Mortgage damages, what in the world are they? Well, I’ve been asked this before. In short, mortgage damage occurs when an applicant can’t get the mortgage deal they should have. What I mean by mortgage deal is getting the best rate or in some cases just an approval. Most mortgage interest rates are based in part on the applicants FICO score. If the applicant has credit errors on their report, the score generated would include these errors.

It’s very important to make sure the data reported by the CRA’s (Consumer Reporting Agencies) is accurate. If you notice inaccurate reporting, you should contact the creditor and the CRA’s to have the inaccurate information corrected.

Statistics Year to Date: Thru October

9060 total lawsuits for 2010, including:

• 8481 FDCPA

• 1002 FCRA

   

  Many of these cases would have benefited from having an expert credit / mortgage witness added to their team.  Chris McConville is available to assist in litigation support as well as an Expert Witness.  He can be reached at 724-784-0007.

   

I hear all the time from my customers how their FICO score costs them money.  This ranges from not getting the best interest rates all the way to not being able to get home owners insurance.  I must say, I was taken back the other day from a phone call I received.

As I was doing my normal work last week when I received a call that even made me think about how much we are slaves to our FICO scores.  I had a call from a young woman who asked me if I'd be willing to review her credit to see if I knew anyway she could get a higher score.  The call itself was normal as I get these types of calls everyday.  I asked her if she needed the higher score to buy a home, her reply was no.  I then asked her if she was trying to refinance and again, I got a no.  I then proceeded to ask her why she needed a higher score.  Her reply was a first for me in my 20 year career; she said she needed a higher score to save her life!

I found out that she didn't live in the best part of town and just two days prior to calling me her home was broken into.  She knew the crime rate in her area was high so in the past on two occasions she tried to get a security system installed in her home.  Two major home security companies turned her away due to what they called a "credit risk". Simply put, she didn't meet their credit profile.  She now lives in fear and has one simple goal, to get an alarm from a reputable company.  I agreed to review her credit and to create a plan that would get her credit score moving up.

This just shows one more way a low credit score can hurt you, in this scenerio "literally".

Fannie Mae has recently announced that if you purchase one of their current REO (Real Estate Owned) listed properties by April 30, 2010 you will get 3.5% of the purchase price to be used for new Whirlpool Appliances.  Many home buyers now can take advantage of the first time home buyer program (up to $8,000 cash back) with a potential bonus of all new appliances. 

I am sure much will be said about this in the months to come.  Many tax payers are already upset over the bailouts and tax credits that many would argue our grandchildren will be left to pay for.  My biggest fear is that the housing market is conditioning buyers to wait for more handouts. 

I have a client who received a letter from Bank of America (BOA) explaining what changes they should expect due to the CARD Act going into effect.   The letter went on to explain that BOA won’t be putting him into a default rate for being a few days late with his minimum payment.  He also went on to read that they will only raise his rate if the account goes 60 days or more past due.  After reading the letter, he asked me a disturbing question.  He asked "This new CARD Act law should help my credit scores since banks can now only report accounts that are more than 60 days past due, correct?  

The CARD Act DOES NOT replace or modify the FCRA.  The CARD Act, in part is intended to make it easier for you to manage your credit card accounts.  Please understand that if you fail to make your minimum payments by the scheduled due date that your credit score will be damaged.  Under the FCRA, if your creditors report your account to the credit reporting agencies, it must be accurate.   Any past due amount (even if you are not 30 days late) will hurt your score. 

As always, pay all your payments on time and do your best to keep your credit card balances to a minimum.  

I just noticed that over 500 credit related lawsuits were filed in the first 2 weeks of December (the slow time).  This just goes to show that the amount of cases being filed continues to increase.

Many of these cases can benefit by having an experienced credit expert witness at your disposal.  This holds true for both the plaintiff as well as the defense. I have plenty of experience with having over 20 years in the mortgage business, over 2000 funded loans, and over 15,000 credit reports analyzed.  I feel that my best asset as a credit expert witness is the fact that I deal directly with the consumer and lenders. By dealing directly with consumers, you really get a full understanding of how credit errors impact people lives. Please contact me if you feel my experience is right for your case.  

On August 19, 2008, the court approved a settlement in regards to part of the White, et al v. Experian Information Solutions, Inc.  As part of the settlement, Trans Union, Equifax and Experian all agreed to immediately update the class member’s credit reports to reflect “bankruptcy discharged” on all accounts that were included in their bankruptcy.  The three major credit reporting agencies also agreed to adopt new procedures for automatic updating in the future.   

This was a big win for people who were members of the class.  Even with this settlement, errors still occur.  I had in the last 30 days 2 clients who still had outstanding balances showing on their credit reports on accounts that they claimed were discharged in their bankruptcy.  These 2 clients were members of this class and the accounts that are listing a balance should be showing some type of notation that the accounts were discharged in bankruptcy.  I suggested to both of these clients to dispute the accounts with the credit bureaus and to be certain to include their list of creditors from their bankruptcy.  The Fair Credit Reporting Act (FCRA) allows consumers to dispute erroneous accounts listed on their credit reports in an effort to get any errors corrected. This just goes to show that the system is not perfect.  It is very important that all consumers view their credit reports regularly to ensure they’re accurate.  Under the Fair and Accurate Credit Transaction Act (FACTA) you are entitled to one free credit report per year (some states allow more than one) from each credit reporting agency.  I suggest you take advantage of this.  You can get order your free annual credit report at www.annualcreditreport.com.

After years in the making, this case finally has a proposed settlement.  The settlement is with the big three credit bureaus, Trans Union LLC, Experian Information Solutions, Inc., and Equifax information Services LLC.  The total settlement amount will be $45 million dollars.

In order to qualify in the class action you must have had a Chapter 7 bankruptcy discharged and have a credit report issued by one of the big three between March 15, 2002 and May 11, 2009.  For California residents the dates are May 12, 2001 to May 11, 2009 in the case of Trans Union.  The credit report that was issued during this time frame must have contained items that were such as accounts, judgments...... that were discharged in the bankruptcy but was not report as discharged.  I have reviewed thousands or credit reports during this time frame and I have found a high percentage of them did include these errors.

VERY IMPORTANT DATES:  If you qualify as being part of this class action suit, you must file a Claim form on or before November 30, 2009. 

You can get additional information as well as the claim form at www.bankruptcydischargesettlement.com.

While this is great for consumers, I believe the biggest benefits the consumers will receive will be having accurate credit reports.