Obduskey v. McCarthy & Holthus LLP

The case asked whether a law firm that only carries out nonjudicial foreclosures counts as a "debt collector" under the Fair Debt Collection Practices Act. The Supreme Court said businesses doing no more than nonjudicial foreclosure work generally are not covered as debt collectors, except for the Act's limited rule in 15 U.S.C. § 1692f(6).

This narrows how the federal debt collection law applies in foreclosure cases. For example, a homeowner facing a nonjudicial foreclosure may not be able to use most FDCPA protections against a firm doing only that foreclosure work.

The Court has finished this case. The decision sets the rule for similar disputes about nonjudicial foreclosure activity under the FDCPA.

The dispute was whether a law firm handling only a nonjudicial foreclosure should be treated as a debt collector under the FDCPA. The Court said generally no, except for one limited FDCPA rule.

Homeowners, foreclosure law firms, and mortgage companies are directly affected. The decision limits when most FDCPA protections apply during a nonjudicial foreclosure process.

The Supreme Court's work on this case is over. Lower courts and foreclosure businesses must apply this rule in future FDCPA disputes involving nonjudicial foreclosures.