ARTIFICIAL INTELLIGENCE IN LEGAL AND MORTGAGE PRACTICE: EMERGING RISKS IN AUTOMATED COMMUNICATIONS AND UNVERIFIED FILINGS

The rapid integration of artificial intelligence into legal practice presents both transformative opportunity and material risk. While AI-driven tools promise efficiency gains in drafting, research, and client communications, recent developments underscore a critical reality: the legal profession’s duty of competence and candor is not diminished—indeed, it is heightened—by reliance on automated systems. This tension is evident in the growing use of AI in client outreach and business development, where automation can quickly give rise to regulatory exposure.

This same dynamic is increasingly evident within the mortgage industry, where AI is being deployed across loan origination, servicing, loss mitigation, and default-related communications. From automated borrower outreach and document generation to decisioning models that influence foreclosure and modification pathways, the use of AI introduces heightened compliance considerations under frameworks such as the TCPA, RESPA, and state consumer protection laws. As with legal practice, the scalability of AI amplifies both efficiency and risk—making it imperative that mortgage servicers and their counsel implement robust oversight, validation, and audit mechanisms to ensure that automated processes remain accurate, compliant, and defensible.

Last month a Colorado attorney filed a class action lawsuit in the Eastern District of Michigan seeking damages for alleged violations of the Telephone Consumer Protection Act of 1991 (“TCPA”). i Landy v. Mortgage One Funding, LLC, (ED Mich. Case No. 2:26-cv-10643- MAG-CI). The TCPA stems from the Communications Act of 1934 originated to regulate “commerce in communication by wire and radio” for purposes of national defense and ensuring the safety of U.S. citizens.

In 1991, pursuant to authority granted under the Communications Act, the legislature commissioned a study which revealed that “[m]ore than 300,000 solicitors call more than 18,000,000 Americans every day” generating $435,000,000,000 in sales revenue which was “a more than four-fold increase [from 1984 to 1990].” ii As a result of these and other findings, the legislature enacted the TCPA to regulate unsolicited phone calls and other communications which the federal government, and most U.S. citizens, identified as innately annoying and an intrusive invasion of privacy. iii

The TCPA has undergone multiple amendments as technological advances create new methods for conducting commerce. In 2019, additional provisions were added to the TCPA to address the use of artificial intelligence used to make “robocalls” and create deceptive or inaccurate caller identification information. Brennan Landy relied on these more recent provisions of the TCPA as the basis for his class action lawsuit against Mortgage One Funding LLC (“Mortgage One”).

Landy asserted that Mortgage One used AI to make telemarketing calls to consumers’ cellphones “to promote [Mortgage One’s] business and to generate leads” in the sale of home mortgage loans and/or refinancing options. In violation of the TCPA, Landy’s complaint alleges that Mortgage One failed to obtain the express consent of those receiving the unsolicited AI phone calls, some of whom were on the National Do Not Call Registry.

Landy sought “a minimum of $500.00 in damages for each violation” of the TCPA and three times that if Landy (and/or other class members) could prove Mortgage One knowingly and willfully violated the TCPA. Landy requested class certification, injunctive relief to protect “the interests of the Class” and demanded a trial by jury. So far, only the complaint has been filed, so it remains to be seen whether Landy met the requirements for a class action suit or if there is merit to Landy’s claims. We will continue to keep you apprised of any important developments.

In addition, there are more published cases from the Courts on the concerns of AI. Earlier this month Florida’s Fourth DCA issued an opinion primarily to address a pro se litigant’s improper use of artificial intelligence to generate an appellate brief. Roussell v. Bank of N.Y. Mellon, No. 4D2025-1309, 2026 Fla. App. LEXIS 1910 (4th DCA Mar. 11, 2026).

The Court noted it was affirming “on the merits without discussion” but went on to admonish the pro se litigant who filed a brief containing thirteen non-existent cases and nine cases which the Court noted “existed” but did not “stand for the proposition described by the appellant.”

The Court warned the litigant that failure “to ensure the accuracy of any submissions to the court” could result in sanctions. Although the DCA refrained from imposing sanctions against Roussell, the Court’s decision to publish a written opinion only to point out issues with the AI-filings should serve as notice to those relying on AI to tread carefully or suffer the repercussions.

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1. Last month a Colorado attorney filed a class action lawsuit in the Eastern District of Michigan seeking damages for alleged violations of the Telephone Consumer Protection Act of 1991 (“TCPA”). iv Landy v. Mortgage One Funding, LLC, (ED Mich. Case No. 2:26-cv-10643-MAG-CI). Landy asserted that Mortgage One violated the TCPA by using AI to make unsolicited telemarketing calls to consumers’ cellphones to sell home mortgage loans and/or refinancing options.

2. Landy sought “a minimum of $500.00 in damages for each violation” of the TCPA and three times that if Landy (and/or other class members) could prove Mortgage One knowingly and willfully violated the TCPA. Landy requested class certification, injunctive relief to protect “the interests of the Class” and demanded a trial by jury.

3. So far, only the complaint has been filed, so it remains to be seen whether Landy met the requirements for class certification and whether there is merit to Landy’s substantive claims. We will continue to keep you apprised of any important developments.

i The TCPA is codified at 47 U.S.C. § 227, et seq.

ii 47 U.S.C.S. § 227 (LexisNexis, Lexis Advance through Public Law 119-69, approved January 14, 2026, with a gap of Public Law 119-60)

iii See Congressional findings 47 U.S.C.S. § 227.

iv The TCPA is codified at 47 U.S.C. § 227, et seq.

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