Mortgage Debt Re-aged and Disputes Marked Frivolous

Lee,

I am a victim of re-aging. I opened a 1st and 2nd mortgage on a home in 2002. By 2003 I had lost my job and my home to foreclosure. My last payment was made February of 2003. The 1st mortgage fell off my credit in 2010. The 2nd has been re-aged a number of times over the last 5 years. The first time was after the loan was transferred from BofA (BAC Home Loans) to Litton Loan Servicing. Litton changed the date to show my first delinquency in 2007. I disputed this in 2010 only to have them change the date again to May of 2010. The loan was then transferred to Ocwen. After disputing directly with Ocwen, they changed the date to November of 2010. 

I have disputed this so many times that even the CRA's refuse to allow me to continue to dispute it. I have even provided the CRA's and Ocwen copies of the official payment records from BofA. Ocwen will not respond to my certified letters, and the CRA's tell me that I have no BofA accounts. Because the account number was changed when Litton took over the loan, the CRA's say it is not the same account. Worse of all, no one will help. Even numerous attorneys have been contacted, but none are interested in representing me. I had one tell me that my case would not make a good class action suit! I am not looking to make millions off of these criminals, I just want this removed from my credit so I can move on with my life. It is very frustrating, and I feel I am just spinning my wheels every time I send another certified letter, knowing it will never make a difference.

Erik

Erik,

First let me apologize for taking so long to get back to you. The holiday season is always hectic around my house. 

That being said, first let me address why your account kept updating. Each time you filed a dispute with the credit bureaus, they contacted the collection agency and asked for verification. Federal law does not govern the type of investigation the credit bureaus have to conduct. Because of this, they'll generally fax over a sheet saying "Is the information your reported accurate?" The collection agency faxes back a response of "Yes" and the debt is verified. Period. No proof required. 

Now, each time you made that dispute and the credit bureaus attempted to verify, the counted as activity on your account and the date on your credit report updated accordingly. BUT..and this is a very big "but." that should have no bearing whatsoever on the debt's reporting period. The reporting period is set in stone at 7 years from the date your account first went 180 days delinquent  No amount of payments or disputes can change this date. 

The credit reporting agencies are refusing to help you because they have marked your dispute over this particular issues as "frivolous." Once upon a time people could clean up accurate negative information from their credit reports by disputing the same entry over and over and over again. Somewhere along the line, sooner or later, someone would make a mistake. Either the credit bureau computer system would miscategorize the dispute or the collection agency would neglect to respond, or any number of things. This resulted in the credit bureaus deleting the report. The only trick was to dispute maniacally until the entry disappeared. This is why all those "Clean up your credit report!" companies seemed to pop up overnight about ten years ago. It was a booming business. 

To prevent this bit of gray-area fraud from continuing, the federal government updated the Fair Credit Reporting Act to give the credit bureaus the right to deem repeated disputes "frivolous" and refuse to investigate them. Unfortunately, this makes fixing errors extremely difficult for the honest people out there who just want what they're legally entitled to – an accurate credit history. This has always been a source of serious frustration for me as, nine times out of ten, my clients don't come to me until they've dug an extremely deep hole for themselves. If the item was still disputable, I can be of much more assistance by telling the individual exactly how to structure their letter, what to say and what no to say, what documents to send, etc. In many cases, however, once the credit bureaus say a dispute is frivolous, my hands are tied. 

That being said, you can try requesting a Method of Verification. I'm linking a website below that explains the process in depth. It may not be successful after having your dispute marked "frivolous" (and TransUnion is going to be the hard one to work with here) but try it anyway. The important thing is to create a paper trail. 

Method of Verification 

Now, the credit bureau says that you don't have a Bank of America account and are using this as a reason to leave this inaccurate information on your credit report. The irony here is that no collection account should remain on a credit report longer than the original creditor's entry. If it does so, its been re-aged. This is the very reason your are disputing the debt, yet the credit bureaus say that the very information that supports your dispute (the lack of a Bank of America account on your credit report) is what proves your dispute is frivolous. 

Oh, and accounts are assigned a new number when they change hands. The credit bureaus know this and are using the different account number as a cheap reason to try to blow you off. 

The good news here is that you can prove to the credit bureaus that the original creditor was Bank of America. The Fair Debt Collection Practices Act notes the following: 

Within five days after the initial communication with a 
consumer in connection with the collection of any debt, 
a debt collector shall, unless the following information is 
contained in the initial communication or the consumer has 
paid the debt, send the consumer a written notice containing—

(1) the amount of the debt; 
(2) the name of the creditor to whom the debt is owed; 

So, when you filed your validation or dispute with the collector (and I am assuming that you did) it should have sent you a written response noting that Bank of America was the original creditor. If it did, you can use this information to try and shove the credit bureaus convoluted reasoning right down their throats. If it didn't, it violated the FDCPA and you have the right to sue.

The problem with suing is that lawyers are, in general, complete and utter jerks. The FDCPA restricts monetary awards for violations to $1000 or less. This means that, if the lawyer charges based on what you collect, helping you clean up credit report errors just isn't a profitable use of his time. But don't worry about finding a lawyer just yet. The person you need to try to reach first isn't your average attorney – its your state's attorney general. 

Request the method of verification first and see what they say. Then write a letter to your attorney general. Make it nice and professional. Explain everything that has happened. Explain that you merely want the credit bureaus to do what the law says they have to do. Instead, not that you – an honest consumer with a valid problem – are being turned away and you have nowhere else to go for help. Make it very clear that your disputes are not frivolous. Send copies of all the letters you've sent and the responses you've received and ask nicely if someone in the attorney general's office can help you. You'd be surprised how quickly a single call to the credit bureaus from your attorney general can turn things around. 

You can also hire an attorney to write a letter to the credit bureaus demanding the method of verification and making it clear that your dispute is valid and why. In the same way, you can have the attorney draft a letter to the collector and let them know that the account is beyond the federal reporting period and must be deleted immediately as re-aging accounts is a violation of federal law. The attorney doesn't have to represent you. He merely has a draft a few letters. Last I checked this ran about $30 per letter in my area. Prices may vary but if you can find a lawyer willing to do this its well worth it.  

If the attorney general can't or won't help, a lawsuit may be your last resort. You can sue both the collector (lawyers must abide by the FDCPA too, so they count as collectors) and the credit bureaus. You don't have to have an attorney, but having one helps you immensely. Even if you know the law inside and out, collectors will be more likely to give you what you want in an effort to stay out of court if they know you have an attorney and a good shot at winning the case. 

Best of luck to you,
Lee