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Trying something new

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I am working with a borrower who, when we started, had three separate redeemed foreclosures showing on her credit on three different real estate loans. Her scores are actually pretty good, in the high 600s (which just confuses the hell out of me, I have often seen people who have perfect credit records and lower scores, and in addition to the foreclosures, these people have multiple mortgage lates -- I just don't get it.)

Wait a minute, first some background detail: you can either have a loan manually underwritten or you can put it through automated underwriting, where the computer actually underwrites the loan. The rules are different for each kind, for instance, say you have a BK: if your loan can get approved by going automated, the BK only has to be two years old, but if the loan has to be manually underwritten, the BK has to be four years old. Also, a lot of times the computer will approve something that a human being would decline.

This particular loan would probably go automated, (a human underwriter would decline it in no time, so it has to go automated or it is not going to go at all) but the problem is that the credit report doesn't show the date the foreclosures were redeemed, so the computer spits it out as a referral to a human, because it doesn't know how old the foreclosures are.

I had the borrower dispute to the CRAs, and lo and behold, Equifax and Experian either deleted the whole trade line, or just removed any reference to the foreclosures, but TU kept coming back with the same info. She disputed three times, and we even sent them a copy of the recorded document to make it foolproof (that was a pipedream, they are too dumb to be fools). The borrower called TU and told them she needed them to report the date the foreclosures were redeemed (she wasn't even asking for them to be removed), because the way they are reporting it makes it look like the foreclosures happened yesterday -- status as of 8/2002 foreclosure redeemed. TU told her that they don't have anywhere in the computer to put that information. She said, "That's not really my problem, my problem is that you are reporting incomplete information and preventing me from refinancing my home." Then she quoted the FCRA, section 611 to them:

"(5) Treatment of inaccurate or unverifiable information.

(A) In general. If, after any reinvestigation under paragraph (1) of any information disputed by a consumer, an item of the information is found to be inaccurate or incomplete or cannot be verified, the consumer reporting agency shall promptly delete that item of information from the consumer's file or modify that item of information, as appropriate, based on the results of the reinvestigation."[Emphasis mine]

So they said, ok, we'll reinvestigate. The new report came yesterday, and it says exactly the same thing the first three reports said. Geeze, this is so exasperating and frustrating; we have been working on this for SIX MONTHS!!!!

So we fired off a new letter to them that if they don't get it off within two weeks, she is going to file suit based on their continuing refusal to obey the law.

I think this section of the FCRA might come in handy for things like when the lien was paid (as opposed to released), or when the account sent to collection (as opposed to when it was last reported) or, this is my favorite: was late 30 days, but it doesn't say when. Recent lates count more against your scores than old ones do, and if they don't show the date, the computer assumes it was recent. The score code for that says something like "time since delinquency too recent or unknown." So it looks to me like we have a stick to beat them with: if the information is incomplete, they have to delete it. I am sure that all the creative folks on this board can come up with all kinds of ways that this can be used to our advantage. :D

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