Legal Question in Real Estate Law in California

Bank continues to report delinquency on my account 3 years after Short Sale settlement: My understanding is that after my wife and I short sold our home (April 2011), that the accounts for 1st mortgage and HELOC would be settled for less than full value and closed. I expected the short sale to show on my credit report for 7 years as a settlement for less than full value with only the delinquent payments prior to the short sale appearing in addition to the short sale itself. I became aware last summer (June 2013) that the HELOC bank was continuing to report current delinquency as recently as May 2013. I wrote them a letter and received a response that they would direct the bureaus to update my records and remove any derogatory information after April 2011. However, now nearly 3 years later, the HELOC bank continues to report our account delinquent to the bureaus every month (most recently Feb. 14) in addition to the settlement. I believe this to be illegal and in violation of FCRA. Furthermore, considering the bank already admitted wrong-doing and stated they would correct the situation in June 2013, the fact that they continue to report the same derogatory information should qualify as a willful violation of FCRA. Do I have a case?

Asked on 3/11/14, 7:20 am

1 Answer from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

The banking industry over the last couple of decades had set up a complex yet oversimplified way to track, process and service its high-volume residential mortgage / deed of trust business. This complex and creaky system included handling a high volume of packaging, transfers, servicing agreements, electronic registrations, etc. The system was not designed to accommodate anything unusual, such as personal interactions between the borrower and the loan beneficiary (the "bank"). You are just one of a very large number of individual borrowers who has attempted to work within the "system" to solve a problem, thought the problem was solved, but then, guess what? NOT solved. At least not completely. I think you do have a case against the HELOC bank. However, I would be a little hesitant about filing a lawsuit (assuming that's what you mean by "Do I have a case?"). That would be a time-consuming hassle, and I'm unsure whether you could get your legal fees reimbursed, even if you won. Maybe threatening letters (by certified mail) would be the way to start. The difficulty is in determining whom to address. Maybe letters addressed to several organizations and/or at several levels of "management."

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Answered on 3/11/14, 2:41 pm

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