The Newest Wrinkle in Short Sales: Fair Debt Collection Practices Violations

Are short sale banks violating Fair Debt Collection Practices Act? In America, we have federal law and, in many states, state fair debt collection practices rules. These laws govern who can attempt to collect a debt and how they can do it. For example, borrowers have the right to tell a collection company in writing to stop contacting them because they have no intention of paying a debt. It's not like banks don't know about the Fair Debt Collection Practices Act as I'm fairly certain this is intimate knowledge to them. Yet, some collection attempts by short sale banks are most likely violating laws.

Citimortgage (now One Main Financial) and Greentree are two such banks that have been calling short sale agents. Perhaps by the time you finish reading this, maybe more agents will step forward to identify other such instances. Those banks have even called this agent with collection attempts. I suspect they figure this Sacramento short sale agent might tell borrowers to stop making mortgage payments, which I would never do. Borrowers have their own reasons and often stop making mortgage payments based on their lawyer's advice. Or, maybe they figure I'm just one more person to add to their harassment list.

And harass, they do. One of my sellers told me last night that Bank of America collections called him more than 12 times one day. At work, no less. Collection agents are horrible horrible individuals, and I don't apologize for saying that. I cannot imagine any person being so desperate for a job that they would deliberately seek out work as a collection agent. It seems like such a despicable job to me. Des-PIC-able, like Daffy Duck would say.

Both Citimortgae and Greentree have threatened short sale sellers, saying their short sale would not be approved if they didn't make a payment. They are not supposed to lie. And that is a flat-out lie. They have also called me. One of them was quite pushy the other day. I'm not even sure she was the actual negotiator. I suspect not since a negotiator has not yet been assigned. She left a message on my voice mail, sounded like Lily Tomlin doing her ringy-dingy telephone operator impression.

Another called to say that Citimortgage has received all of the documentation for the short sale, and the file was moving forward. Then, she insisted I contact the seller and demand that the seller make a payment. I could not believe my ears. She began to harass. She said the seller can certainly afford to pay $241 a month when the seller is earning XYZ per month, yada, yada. Oops, I had to go. See ya.

Is there no level so low they will not stoop? I guess I will redo my third-party authorization to include a statement that says no conversations to collect a debt are permitted. These attempts are probably against the Fair Collection Debt Practices law anyway as those snakes tend to wriggle along a slimy line. I will report violators. I think it's my civil duty to do so.

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Certified HAFA Specialist

 

My Sacramento Real Estate Listings

Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.

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