Sign in to follow this  
acorn

Erroneous foreclosure on credit report--how to fight?

Recommended Posts

Several years ago, we were involved in a dispute with our mortgage company over their illegal attempts to collect more escrow than they were entitled to.  In the process of this dispute, they filed for foreclosure on false grounds (that we had not made payments, when in fact they cashed our payment checks and then cut checks to us for the amount of payment).  We were in the process of fighting this action (with an attorney) for two years when my husband was transferred by his job.  We sold the house and paid off the mortgage; yet the mortgage company is claiming on our credit report that they completed the foreclosure.  I seriously doubt we could get the mortgage company to tell the truth to the CRA without further lawsuits.  The CRA reports show that the account will appear on our credit report until 2016.  What is the best way to go about getting this corrected?

Share this post


Link to post
Share on other sites

This is an easy one:  you file a complaint with the CFPB attaching copies of documents showing the house was indeed sold and not foreclosed on and that they are reporting false information in violation of the FCRA.  Watch how quickly they do something when a federal agency with some teeth gets involved.  

Share this post


Link to post
Share on other sites

They have finally quit reporting that the house was in foreclosure, but are still reporting 2 30-day and 11 90-day lates.  However, the account will fall off our report this coming July.  I don't know what more we can do without taking them to court again, which we don't have the finances to do.  However, if anyone hears of a class-action against PHH, let me know.

Share this post


Link to post
Share on other sites

Howdy, 

 

I see two options for you, aside from just letting it ride.  

First, you could file a lawsuit against them.  This would take some action first, because under the relevant law(Fair Credit Reporting Act), you need to go through the dispute process to have the ability to sue them for violations.  You may or may not have already done that.  But if your case is solid, you should have no problem finding an attorney who would take your case without you spending any money out of pocket.  You are also in Texas, so there would be additional penalties possible under Texas Finance Code.

Second, you could dispute with the credit bureaus.  I'd fix my money on them not changing anything, and calling it 'verified'.  Then, you could contact the credit bureaus and request that they verify with you the method of verification used to answer the dispute.  Sometimes, the credit bureaus drop it off the report themselves, because they do not want the liability of getting sued.  Either way, you should probably be able to get this done, and maybe even get paid for your troubles, without spending money to an attorney.  It could be worth your while, depending upon how aggressive the attorney may be and how many violations you really have there.

Wheels up, 

Stick

Share this post


Link to post
Share on other sites

This is a fairly easy one to take care of.  First, I would send a dispute to all CRAs.  When they come back again as "verified", I would send another letter to the CRAs asking for them to provide the Method used to Verify as well as the name and phone number of the person who verified the account to them. (an MOV letter).  They have 15 days to respond to your MOV letter with the method and contact information.  If they do not provide this information (they usually do not), check to see if the account still remains on your reports (sometimes, even though they do not properly respond to an MOV letter, they will quietly remove the account so they don't have any more legal liability).  If the account is still on your reports, then I would file an arbitration claim in AAA.  I believe all the CRAs use AAA in their user agreements and if I recall correctly, the agreements also say they will pay your initial filing fee (which is $200).  So this will cost you nothing, all you have to do is fill out the filing forms from AAA website and send them off.  The CRAs are quick to settle arbitration claims because they do not want to pay for an expensive arbitration when they have no claims of their own they could win on.

Unfortunately, I am contractually prevented from explaining details on how I know this works, but I can tell you that a typical settlement like this would include a $1,000 check to you from EACH CRA,  plus removal of the account from your credit report.

Share this post


Link to post
Share on other sites

What's AAA?  Is it worth the hassle to go through all of that at this point if it's just going to drop off our credit reports in a few months anyway?

Share this post


Link to post
Share on other sites
12 hours ago, acorn said:

What's AAA?  Is it worth the hassle to go through all of that at this point if it's just going to drop off our credit reports in a few months anyway?

AAA is an arbitration firm.

It's worth what you believe it is worth.  That is your decision.  For me, I despise banks and credit agencies who don't follow the law, misuse and abuse consumers.  I am not one to roll over and just take the pain until the cuts stop bleeding on their own.  I like to hold them accountable for their wrong doings.

  • Like 1

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this