Court of Appeal (Cal.) Says Borrower Stated FDCPA Claim Against Mortgage Servicer Where Debt Already Was In Default at the Time of Assignment

Here, the complaint alleged Ditech “collects debts, either on behalf of itself or others, in the regular and ordinary course of business.” The complaint also alleged Ditech began servicing Randall’s mortgage loan after the loan was in default. The complaint, therefore, adequately alleged Ditech was a debt collector for purposes of section 1692f(1).  The complaint further alleged Ditech engaged in three types of unlawful debt collection activity. Specifically, Ditech failed to halt nonjudicial foreclosure activity after Randall paid to reinstate his loan, Ditech required Randall to pay a reinstatement amount that was inconsistent with the amount of the payments Randall had missed and included improper fees and charges, and Ditech continued to charge Randall default fees and costs after Randall reinstated his loan.   A “ ‘debt’ “ for purposes of section 1692f(1) is an obligation of a consumer to pay money. (§ 1692a(5); Vien-Phuong Thi Ho v. ReconTrust Company, NA (9th Cir. 2017) 858 F.3d 568, 572.) “[T]he object of non-judicial foreclosure is to retake and resell the security, not to collect money from the borrower.” (Ho, supra, at p. 571.) “Thus, actions taken to facilitate a non-judicial foreclosure, such as sending the notice of default and notice of sale, are not attempts to collect ‘debt’ “ and are not actionable under section 1692f(1). (Ho, supra, at p. 572; Dowers v. Nationstar Mortgage, LLC (9th Cir. 2017) 852 F.3d 964, 969–970 (Dowers).)  However, overcharging Randall to reinstate his loan and charging default fees and costs for a loan that is not in default are attempts to collect money and, consequently, are actionable under section 1692f(1). Although Ditech asserts Randall’s allegations on these points were not sufficiently specific, the particularity required of a pleading varies given the parties’ relative knowledge of the facts in issue. (Semole v. Sansoucie (1972) 28 Cal.App.3d 714, 719.) “[L]ess particularity is required where the defendant may be assumed to possess knowledge of the facts at least equal, if not superior, to that possessed by the plaintiff.” (Burks v. Poppy Construction Co. (1962) 57 Cal.2d 463, 474.) Ultimately, the complaint is sufficient if “ ‘the adversary has been fairly apprised of the factual basis of the claim against him.’ “ (Semole, supra, at p. 721, quoting Jones v. Oxnard School Dist. (1969) 270 Cal.App.2d 587, 593.) Ditech is in at least as good a position as Randall to know how much Ditech charged him to reinstate his loan, how much Ditech charged him between when he reinstated his loan and when Ditech rescinded the notice of default, and the bases for the charges. Accordingly, we conclude Randall sufficiently pleaded an FDCPA cause of action for violation of section 1692f(1), and the court erred in sustaining Ditech’s demurrer to the cause of action.  For the first time on appeal, Randall contends he can amend his complaint to also state an actionable claim under section 1692f(6) of the FDCPA for Ditech’s nonjudicial foreclosure activity. Section 1692f prohibits “[t]aking or threatening to take any nonjudicial action to effect dispossession or displacement of property” when the debt collector has no intention of taking possession of the property, or holds “no present right to possession of the property claimed as collateral through an enforceable security interest.” Mortgage loan servicers, as enforcers of security interests, fall within the definition of “ ‘debt collectors’ “ for the purposes of section 1692f(6). (Dowers, supra, 852 F.3d at p. 969; see § 1692(a)(6) [authorizing the application of § 1692(f)(6) to “any business the principal purpose of which is the enforcement of security interests”].) Since Randall has demonstrated he can allege Ditech refused to halt its nonjudicial foreclosure activity until well after he reinstated his loan and then only after he filed the instant action, he has demonstrated he can amend his complaint to state an actionable claim under section 1692f(6) and the court should permit him an opportunity to do so.