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January 28, 2019

Lenders, Law Firms Brace For Foreclosure High Court Ruling

By John T. Baxter

Law 360

The United States Supreme Court heard oral argument in the case Obduskey v. McCarthy & Holthus LLP on Jan. 7, 2019. The court’s ruling in this case could have major implications for all organizations — including law firms — that utilize the nonjudicial foreclosure process regarding defaulted mortgages.

The primary question in Obduskey is whether the Fair Debt Collection Practices Act, or the FDCPA, applies to nonjudicial foreclosures. There is currently a circuit split on this question: The U.S. Court of Appeals for the Fourth, Fifth and Sixth Circuits apply the FDCPA to nonjudicial foreclosures, while the Ninth and Tenth Circuits have held that the FDCPA does not apply to nonjudicial foreclosures. The Obduskey decision should resolve this split.

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