On January 22, the U.S. Court of Appeals for the Fifth Circuit affirmed a lower court’s decision that a loan-modification discussion between two borrowers and a mortgage servicer did not constitute a debt collection activity under the Texas Debt Collection Act (TDCA). After two borrowers defaulted on their home equity loan, they were encouraged by their mortgage servicer to apply for a modification under the Home Affordable Modification Program (HAMP). When the borrowers learned that they were, in fact, ineligible for a HAMP modification, due to state law restrictions, the borrowers filed suit against the creditor and the mortgage servicer (the “creditors”). Specifically, the borrowers alleged that the creditors violated the TDCA’s prohibition against using false representations or deceptive means to collect a debt by suggesting that the borrowers apply for a HAMP modification for which they did not qualify. The three-judge panel rejected this argument for two reasons. First, the court found that the borrower and creditors conversation about a modification did not “concern the collection of a debt” and thus the conduct was not subject to the TDCA. Second, even if the conduct were covered, the court found that the creditor had not affirmatively represented that the borrowers would qualify for a HAMP modification and, thus, under the TDCA’s prohibition against using false representations and deceptive means to collect a debt, no liability could ensue.