Wallace v. Washington Mutual Bank, F.A., 2012 U.S. App. LEXIS 12971

WaMu foreclosed on Wallace’s property before an assignment of the note and mortgage was recorded, so WaMu did not own the mortgage at filing.
Wallace sued Lerner, Sampson & Rothfuss for FDCPA violations, Ohio consumer laws, and IIED based on the foreclosure alleging misrepresentation of ownership.
The foreclosure complaint claimed WaMu was the holder of the note and mortgage; no assignment had been recorded at that time.
Wells Fargo had transferred the note/mortgage to WaMu on August 14, 2008; the foreclosure was filed July 11, 2008, creating a mismatch in ownership status.
The district court dismissed the FDCPA claim under Rule 12(b)(6) for failure to plead a deceptive practice; it declined supplemental jurisdiction over state claims.
On appeal, Wallace argued that identifying WaMu as holder and owner, when WaMu had not yet obtained title, was a false representation under § 1692e.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does asserting ownership by WaMu before assignment violate 1692e?	Wallace maintains the foreclosure complaint falsely identified WaMu as holder.	Lerner argues no FDCPA violation since ownership could be anticipated before recording.	Yes; misrepresenting creditor ownership can be a material falsehood under § 1692e.
Is the misrepresentation material to an unsophisticated consumer?	Misidentifying the creditor caused confusion and impeded contact with the proper party.	Any ownership status dispute does not render the statement deceptive.	Material misrepresentation exists; the least sophisticated consumer would be misled.

Miller v. Javitch, Block & Rathbone, 561 F.3d 588 (6th Cir. 2009) (materiality standard for § 1692e claims in pleadings)
Harvey v. Great Seneca Fin. Corp., 453 F.3d 324 (6th Cir. 2006) (least sophisticated consumer standard)
Wallace v. Wash. Mut. Bank, N.A., 194 Ohio App. 3d 549 (Ohio Ct. App. 2011) (standing/ownership timing in foreclosure in Ohio)