Article Courtesy of The Palm
By Kimberly Miller
Published December 11, 2014
The lurking debt left after a foreclosure is hitting Florida residents hard this year as a private firm files to collect on so-called “deficiency judgments”, which are often worth tens of thousands of dollars.
But one homeowner is fighting back in a federal lawsuit seeking class action status on behalf of borrowers whose wages can be garnished and assets seized to pay off the leftover mortgage debt.
In Palm Beach County, about 240 deficiency judgment lawsuits have been filed by the Texas-based firm Dyck O’Neal. The suits often come as a surprise to homeowners who thought their foreclosure battle ended when they saw their home sold at auction.
A deadline change in state law triggered the mass of deficiency judgment filings this year.
The lawsuit, filed in October by a former Jacksonville resident, says the collection firm is violating the Fair Debt Collection Practices Act in cases where suits are being filed in Florida, but the former homeowner now lives elsewhere.
Danella Huthsing moved to St. Louis after a 2010 foreclosure. Her Jacksonville home was sold at auction July 15, 2010, but Dyck O’Neal is claiming she still owed $91,029 in unpaid debt.
Four years later, Dyck O’Neal sued her in Florida seeking to collect on the debt.
“Defendants’ systemic conduct constitutes actual harm to thousands of individuals like (Huthsing), who are being forced to defend themselves in distant or inconvenient courts against an unanticipated and unfamiliar debt buyer,” the lawsuit says.
The lawsuit was filed by Jacksonville attorney Chip Parker of Parker & DuFresne law firm. It’s his second attempt to go after Dyck O’Neal. He said he dismissed a similar lawsuit filed in August after evidence was produced that said the loan may not have been a consumer loan.
“Danell Huthsing’s loan is definitely a consumer loan, and to avoid protracted arguments on damages, Ms. Huthsing is only seeking statutory damages on behalf of class members,” Parker said in an email. “Individual class members who suffer actual damages as a result of Dyck-O’Neal’s illegal collection activity can still file individual federal cases for actual damages.”