Cease and Desist

Cease and desist refers to a borrower's formal written request directing a debt collector or loan servicer to stop contacting them about a debt. Under the Fair Debt Collection Practices Act (FDCPA), once a debt collector receives a cease and desist letter, they must halt most forms of communication with the borrower — including phone calls, letters, and other outreach. The collector may still send one final notice confirming that contact will stop or informing the borrower of a specific action being taken, such as the filing of a lawsuit or referral to foreclosure.

For mortgage note investors, receiving a cease and desist letter from a borrower does not eliminate the borrower's obligation to pay or the investor's right to pursue legal remedies — it only restricts the communication methods. The loan can still be referred to an attorney, and foreclosure or other legal proceedings can move forward. However, the investor and their servicer must immediately comply with the request, as violating a cease and desist can result in FDCPA penalties and undermine the investor's legal position. When a borrower sends a cease and desist, it typically signals that direct negotiation has stalled and the resolution path will shift toward legal channels such as a demand letter from counsel or formal foreclosure proceedings.