Double reporting on discharged mortgage?

[LieslMet]

My husband's loan with Bank of America (formerly Countrywide) for our home was discharged through Chapter 7 in June 2013. Over the summer, OCWEN took over... but BOA was paid out by FHA ("Full Claim") and sent a letter stating they no longer held an interest in the property. I assume this means that Ocwen holds the loan. 

Last month, I noticed that OCWEN reported that Husband was $47K past due and was in pre-foreclosure. He disputed this information and said that it was included in Bankruptcy Ch. 7. They did change it this month, to report as included in bankruptcy but it still shows as pre-foreclosure. 

Legally, I know this is not true because they haven't filed a lis pendens. 

Regardless, can Ocwen be right in reporting a discharged debt at all? BOA reports it as well, showing as (rightfully) "Included in Bankruptcy." I accept that foreclosure will appear on Husband's CR once it's complete but isn't that only supposed to happen as a public record, not as a new, reporting line among discharged debts?

And did he dispute wrongly by asking for the debt to be listed as IIB and now can't get it removed? Is there a wait time between disputes for the same tradeline? If anyone looks at his report, it appears to show that he included two mortgages in his bankruptcy.

[SoulMaster]

This is all a mess, but I'm going to do the best I can.  You may just want to go get an FCRA attorney to deal with all this for you (your BK attorney is also a good choice).

First off, and as an FYI - "Pre-foreclosure" just means 120+ days late.  It doesn't mean they've filed a lawsuit (lis pendens = lawsuit pending) quite a few states don't even require a judicial foreclosure.  So, pre-foreclosure is a perfectly valid status. (However, see below)

Secondly, if you want to keep your home, Ocwen is probably the best bank to get a principal reduction from, but that's beside the point.

IMO (and I'm not an FCRA lawyer/paralegal) - The BofA loan should be reporting a $0/IIB/Closed, the Ocwen TL should NOT be reporting at all... you don't owe them any money and never did.  They do, however, own the lien that's attached to your house.  (This is why I think you need to talk to an attorney. FCRA attorneys are 100% free, if you have a case.  They get you free money, too.).

Finally, the foreclosure may or may not ever appear on your CR.  It depends on your state.  BUT, Ocwen is also good @ short selling, and you can avoid the PR all together by executing a short-sale or deed-in-lieu, and a SS should never appear on your CR b/c the debt was discharged in the BK... so it cannot also be "settled for less than the amount owed" which is how a SS/DIL would report.

Seriously, if you want to do anything I suggested (SS/LMOD/FCRA fight) get the right attorney... it'll probably wind up a nightmare of frustrations if you don't.

-SM

[LieslMet]

I didn't know they were free, thanks! Real estate lawyers around here are idiots. I've called/e-mailed multiple times for various related issues and they all say to pay them a $5000 retainer and they'll see what can be done. Erm, no. Husband's BK was the best I found - you know, actually capable of spontaneous critical thinking - but he literally does nothing else. 

We're in NY, a judicial-foreclosure state, and Ocwen has stated that they intend to pursue foreclosure and will accept nothing less than full payment as an alternative to foreclosure. No D-I-L, no short sale. For what reasons, I have no idea. So basically, we'll be here for a few years, at least.