Federal Court Finds | Key Points

The Northern District of Indiana recently dismissed a lawsuit against a mortgagee/servicer (“Newrez”) finding three letters sent by Newrez, a debt collector, regarding lender-placed insurance did not constitute “communication…‘made in connection with the collection of any debt’” under § 1692 of the Fair Debt Collection Practices Actⁱ. Mohr v. Newrez, LLC, No. 2:19 CV 150, 2020 WL 1452094, at *3 (N.D. Ind. Mar. 25, 2020).

The Court concluded the letters (1) did not contain “an explicit demand for payment…[but rather]…encouraged plaintiff to purchase his own insurance” and (2) served the purpose of complying with federal regulations rather than collecting a debt. Even considering prior litigation between the parties and the lender/mortgagor relationship, the Court concluded, considering the circumstances as a whole, the letters “were merely informational notices” which explained “plaintiff’s options.”

Newrez’s success at the early pleading phases of debtor-initiated litigation will prove useful in resolving FDCPA claims prior to costly substantive litigation and time-consuming discovery.