12-26-2012 01:20 PM
Long story short, my ex-husband went out for milk one day in 2008 and never came home. He's not dead, he just left, with all the money from the bank accounts and the escrow account and of course none of the bills. The house was foreclosed on 1/2010 (After I fought the good fight for two years trying desperately to save it). It was an 80/20 loan through Saxon on an arm. My credit report says that the first mortgage is settled for less than owed. However, about 6 months after the foreclosure, OCWEN loan servicing showed up on my credit report. They are reporting the second mortgage as a real estate loan, that I owe $30,168 (The total of the second mortgage) and that I am $16,000 behind. They are reporting the account as open and active and 120 days late. They report this once every three months. So basically I'm 120 days late x 3 years. And they do not have the date of last activity noted on the account which would have been July/2008 (I started the loan modification process). Can they do this? Don't they have to charge off this account at some point? They don't call me, they don't send me letters, they don't do anything except report this account as 120 past due on my credit report once a quarter. Should I just dispute this? I wonder if they have any proof of this account because of what appears to be an incorrect and kind of shady way of reporting it. This is the only thing holding up my credit score. Before my ex-husband came along my credit was outstanding and the only scar on there is this foreclosure. My scores are - TU: 557 EX: 643 and has pretty much been in that same place for over 2 years. I 've heard OCWEN can be very difficult to deal with.
12-26-2012 03:51 PM
There is quite a bit of debate about the legality of them reporting it as open. A lot of it depends on whether you are in a non-recourse state or not. What state are you in, and is this the original purchase money loan?
If you are in California, and it is purchase money, then they can not sue you for deficiency. In California, case precedent states "for a purchase money mortgage or deed of trust the security alone can be looked to for recovery of the debt." That means that if the primary lender foreclosed on the security (the house), then the secondary lender is SOL as far as collecting goes. They can't sue you, as long as it is a non-recourse purchase money loan.
But here's where it gets sticky; Ocwen recently settled a class action in California in which they were accused of misleading billing practices because they were still sending bills to people who had been foreclosed upon, and allegedly threatening legal action even though they would not be allowed to under the law. It stands to reason that if the security is removed, the debt is extinguished, and that is the argument being used by those suing to stop the reporting.
However, another superior court judge recently dismissed a case in which Ocwen was being sued for reporting the account as open, even though it had been foreclosed. Ocwen's position was that they may not have the right to sue, but an agreed to debt had not been paid and they were not reporting incorrectly. The judge agreed with them. The last time I looked at this, the second case was being re-filed a little differently. I'm not sure if or how that panned out... but if precedent is set (instead of the case settling) it will have implications on your future ability to get this removed through legal action.
In California it appears that a foreclosure of a purchase money loan on a home means that any further payment is voluntary. Voluntary, meaning they can't make you pay. By extension, any attempt to collect a debt is an attempt to make you pay. But, the debate is still open as far as whether reporting you delinquent is a collection activity, or an atempt to make you pay. We both know why they are doing it - they want to ruin your credit and make you pay. But they will claim they are just reporting the facts of an open account.
If you are in a non-recourse state, your first course of action would be to dispute this with all 3 CB's, in writing by mail, stating that the home had been foreclosed and the account is closed. If possible, go to your local county clerk and get a copy of the papers showing the foreclosure and the lender's loss of security. Include that in your letter to each of the CB's, and ask that the account be deleted, or updated to show closed as of the date of foreclosure. Ocwen should not verify it as open.
If that doesn't work, your best bet is likely to seek legal assistance. You might be able to find an attorney to take it on contingency. But be warned; the final word on this has not yet been set down by the court. The security is gone, and by extension the debt is gone, but Ocwen has a justifiable argument for reporting, if not one for collecting. Your attorney will have to know their business.
If you are in a state that does not have non-recourse protections, don't poke the bear. Ocwen could decide to pursue a judgement against you.
Remember, I am not a lawyer. I don't even play one on TV.. so you should do some homework about the details of your loan and your state laws before following any of my amateur advice. I only know some of what is going on in California, and other state's courts might see it completely differently.
12-26-2012 09:18 PM
I also have an issue with OWCEN, and they are impossible. We filed bankruptcy in Feb 06, and we lived in our home then. The loan was through Litton. However, at some point they sold to OWCEN. We made our payments, on time, and sold the house in late 09. Now, OWCEN reports the same account twice, one as a positive TL, the other as IIB, which is a negative TL. We never included the account in bankruptcy, but I assume they got the notifications as all of our creditors did. However, we continued paying, and paid in full when the house was sold. In the past few years, I have filed multiple disputes, wrote many letters, etc, and nothing has worked. I called OWCEN, and using ssn#, address, account number, etc the rep could find NO record of us at all. We are currenly in underwriting on a new loan, so after that is over I am going to report them to the CFPB. I did this recently on another double reported account, and it was deleted in a week. Just can't mess with the credit at this time. Good luck!
12-27-2012 06:47 AM
Yes it was purchase money and unfortunately I live in a recourse state (Louisiana) which gives OCWEN 10 years! to pursue legal action against me. I was figuring that there wasn't much I could do. They are reporting it as a HELOC which of course it wasn't. I contacted one attorney and he just wanted me to file for bankruptcy (lazy way to make a quick $1500) I just don't understand how they can keep reporting it as open and delinquent after 4 years of no activity. And they bought the loan after forclosure, so they basically bought a junk debt that they are hoping to collect on. I guess I will have to figure out a way to settle with them, which I'm sure I can do for pennies on the dollar. I really don't want to wait another 6 years to be able to buy another house.
12-27-2012 08:30 AM
Ouch... If you're in a recourse state, they could file on you any time during SOL... they almost certainly will before the time is up. They didn't buy it just to sit on it. I'm sorry to hear that you're in such a tough position. It would be smart to save as much as possible, then approach them with a settlement offer. Alternatively, you could put your savings in a protected account, like a Roth IRA, and keep quiet. If they get around to suing you, then you can withdraw your contributions (not your earnings) penalty free and use it for a settlement. Of course that means living with the knife over your head for ten years...
You should take a hard look at the total amount, compared to your income and determine if it's reasonable to think you can save up a good nut for settlement. If you can't, bankruptcy protection might get you clear sooner. Imagine if they sued you in year 9... The judgement would then be on your CR for another 7 or so.
Jandj80, if I were you I would find a lawyer to take yours on contingency and sue. Why not spank them for screwing you?
12-27-2012 12:57 PM
Thank you for the advice. I can save enough to settle with them, so I think that is the way I will go.
12-28-2012 10:01 AM
Yeah I have had a few I likely could have sued. However, I have found that the CFPB really works well, and I got that other double reporting deleted. I have a friend who is an attorney, so maybe when this house loan closes I will look into it. I am fit to be tied with them, and have put in a lot of time and energy to fighting this legitimate inaccuracy to no avail. I would like to 'spank' them haha.
06-03-2013 09:44 PM
I am uncertain which state you live in. However, I would recommend reaching out to an attorney for legal advice. The internet is filled with outdated and incorrect information pertaining to foreclosure.
I contacted several GA Real Estate attorneys and most were gladly willing to provide a legal opinion without a fee. For GA, the consensus is the SOL for my personal situation has expired and at this time the Lender can't pursue legal action to collect the balance of the second mortgage.
It was noted that if I was to resume payments; this action would reaffirm the debt and renew the SOL including all of the interest that would have accrued. Specifically, one attorney strongly recommended that I "put down the stick" and simply allow the debt to run its course in terms of credit reporting.
06-28-2014 08:16 PM
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