Report My Mortgage Payment as Disputed & Not Late!

I just filed a lawsuit against my lender for fraud and 10 other actions including sold note and I would like to know what law governs mortgage servicers to report my payment as disputed and not late since I am not behind in payments, the servicer and lender is countrywide.

Tim

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Hello Tim,

The Fair Credit Reporting Act (FCRA) requires that the servicing lender (referred to as a furnisher by the statute) only report what is ‘complete and accurate’.  To trigger a cause of action under the FCRA, the consumer must file a dispute with the Consumer Reporting Agency (CRA) and this then obligates the CRA to perform a meaningful investigation.  If you are “not behind in payments” then the credit report must reflect such after a CRA dispute.

Secondly, if the mortgage was in default at time of transfer (or the servicing lender treats it as if it is in default) then the servicing lender is subject to the FDCPA.  Wilhelm v. Credico, Inc. No. 07-1136 (8th Cir., 2008) confirms that a debt collector must communicate that a debt is in dispute whenever a new “communication” of the debt is made to a CRA.  Failure to do so is a violation of FDCPA § 1692e(8). In the case of a mortgage that is in pre-foreclosure, a new communication takes place every month.

And lastly, RESPA § 2605(e)(3) provides for the “[p]rotection of credit rating” when the borrower makes a Qualified Written Request with the following:

During the 60-day period beginning on the date of the servicer’s receipt from any borrower of a qualified written request relating to a dispute regarding the borrower’s payments, a servicer may not provide information regarding any overdue payment, owed by such borrower and relating to such period or qualified written request, to any consumer reporting agency (as such term is defined under section 1681a of title 15).

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.