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A consumer has filed a debt collection lawsuit against Nationstar Mortgage, alleging that the company has violated federal debt collection laws, specifically the Fair Debt Collection Practices Act, or FDCPA.
According to his FDCPA lawsuit, plaintiff Armando Diaz has suffered debt collector harassment over a debt he has no knowledge of. According to his debt collection lawsuit, Diaz received notice of the alleged debt in July.
According to a notice from Nationstar, Diaz had a debt with them. In response, he sent a document called a Notice of Validation of Debt. Under the FDCPA, if an alleged debtor files a Notice of Validation of Debt, debt collectors are required to prove that a debt is in fact owed. According to the FDCPA lawsuit, Nationstar never responded to the Notice of Validation of Debt.
Several weeks after receiving the notice, Diaz pulled up his credit report from all three national credit reporting bureaus, all of which reported that Nationstar had reported this alleged debt. Under the FDCPA, it is illegal to falsely report a debt.
Under the FDCPA, a consumer can file a lawsuit like Diaz’s if they believe they are suffering debt collector harassment. This can include “phantom debts” like Diaz’s, wherein the debt is assigned to him in error.
However, even legitimate debts still fall under the rules of the FDCPA. For example, the federal law restricts third parties that can be informed of a debt, and the tactics debt collectors may use in order to collect on debts.
Under the law, consumers can file a debt collection lawsuit as a means of enforcement. Under the law, a consumer may be awarded $1,000 in statutory damages. The FDCPA also allows consumers to collect attorney fees for the process of legal action over alleged FDCPA violations.
The specifics of FDCPA violations vary wildly. This can include conduct on the part of a debt collector.
For example, a debt collector can only contact consumers between 8 a.m. and 9 p.m. local time. Additionally, the debt collector must stop communicating with the consumer if the consumer asks — with exceptions like informing the consumer that legal action is being initiated over the debt.
Even profane language is forbidden conduct by debt collectors. Additionally, debt collectors are required to identify themselves in every communication. Also, as has been a point of contention in Diaz’s lawsuit, they are required to provide validation of the debt if requested properly.
Enforcement is divided by lawsuits like Diaz’s FDCPA lawsuit and federal agencies. Originally, the Federal Trade Commission handles FDCPA violations, but the new Consumer Financial Protection Bureau may also handle such violations, depending on current reforms.
The Unfair Debt Collection Lawsuit is Armando Diaz v. Nationstar Mortgage LLC, Case No. 6:14-cv-1470-ORL-37-DAB, in the U.S. District Court for the District of Florida, Orlando Division.
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2 thoughts onNationstar Hit With Debt Collection Lawsuit Filed Over ‘Phantom Debt’
NationStar Mortgage is by far the worst mistake that Fannie Mae ever made by partnering with them as a debt collector! I had a direct conversation with Fannie Mae on the many fraudulent transactions and basic all out lies that NationStar has told me, from the very first day they acquired my loan from Aurora. And The Fannie Mae rep, that I talked with ,stated that the government is highly upset at the massive and overwhelming number of complaints it has received about NationStar, and still receiving, over the dishonest business practices they are applying to the homeowners loans they now oversee. Plus the growing number of lawsuits and class action suits being filed seeking relief. Plus: on 9/1/2015 NationStar filed for a name change! NationStar will start using their new name after the 1st of the year in 2016 to MR. COOPER MORTGAGE! This will be their first attempt to try to leave their very bad company reputation behind and new borrowers or customers might not connect the two names. 2nd reason : it will slow any legal suits or actions to a crawl. It could technically cause all the many suits in every region across the United States; having to be refilled with a name update , adding months even years to existing suits. It’s a legal loophole that only benefits Nationsrar and hurts petitioners. Last but not least the Fannie Mae rep. said it is an enormous amount of red tape and bureaucratic congressional nightmare to get NationStar removed as the debt collector for Fannie Mae. We all know too well how slow and uncaring our representatives are when it comes to the public getting assistance like ( Removing NationStar and have a new debt service rep take over the millions of loans). And all this came from an actual Fannie Mae employee!!!
Is getting notices of collections from them months after they sold my home (when it was under modification review with underwriter: without serving me or notifying me) is that consider a “phantom Debt?