Legal Question in Consumer Law in Pennsylvania

I am attempting to buy a house, and have discovered I have a judgment against me from a previous mortgage. I have never held a mortgage in my name. Some years ago, my wife took one out to purchase a house from a parent. We unfortunately had to walk away from that house because it was infested with black mold and maintenance costs to eliminate it were more costly than losing the house. She was also part of a class action suit against the lender for their lending practices (Bank of America - a suit that was won). However, the judgment for losing the house is still on her credit file. We've now found that they're reporting it against my file as well and refuse to take it off as they claim I signed a "deed of trust." I did not knowingly sign any such document, and if I did, it was not properly explained and the consequences were not made clear to me in any way. We are now at risk of losing the mortgage for our new house. Do we have any recourse to get this judgment removed from my credit file, with BoA not cooperating?

Asked on 2/24/14, 9:21 pm

1 Answer from Attorneys

The tome to object to this was when you were sued. If the lawsuit against you was proper and resulted in entry of a judgment then this will be reported on your credit. The only way to remove items (other than having them age off) would be to get the judgment opened and assert whatever defenses you would have.

However, if you never had a mortgage then the judgment for the mortgage deficiency should not be reported on your credit (it would be on your wife's credit but not yours).

This does not quite make sense. The starting point is not the credit report. Its the judgment. I would go to the courthouse and examine the court file for the judgment. Make a copy of the relevant documents (summons & complaint, return of service, motion for default/summary judgment and the judgment). Take the papers to a consumer attorney who specializes in FDCPA/FCRA or mortgage foreclosure and pay the attorney to review this.

(1) see who was sued and whether the person was served properly;

(2) note what happened next - was a summary or default judgment entered? Was any answer filed?

(3) what was the date of entry of the judgment?

(4) do any grounds exist for opening the judgment?

You say Bank of America says you signed a deed of trust? PA does not use deeds of trust. And a deed of trust is akin to a mortgage. The deed of trust is recorded on the property. If you signed this document then it should have been recorded at the recorder of deeds office in the land records. Also, if you really were obligated on this then you also would have been sued and documentation evidencing your obligation on the mortgage/deed of trust/note may have been part of the civil action. So this goes back to you examining the court file - was or was there not a judgment entered against you and if there was can it now be challenged? If it can't then you have 2 options: (1) file bankruptcy and discharge your liability; or (2) resolve the judgment so that it is satisfied (paying in full or settling).

Assuming that the judgment was just against your wife, then it should not be reported on your credit. Have the attorney review your credit report and see how this judgment is being reported. In order to challenge inaccurate information on your credit, the law requires you to first notify the credit bureaus.

Judgments are public records and these are reported by the credit bureaus, not Bank of America. The credit bureaus have their own system for obtaining information and I find it odd that the credit bureau would have reported this on your report if the judgment was only against your wife, but credit bureaus do make mistakes.

So if the judgment was just against your wife, advise the credit bureau that you were not obligated on the mortgage and send them a copy of the judgment showing it was just against your wife and ask them to remove from your credit report. Send the letter by certified mail and send to each of the 3 major credit bureaus. If you do not get a satisfactory response then you would have to send the same letter to Bank of America, again certified. If the information is still not corrected/removed then you would sue under the FCRA.

The class action suit did not have anything to do with the mortgage on the property. If it did then a judgment should not have been entered here.

If information was properly reported, then you should have reviewed your credit prior to applying for a new mortgage and resolved any outstanding issues before you applied. If you are going through a traditional mortgage lender they may not be willing to issue a mortgage until the prior matter is resolved since there is a judgment.

If the information was not properly reported, then the mortgage lender may have a "rapid re-score" and still be able to make the loan if the lender knows the information on your report is incorrect and in dispute. Ask the mortgage company if it will help to get a letter from a lawyer on this if there is indeed an error.

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Answered on 3/02/14, 9:09 pm

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