September 2, 2014
Last week the Missouri Supreme Court released two decisions on the same day that expanded Missouri’s Merchandising Practices Act (MMPA) with regard to the origination and servicing of real estate mortgage loans. The effect of the decisions could impact other consumer loans and collection activities, including auto loans, other credit transactions and real estate mortgage lending/servicing.

First, the Court found that loan origination is a covered “sale” under the MMPA and continues until the last service is performed or the loan is repaid. The Court then extended MMPA coverage to loan servicers, finding that servicing is an activity “in connection with” the sale. According to the Court, the MMPA applies to loan servicers (even though they were not the originating lenders) because the term “any person” as used in the MMPA “does not contemplate a direct contractual relationship between plaintiff and defendant.”

To read the full alert, click here.