b'Zachary J. Fiene, Esq. T. Robert Finlay, Esq.Wright, Finlay & Zak, LLP Wright, Finlay & Zak, LLPAm I a Debt Buyer?Understanding the New Wave of Debt Buyer Statutes and Their Impact on Servicing Non-Performing Mortgage DebtT he financial goal of every debt buyerconsumer debt incidental to the purchaseCal. Civ. Code 1788.58: a template for is uniformmaximize your returnof a portfolio predominantly consisting ofThis section creates on investment.As the debt buyingconsumer debt that has not been chargedwhat must be included in the creditors marketplace expands, states are enactingoff.Charged-off consumer debt meanscomplaint.laws to regulate the industry and protecta consumer debt that has been removed consumers.The only thing more damagingfrom a creditors books as an asset andCal. Civ. Code 1788.60:to your bottom line than a poorer thantreated as a loss or expense. This section is a roadmap for how and expected return on a purchased debt iswhen you can default the borrower when finding yourself in a lawsuit where yourThis new law sets new requirements to bethey fail to respond to your lawsuit.exposure is in the tens of thousands ofmindful of when attempting collection on dollars because you unknowingly violateda charged-off loan. Cal. Civ. Code 1788.61:a new state law.California and Texas areThis section gives borrowers who are two states who have recently passedCal. Civ. Code 1788.52: defaulted, fairly wide latitude to seek debt buyer statutes aimed at companiesThis section fairly painstaking tellsto set aside default judgments.purchasing charged-off debt on theyou what must be included in your secondary market.This article explorescommunication with the borrower andCal. Civ. Code 1788.62:the impact of those laws on debt buyers,should be followed to the letter. This section lays out all the different the potential applicability to residentialcategories of damages a borrower mortgage debt and things to be on theCal. Civ. Code 1788.54:might sue for violations of the foregoing lookout for. This section ensures if you reach asections.settlement or workout with the borrower California Fair Debtthat it is reduced to writing and if theyAt this point, there does not appear to be Buyers Practices Act: make payments under that agreement,clear guidance on whether the California On January 1, 2014, Californias Fair Debtthat within 30 days of receipt, they mustlaw will apply to mortgage loans.The laws Buying Practices Act (FDBPA), Civil Codebe sent a statement that shows theitself doesnt purport to but is essentially1788.50, et seq. took effect.Under thisamount paid, remaining balance, amongsilent.Because the laws is relatively new, law, debt buyer means a person or entityother things. there are no appellate level cases that that is regularly engaged in the business ofhave evaluated the issue yet, but the purchasing charged-off consumer debt forCal. Civ. Code 1788.56: expectation is that before long, someone collection purposes, whether it collects theThis section states that you cannot sue awill challenge it and an appellate Court debt itself, hires a third party for collection,borrower if the statute of limitations haswill come down with a decision.The or hires an attorney-at-law for collectionexpired.If you do, the section gives theconservative approach is to make sure you litigation.Debt buyer does not mean aborrower the right to recover damages, person or entity that acquires a charged-offas discussed more below. continued on page 14Spring 2021 Page 13'