What is considered an illegal debt collection practice by a mortgage servicer?

Examples include misrepresenting the amount owed, contacting you at improper times or after being told to stop, threatening action the servicer can't legally take, and failing to properly credit payments received.

Can I countersue my lender inside the foreclosure case?

In many situations a servicer violation can be raised as a counterclaim within the pending foreclosure action rather than starting a separate lawsuit, though whether that's the right approach depends on the specifics of the case.

Do these claims cost money upfront if the attorney works on contingency?

Contingency arrangements generally mean the attorney is paid from a settlement or judgment rather than upfront fees, though case costs and fee structures vary by attorney and should be confirmed before signing an agreement.

What's the difference between a foreclosure defense and a servicer violation claim?

A foreclosure defense challenges the lender's right to foreclose in the current case, while a servicer violation claim targets separate misconduct, like mishandling your account or breaking collection rules, that may support a counterclaim or independent lawsuit.

Mortgage servicer abuse and debt collection violation claims during foreclosure

Foreclosure cases sometimes surface a second problem: the loan servicer or a debt collector working the file may have broken rules along the way. Federal servicing regulations under RESPA require servicers to properly evaluate a complete loss mitigation application before proceeding to sale, and the Fair Debt Collection Practices Act along with South Carolina's unfair trade practices law restrict harassment, misrepresentation, and certain collection tactics.

Violations that come up in practice include misapplied payments that created a false default, robo-signed or improperly executed documents used to establish standing to foreclose, refusal to process a complete modification application, and harassing or misleading communication from collection staff.

These claims can sometimes be raised as a counterclaim inside the existing foreclosure case, which can slow the case down or create settlement leverage, or pursued as a separate action. Which path makes sense depends on the timeline of the foreclosure and how strong the documentation of the violation is.

What it costs

Many servicer-violation and debt collection defense claims are taken on contingency or a hybrid fee arrangement, since the underlying statutes can allow a prevailing consumer to recover attorney fees. Cost still depends on how much documentation and investigation is needed to prove the violation occurred.

Top 3 by our score

Ranked from our published scoring of public Google reviews for consumer protection law.

1. Amy V. Cofield, Attorney at Law
4.9★ · 179 reviews

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2. Reed Law Firm, P.A.
5.0★ · 88 reviews

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3. Bernstein and Bernstein, LLC
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FAQ

What is considered an illegal debt collection practice by a mortgage servicer?: Examples include misrepresenting the amount owed, contacting you at improper times or after being told to stop, threatening action the servicer can't legally take, and failing to properly credit payments received.
Can I countersue my lender inside the foreclosure case?: In many situations a servicer violation can be raised as a counterclaim within the pending foreclosure action rather than starting a separate lawsuit, though whether that's the right approach depends on the specifics of the case.
Do these claims cost money upfront if the attorney works on contingency?: Contingency arrangements generally mean the attorney is paid from a settlement or judgment rather than upfront fees, though case costs and fee structures vary by attorney and should be confirmed before signing an agreement.
What's the difference between a foreclosure defense and a servicer violation claim?: A foreclosure defense challenges the lender's right to foreclose in the current case, while a servicer violation claim targets separate misconduct, like mishandling your account or breaking collection rules, that may support a counterclaim or independent lawsuit.

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