by the Consumer Financial Protection Bu- reau (CFPB) against several entities accused of committing fraudulent debt collection activities. In Consumer Financial Protection Bureau v. Universal Debt Solutions, LLC, various defendants filed motions for sanctions under applicable federal rules based upon the conduct of CFPB during discovery. In the opinion, the Court ultimately dismissed six defendants from the action. In order to prepare their defense, various defendants sought discovery from CFPB, including testimony at oral depositions. Upon receiving notice of the deposition, the CFPB claimed that information was already provided in discovery and that the requests were protected by the law enforcement and deliberative process privilege. Despite Court orders permitting inquiry into certain areas, the CFPB refused to offer meaningful information outside of what was already provided, drafted a "memory aid" for witnesses to recite, and interposed repeated objections to questions based claims of informa- tion being privileged. Even with Court orders, conference calls, and explanations regarding what is and is not privileged, the CFPB still refused to provide adequate responses. In a powerfully stated conclusion, the Court explained that it: "finds that the CFPB willfully violated the Court's repeated instruc- tions to identify for Defendants the factual bases for its claims and that, in each deposition, it willfully failed to present a knowledge- able 30(b)(6) witness. In light of the CFPB's pattern of conduct in this case, the Court is not optimistic that reopening the deposi- tions would be fruitful. at is especially true given the CFPB's continued use of privilege objections in response to questions that the Court expressly identified as permissible. us, Defendants' motions for Rule 37 sanctions . . . are all GRANTED." e decision is a guide as to how parties in enforcement actions may use the discovery pro- cess to learn the facts underlying the lawsuit, as well as a good lesson in what can happen when the discovery process is abused. Douglas H. Sullivan is an associate attorney at Hladik, Onorato & Federman, LLP in the firm's North Wales, Pennsylvania headquar- ters. Sullivan focuses on default services litiga- tion, foreclosures, and ejectments, in addition to a criminal law practice. LOUISIANA OIG: NOLA Mismanaged HUD Funds HUD's Office of Inspector General (OIG) released the results of its audit of the City of New Orleans' HOME Investment Partnerships pro- gram, revealing that the city failed to protect more than $7.5 million in HOME funds disbursed. e Inspector General's investigation of the low-income housing program was launched in response to a "citizen complaint." According to the audit report, the complaint had merit, as New Orleans did not properly monitor or administer its HOME program. e OIG discovered that for the 13 projects investigated, the city "did not ensure that four projects had regulatory agreements, preventing the city from enforcing the affordability and other program requirements." As for the remaining nine projects, the city failed to confirm that rents remained within rent limits, it performed initial tenant income eligibility certifications, and it conducted prop- erty inspections and onsite monitoring visits, according to the audit. In addition, the audit noted that the city did not track or accurately report unit vacan- cies and properly report and use its program income. ese conditions occurred because New Orleans did not, "follow the program requirements, lacked supervisory management of staff, did not have adequate written policies and procedures, and had poor record-keeping practices." is mismanagement of funds has caused the city to fail to: detect $82,800 in rent over- payments; ensure that affordable housing was available and offered to low-income house- holds; and ensure that programs participants lived in decent, safe, and sanitary housing, according to the report. e OIG recommends that HUD's Direc- tor of the New Orleans Office of Community Planning and Development require the city to repay more than $1.8 million, support or repay more than $5.8 million, and revise its written procedures and management controls. MCS Celebrates 5-Year Anniversary Mortgage Contracting Services, LLC (MCS) a nationwide company mortgage servicing company, is celebrating the five-year anniversary of the company's Ruston, Louisi- ana, office. "Our Ruston location has thrived over the last five years," said Caroline Reaves, CEO of MCS, which in addition to Ruston, has offices in Lewisville, Texas, and Tampa, Florida, "Our initial five-year hiring goal for this office was 90 employees, and I'm proud that we surpassed that goal, and we are so appreciative of the sup- port that Ruston has given us." In 2012, MCS's Ruston office had 18 employees. Since then, it has grown to more than 120 full-time employees, including 19 in key leadership positions. Since 2012, MCS has also doubled the size of its facilities, which now measure 20,000-square-feet. e company attributes the success of the Louisiana office to a positive company culture and access to well-educated employees from local colleges. "We are a service-focused company, so investing in our talent has been critical to our success," said Chad Mosley, COO of MCS' Solutions Division. "e outstanding service our Ruston employees provide differentiates us from competitors. We are excited to continue to build upon this momentum over the next five years." According to a September 2017 report by the Louisiana Housing Corporation (LHC), its board of directors awarded more than $11 million in housing tax credits and other funds for the construction and rehabilitation of 21 affordable housing developments. KNOW THIS

• Cover