Foreclosure-Review Borrowers Grappling with Credit Reports

Wronged borrowers first had to deal with foreclosure reviews that were so ineffective and costly that they were cancelled by regulators in favor of a blanket compensation agreement.
Now these recipients who are starting to get checks of various amounts — tied to categories of mortgage-servicer wrongdoing over which they had no control — are trying to clean up their credit reports.

Once again, they are on their own.
The Independent Foreclosure Review agreement, affecting some 4 million borrowers, does not require mortgage servicers to fix the credit of affected borrowers. Some lenders have done so, but many borrowers are still struggling to clear their credit files.
Since the reviews were stopped, regulators were not able to fully determine if the servicers reported incorrect information to the credit bureaus.
Those with erroneous blemishes on their three credit reports have to dispute the items with the banks and three credit-reporting agencies — Equifax, Experian, and TransUnion.
If there is any good news for the borrowers, it’s this: Nothing in the IFR settlement with the 13 mortgage servicers — including the biggest banks JPMorgan Chase, Bank of America, Citi and Wells Fargo — stops eligible borrowers from taking legal actions or any steps to clean up their credit files, even if they receive compensation checks.
Still, for many IFR borrowers this is small comfort in light of the challenges some face in wiping out wrongful or erroneous information on credit reports. A foreclosure on a credit file makes it much tougher to get the best interest rates on — or even qualifying for — future loan products.
Typically, foreclosures will lower a credit score as much as 250 points, and stay on your credit report seven years.
If you continue paying other loan payments on time, within three years your credit score could be improved enough to get you a new mortgage with a favorable interest rate — but that may not be the case in the current environment of tighter lending standards in the post-financial crisis era.
Here are some of the options for IFR borrowers seeking to clear their credit reports of wrongful or erroneous foreclosures or other negative marks by the IFR mortgage servicers:
File Disputes with Equifax, Experian, and TransUnion
By going to http://annualcreditreport.com, all U.S. consumers are entitled to one free credit report annually from each of the three credit reporting agencies. The reports are made available immediately online, providing the borrower the option of disputing wrongful negative marks such as foreclosures immediately. This is the only authorized website to fill orders for the free annual credit reports (credit scores are not free) to which you are entitled under law. All others will charge you for reports and credit scores.
Under the FCRA (Fair Credit Reporting Act), both the consumer reporting company and the information provider (in this case the mortgage servicer) are responsible for correcting inaccurate or incomplete information in your report. To take full advantage of your rights under this law, contact both the credit bureau and the mortgage servicer.
If you have exhausted your free credit report for the year, contact the bureaus directly:
Equifax:1-800-685-1111; equifax.com
Experian: 1-888-397-3742; experian.com
TransUnion: 1-800-916-8800; transunion.com
File a complaint with the Consumer Financial Protection Bureau
The CFPB has handled more than 6,700 credit reporting complaints, according to its most recent update on overall consumer complaints. The most common type of credit reporting complaint is about incorrect information appearing on the consumer’s credit report, such as information that is not the consumer’s, incorrect account status and incorrect personal information (73 percent). Another common type of complaint addresses issues with credit reporting companies’ investigation of information disputed by consumers (12 percent).
To file a complaint with the CFPB, go here: http://www.consumerfinance.gov/complaint/
In recent months, the Bureau has made it much easier to file complaints against banks and credit-reporting agencies. You can even check the progress of your complaint online.
File a complaint with the Office of the Comptroller of the Currency (OCC)
The OCC, along with the Federal Reserve, are the bank regulators overseeing the IFR agreement. Go here to file a complaint if your mortgage servicer refuses to remove a wrongful foreclosure citing on your credit report: https://appsec.helpwithmybank.gov/olcc_form/
The OCC notes the following for those filing complaints:

We cannot act as a court of law or as a lawyer on your behalf.
We cannot give you legal advice.
We cannot become involved in complaints that are in litigation or have been litigated.

Read More on the Independent Foreclosure Review:

16 thoughts on “Foreclosure-Review Borrowers Grappling with Credit Reports

  • April 21, 2013 at 3:50 pm
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    I am very happy to say that the Bank is trying to live up to his obligation of doing right by us, by fixing our Credit Report, that means more to me than any money in the world. I have a Credit Monitoring on my credit file. I pull a copy on all 3 on April 5, I notice that the Bank that I had my mortgage with (CHASE) has reported a EQUIFAX 0 BALANCE , TRANSUNION 0 BALANCE, EXPERIAN WAS TOTALLY REMOVED FROM MY REPORT HAS EVERY HAVING A MORTGAGE. I have still not received a check as of yet, mine is in the April 26 wave. All the money in the world could not compensate me for all the mental anguish I went through with them, to me my Credit meant the world to me. I just happy to say my score is on the rise again since they have adjusted this mess. Please, get a Credit Monitoring Service it is worth the money, and they will help you with any dispute and get your credit back on track they will also provide you with all 3 scores.

  • April 21, 2013 at 7:08 pm
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    On my credit report with experian it still show the foreclosure on my file. Do I need to dispute that then? I receive my checks already too. My guess was I thought the IFR were suppose to go and make correction on their end becuz the bank screw up.

  • April 22, 2013 at 3:25 am
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    To Amanda T. Dispute the Mortgage on your Experian, so that the bank can respond, if they do
    not it would have to be removed by Experian. Good luck.

  • April 22, 2013 at 3:24 pm
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    Thanks I been waiting for this information long time ago. I hope is true as I have a 16 years old
    I need my credit back . Thanks.

  • April 22, 2013 at 5:53 pm
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    to ericajohnson,Thanks for the info…i will have to do that for all 3 of the credit bureau. I am hoping it will boost up my credit score. Almost a year ago, I went and apply a car loan and my score was only 560 becuz of the foreclosure on my credit report. So I hope that after disputing it will help boost up the score alittle bit.

  • April 22, 2013 at 6:26 pm
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    Erica how did u find out what wave? Still no check and the foreclosure is sill showing. Thanks chase.

  • April 23, 2013 at 10:40 am
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    Dan
    April 23, 2013 at 10:11 am
    Hello
    Wells Fargo foreclosed on us, and did not even own the mortgage.
    I hired 3 different firms to try and work something out in the form of a
    Modification, Wells Fargo would not even discuss it.
    Then I ended up hiring 3 differ law firms to help file the Chapter 13
    All of these Firms were so busy raking in Huge profits from all the BK cases, that we could not even get one of them to do due diligence and file the correct papers.
    I spent over 20K on worthless Attorneys, we also filed every complaint under the sun and all of these Government agencies did NOTHING AT ALL, we never even received a reply from any of them.
    After all of this, I choose to become my Own Attorney Pro Se and straighten out the Chapter 13.
    This all took so much time, that even after being laid off in the worst depression on recent record, and being lucky enough to find something temporary 200 miles from home,.
    I also lost the temporary position after a year, as I was being summoned to court and harassed by Wells Fargo every other month.
    I finally negotiated a shotgun at my head modification with Wells Fargo, who refused to ever provide a single shred of any evidence that inflated my Mortgage by over 10,000.00.
    My new payments were higher than before, and this all cost me over 40,000.00 and surely took years off my life due to the stress and hassles.
    Now The FEDs and Bank Crooks want off the hook for a 1,000.00 per person with no disclosure at all.
    America, none of these crooks even went to jail; we were all ripped off BIG TIME.
    I Demand BETTER, and so should the rest of the Americans in this once great country.
    People need to be Jailed, Feds needs shut down.
    This is absolute BS, Call your Senators.

  • April 23, 2013 at 3:35 pm
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    @ Kim…you can call rust and they will let you know when your check will be mailed out.

  • April 23, 2013 at 4:36 pm
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    As a homeowner that fought hard to keep her home, this so called Independent Foreclosure Review has resulted as a slap in the face. After countless efforts of payments, and documents submitted and my mortgage servicer(America Servicing Company) continuously renewing my modification instead of turning it over to a finalized payment then finally foreclosing on my home, I am disgusted with the decision they(IFR) made to place people in whatever category they felt instead of digging into a clear cut decision based on the actual findings, and then distributing mediocre payments to those who lost their home and remain in debt all at the fault of the loan servicer. I am truly disgusted!!!!!

  • April 24, 2013 at 8:07 am
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    This is a letter I felt compelled to write to the letter of the editor of our local newspaper. The payouts that are being paid to affected homeowners is a straight up joke! Some are getting as little as $300. Amazing that the banks were able to police themselves throughout this whole process. This letter will demonstrate, another way, that the banks are getting away with crimes that would have ended us, the average American, in prison.
    This is an apology to our neighbors, our neighborhood and our city. We apologize for how our home has deteriorated and how, it may seem that we have been neglectful of our home. We have lived in our home and in this beautiful city, for almost nineteen years; and for many years we were very involved in trying to better our community and in some ways are still involved today, although, as you will see, we have been busy in other avenues of bettering, hopefully, our country when this is all said and done.
    In 2004, after a very destructive year in our lives (the death of our son-in-law and grandson, the loss of a job and a son serving his country in Iraq); we were forced to refinance our home and unfortunately for us, had dealt with a loan company that, within six months after our “closing”, would receive a Cease and Desist letter from the State of Michigan for illegal practices. We would learn this fact after the bank tried to illegally foreclose on our home in 2006. We discovered that the involved lender had blatantly forged my husband and my signatures to the mortgage document, notarized that document and recorded it as legal tender at the Lapeer County Register of Deeds.
    We spent the next six years, fighting the bank, over a crime that, had we committed, would have sent us straight to jail, paying restitution and suffering the consequences that go along with that type of decision. We not only had to fight the bank; we had to fight the very court (bankruptcy) that we reported this crime to. The trustee hired an attorney that jumped on the bandwagon to win an avoidance of the forged mortgage, only for that same attorney to turn around, after we won (in July 2007), and attempt to sell the avoided mortgage back to the defendants for $30,000, without notifying us or our attorney; an action which would have allowed the guilty defendants to retain their interest in our property and continue with their illegal foreclosure. We were forced to pay the trustee’s attorney over $12,000 for his “services”.
    This erroneous decision by the bankruptcy court, before determining whether the bank had a legal right to an equitable mortgage, caused us to appeal the resale of our voided mortgage to the US District Court. This courts determination was that the bankruptcy court had not determined whether the bank had a legal right to have an equitable mortgage, based on the forgery, and sent it back to the lower court for a determination. The bankruptcy court, upon the receipt of this remand, immediately determined that the defendants were eligible for the equitable mortgage and, again, we were forced to appeal to the US District Court. The final determination deemed that the bank did not have the legal right to have an equitable mortgage. This action caused the bank to file an appeal to the US 6th Circuit Court, where, finally, in January of 2012 the higher court denied the equitable mortgage.
    Most would consider this a big win, however, if this was a big win, I wouldn’t be sitting here, almost seven years later, feeling compelled to write this letter of regret. The entire time that we were embroiled in this fight, we were continually told that we were not to make any repairs to the home (after all it might go back to the bank). The bank (six years after the avoidance of the mortgage and a year-and-a-half after the circuit court’s decision) still have their names on our deed and have placed forced insurance upon our home that has been billed to us on our ever growing “escrow” that we weren’t entitled to when we actually had a mortgage…and the coup de grâce, the bank is reporting that we are over 80-months delinquent on our non-existent “mortgage”.
    We have had to hire another law firm to straighten out this mess and after speaking with our lawyer, this will be another long, drawn out affair. We have attempted to file a claim against the insurance, however, it is likely the bank will rescind the insurance based on a “mutual mistake of fact” (the original servicer, midway through the appeals process sold the non-existent mortgage to another servicer)…so, in other words, oops, sorry we didn’t tell you that the mortgage we sold you had no validity, no hard feelings.
    We have contacted every agency that we can think of to try and get help with our situation, only to be told that because our credit is shot we, most likely, would not be able to get any help if there was any help available in the first place.
    There is no quick fix for us. We decided to stand up against a crime that was committed against us and this is the consequences of an average American going toe to toe with the banks. They will chew you up and spit you out without any regard for the laws that govern us, the “average” Americans. So, therefore, I feel compelled to apologize to my neighbors and community and let you know that this is not what we want and every day we make strides to overcome what the last ten years has done to our lives. I will not apologize for fighting a crime or standing on principle, but I know that my decisions now have consequences for my neighbors and neighborhood. I hope that this will at least give our neighbors answers to the why “it is what it is”.

  • April 24, 2013 at 11:08 am
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    I honestly don’t understand why the OCC and Fed did not order correcting everyone’s credit report as part of the settlement. After all by settling, the banks are on some level admitting wrong doing. The other thing I’m hoping someone can clarify is what constitute a ‘foreclosure’? I’m asking because my house was I thought foreclosed in 2010. The county site shows that the property is registered under the bank, not me anymore. Additionally, I received the 1099 from the bank in 2011 for my taxes. Recently, I submitted a dispute to have my credit report updated and as a result the report is now showing a balance and the interest/past due amount on it which lowered my score. I re-submitted a dispute but haven’t received an update yet. I’m hoping that the account would come off or be updated correctly or revert back to what it was, which was a 0 balance but showed a 120+ days past due.
    I will also be submitting a complaint with CFPB, OCC and the Fed in regards to correcting the credit report.

  • April 24, 2013 at 9:46 pm
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    The banks did not adhere to the agreement…so as far as I can tell…they should be found in contempt. I’m in for the class action lawsuit…no matter how long it takes!

  • April 27, 2013 at 11:37 pm
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    Submitting a dispute, in my case did not help. I submitted a dispute recently to see if the foreclosure status could be removed; instead the bank updated the balance from $0 to what my loan was at the time it went into foreclosure and indicated that there is a past due amount, which it didn’t before. The last update made was August 2010 which was when it was foreclosed and i have lived there for almost 3 years. I received a 1099 in 2011. Now the bank is showing on my report that I’m 30+ days past due as of March 2013. I’m shocked and confused! Ive built my credit back to a okay score the last 3 years and this just made it worse. Never in a million years did I thought a dispute would make worse! If anything I thought there would be no change and that’d be it. I tried to get equifax to revert the updates but Equifax is no help either. Apparently they just report it and take no responsibilities. I called the phone number equifax gave me for the bank but when I called the rep was not much help! She said what they recently reported was correct and that is how it should have been reported 3 years ago if it wasn’t. i told her no it wasn’t and I have a recent report to prove it. I asked her to revert it but she said she couldn’t and that I would have to call their Foreclosure dept to see why it was reported correctly 3 years ago and see if they could update it. So if they failed to report it correctly 3 years ago I’m supposed to suffer for their mistakes – again?? I regret that i intiated the dispute! If only the OCC and Fed had ordered the banks to correct everyone’s credit report I wouldn’t have to be dealing this on my own!!

  • April 27, 2013 at 11:40 pm
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    Correction – I meant to say that I have not lived in my house since it went into foreclosure 3 years. I’ve been out of it since 2010.

  • June 6, 2013 at 4:41 pm
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    I still have not received payment from RUST and they are not telling u anything other than your payment has not been sent and that you will receive compensation. They are not telling you how much or when to anticipate the payment except they will be sending payments out through July 15, 2013. Thats telling me alot? Yeah Right. Also Chase has not fixed my credit and it is still showing as a forclosure even though I filed bankrucpty Chapter 13. And has since been released. Any suggestions on a good attorney anyone?

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