The Consumer Financial Protection Bureau issued guidance on debt collectors threatening to foreclose on homes with mortgages past the statute of limitations.
Details: The advisory opinion clarifies that a covered debt collector that brings or threatens to bring a state court foreclosure action to collect a time-barred mortgage debt may violate the Fair Debt Collection Practices Act and its implementing regulation.
Background: The CFPB said it released the advisory opinion because debt collectors are attempting to foreclose on silent second mortgages, or “zombie mortgages,” that consumers thought were satisfied long ago and that may be unenforceable in court.
