Oregon mortgage lawsuit: Portland homeowner wins round one

An Oregon mortgage lawsuit largely survived a motion to dismiss, based on a recent ruling by judge Anna Brown.

The Oregon mortgage lawsuit claims that loan servicer Madison Management Services failed to respond to various requests for information sent by Portland consumer Anna Nguyen.

Read the complaint and full court opinion.

Oregon Mortgage Lawsuit under the RESPA

Federal law requires mortgage companies to respond to requests for information and notices of servicing errors. The Real Estate Settlement Procedures Act requires mortgage servicers to acknowledge receipt of consumer requests within 5 days, and respond within certain time frames.

In Nguyen’s case, Oregon federal judge Anna Brown decided that new regulations passed after the subprime mortgage crisis give borrowers the right to sue mortgage companies for failing to comply.

Judge Brown also allowed Nguyen to sue Madison Management Services for failing to comply with the Truth in Lending Act. Nguyen’s TILA claims are based on the mortgage company’s failure to send her mortgage statements and interest disclosures. Regulation Z requires servicers of adjustable-rate mortgages “to provide borrowers with disclosures in connection with the adjustment of interest rates–.”

Oregon Mortgage Lawsuit under the FDCPA

Nguyen’s claim under the Fair Debt Collection Practices Act also survived dismissal. Her FDCPA claim is based on the mortgage company’s failure to take certain actions required under federal law. The FDCPA prohibits any conduct that would harass, oppress, or abuse any person in connection with the collection of a debt.

Nguyen’s claims under the Oregon UTPA were dismissed because her loan was obtained before 2010. The court is expected to set the case for a rule 16 conference in the coming weeks.

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Michael Fuller is a partner at Olsen Daines and an adjunct professor of consumer law at Lewis & Clark Law School in Portland, Oregon.