Good Evening!

I hope this newsletter finds you doing well. For today’s newsletter, I want to briefly discuss the importance of checking your credit report after you have started making payments under a mortgage modification.

A common way of resolving a home mortgage default and avoiding foreclosure is to get approved for a mortgage modification. Most of the time, once the borrower is approved, they are placed on a “trial plan” in which the borrower makes three (sometimes more) “trial payments” to the lender. If those trial payments are made timely, the lender will generate a “permanent modification.”

Once the permanent modification is signed and returned to the lender, the foreclosure case is then dismissed by the lender.

Because of the stress of the foreclosure, homeowners often forget about the important credit reporting aspect of this. About 45 days after the borrower has made his or her first payment under the permanent modification, the borrower should go to www.annualcreditreport.com and pull a free copy of his or her credit report from all three bureaus (TransUnion, Experian, and Equifax).

The credit report should reflect that the mortgage is current. If the borrower’s credit report still shows the mortgage as delinquent, the borrower should send a written dispute, via certified mail, return receipt requested, to the creditor and send a copy, also by certified mail, return receipt requested, to each of the bureaus posting the incorrect information on their report(s). CLICK HERE for sample credit dispute letters, posted by the Consumer Financial Protection Bureau (“CFPB”).

If the creditor refuses to update and correct the erroneous credit entry even after being placed on written notice of the problem, the borower may need to consider bringing suit against the creditor (and the credit bureaus) for violations of the Fair Credit Reporting Act. Under this act, the borrower may be entitled to damages as well as a recovery of their reasonable attorney’s fees and costs.

If you ever have any problems with this issue, feel free to contact our office, Torrens Law Group, P.A., at 813-260-4883.

I hope this information has been helpful. Have a nice evening!

Until next time,

 

Ryan C. Torrens, Esq.

Consumer Advocate