Non recourse second reporting 3 years after foreclosure

[eieioeldo]

DH and I owned two homes between us after marriage, and long story short could only afford one.  Tried to mod, and all that, but ended up in foreclosure.  Honestly we were hoping to turn it into a rental, but the banks were not interested in working with us.  

The home had two mortgages, a first and second, both purchase money.  Here in Cali they are non-recourse, meaning they can't sue me, and I don't owe taxes on the forgiven debt.  The first loan shows lates up to NOV 2009, then closed.  Second loan is Ocwen Mortgage and reports 120+ days past due every month, still.  I'm not entirely clear on the reporting requirements, and I've seen some discussions here about settling.

My questions:

Can the second continue to report late every month, or should that account be shown as closed after the foreclosure?  How can I make them report it differently?

I know how the non-recourse protects me; if I offered to settle with a PFD would I forfeit that legal and tax protection?

Has anyone else had luck with Ocwen on this?

[eieioeldo]

anyone?

[p-]

bump - any comments?

[eieioeldo]

Thanks for all the help.  So, here's a copy of the dispute letter I sent to all 3 CB's.  Any suggestion's appreciated.

RE: REPORT #*********

To Whom It May Concern:

After closely examining my Transunion Credit Report numbered *********, I have discovered the following account is reported incorrectly:

OCWEN ....

Account number: *********

Date opened: *********

On ********* a deed of trust # 2********* was recorded by the ********* County Recorder for the purchase of a home.  The account referenced above provided Purchase Funding as a second mortgage.

On ********* a trustee sale occurred, document # ********* recorded by the ********* County Recorder.  This was a foreclosure action for said property.
Pursuant to Cal. Code Civ. Proc. § 580b, in California, purchase money loans made on a home are non-recourse. (Roseleaf Corp. v. Chierighino, 59 Cal. 2d 35, 41 (1963) and Spangler v. Memel, 7 Cal. 3d 603, 610, and 612 (1972).) A "purchase money" loan is one where the money went from the lender, to escrow, and then to the seller or to pay purchase closing costs.  If the second mortgage was taken out at the time of sale and was used as purchase money loan then it is a non-recourse loan (Brown v. Jensen, 41 Cal.2d 193 (1953), (Foothill Village Homeowners Ass'n v. Bishop, 68 Cal. App. 4th 1364, 1367 n.1 (1999).)

Pursuant to Cal. Code Civ. Proc. § 580b, this loan is a non-recourse purchase money loan, and the ONLY recourse available is foreclosure.  Following the foreclosure action on *********, this debt is EXTINGUISHED.  Reporting this as an open account and/or an account with a balance is incorrect.
Please remove this item from my credit report.  

I would appreciate your prompt response to these issues.  Thank you in advance for your assistance.

Sincerely,

Me

[Lel]

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@eieioeldo wrote:

Thanks for all the help.  So, here's a copy of the dispute letter I sent to all 3 CB's.  Any suggestion's appreciated.

RE: REPORT #*********

To Whom It May Concern:

After closely examining my Transunion Credit Report numbered *********, I have discovered the following account is reported incorrectly:

OCWEN ....

Account number: *********

Date opened: *********

On ********* a deed of trust # 2********* was recorded by the ********* County Recorder for the purchase of a home.  The account referenced above provided Purchase Funding as a second mortgage.

On ********* a trustee sale occurred, document # ********* recorded by the ********* County Recorder.  This was a foreclosure action for said property.
Pursuant to Cal. Code Civ. Proc. § 580b, in California, purchase money loans made on a home are non-recourse. (Roseleaf Corp. v. Chierighino, 59 Cal. 2d 35, 41 (1963) and Spangler v. Memel, 7 Cal. 3d 603, 610, and 612 (1972).) A "purchase money" loan is one where the money went from the lender, to escrow, and then to the seller or to pay purchase closing costs.  If the second mortgage was taken out at the time of sale and was used as purchase money loan then it is a non-recourse loan (Brown v. Jensen, 41 Cal.2d 193 (1953), (Foothill Village Homeowners Ass'n v. Bishop, 68 Cal. App. 4th 1364, 1367 n.1 (1999).)

Pursuant to Cal. Code Civ. Proc. § 580b, this loan is a non-recourse purchase money loan, and the ONLY recourse available is foreclosure.  Following the foreclosure action on *********, this debt is EXTINGUISHED.  Reporting this as an open account and/or an account with a balance is incorrect.
Please remove this item from my credit report.  

I would appreciate your prompt response to these issues.  Thank you in advance for your assistance.

Sincerely,

Me

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I'm not certain that this is going to work.  Technically, the problem is that your second loan is not reporting correctly - it is reporting as open as opposed to closed.  It "belongs" on your credit report because it is, in fact, a loan that you had with Ocwen.  The letter you sent clearly states that this was an account for which you were responsible, so there isn't any grounds to completely remove the account.

Disputing with the credit bureaus as opposed to the lender also may only result in a short-term solution.  Even if the account is removed at the credit bureaus, Ocwen is going to send the same information to them on a regular basis.  So it may reappear, with the same incorrect status.  Think of it as like one of those clocks that automatically synchronize with the national atomic clock every day.  Even if you change the time at home (analagous to changing the reporting at the credit bureaus), the atomic clock (Ocwen) is going to send its information and undo what you have done.

I would suggest contacting Ocwen directly and requesting that they update their reporting to closed. 

[p-]

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@Lel wrote:

I'm not certain that this is going to work.  Technically, the problem is that your second loan is not reporting correctly - it is reporting as open as opposed to closed.  It "belongs" on your credit report because it is, in fact, a loan that you had with Ocwen.  The letter you sent clearly states that this was an account for which you were responsible, so there isn't any grounds to completely remove the account.

Disputing with the credit bureaus as opposed to the lender also may only result in a short-term solution.  Even if the account is removed at the credit bureaus, Ocwen is going to send the same information to them on a regular basis.  So it may reappear, with the same incorrect status.  Think of it as like one of those clocks that automatically synchronize with the national atomic clock every day.  Even if you change the time at home (analagous to changing the reporting at the credit bureaus), the atomic clock (Ocwen) is going to send its information and undo what you have done.

I would suggest contacting Ocwen directly and requesting that they update their reporting to closed. 

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I think in CA if the debt holder reports incorrectly, you can sue, but I imagine you probably have to notify them first.  Maybe a cease and desist via CMMR?