Would October 2009 be considered first month of deliquency?

[Anonymous]

When does the time start as far as the 7 year mark when negative items fall of? If I were 30 days deliquent in Oct 2009, would the 7 year mark be 7 years after that???? or date it was opened???

[RobertEG]

I presume that you are referring to the date of first delinquency (DOFD), which begins the 7 year plus 180 day running of the exclusion period for a collection or charge-off.

FCRA 605(c) and 623(a)(5) set the DOFD as the date of commencement (begn) of delinquency that immediately preceded the charge-off or collection referral.

That is the billing due date of the payment that first became delinquent, and the accunt remained delinquent until the charge-off or collection.

It is not the date of the first reported delinquency.

A delinquency is not reportable to the CRA as a 30-late until the delinquency reaches 30 days past the billing due date.

The account, however, became delinquent as of the billing due date.

The DOFD is thus 30 days prior to the reported 30-late.

Additionally, the creditor is not required to report the first 30-late.  They can delay reporting of a first 30-late for months after the account first became delinquent.

For that reason, the CRAs cannot determine the actual DOFD by using the payment history profile reporting of the first 30-late.

For that reason, the FCRA explicitly requires the creditor or debt collector to separately report the actual DOFD to the CRA within 90 days after reporting of a collection or charge-off.  See FCRA 623(a)(5).

[Anonymous]

I have an add on question.  I have a second mortgage account that was 1st delinquent in Oct. 2008, I never made a payment again until the house was short sold in Jan 2011, I was required to pay $3K at closing of the house sale.  However, they added the unpaid interest from 10/08 to 12/2009 to the loan balance.  Therefore, they are showing the date of 1st delinquent as 1/2010.  Is this correct?

[RobertEG]

Date of first delinquency is defined under the statute (FCRA 605(c) and 623(a)(5)) as the date of commencement of the delinquency, meaning the date it began.

Numerous legal and FTC decisions have clearly established commencement of delinquency to mean the date the delqinuency began and the debt remained deliqnuent up to the point that the debt was either charged to profit and loss or referred for collection.

Increase in the amount of delinquency does not overcome the delinquency status at any ooint, it simply increases the level of delinquency.

Thus, it would not reset the DOFD.

I assume that the relevant derog related to a reporting of a DOFD is their reporing of a short-sale?

[Anonymous]

Would it matter that there was a "loan modification"?  We agreed to add the missed payments and interest to the loan amount and increase the amount of the payments due.  However, we did this mainly to avoid foreclosure and again never actually sent them any money.

Can you point me to the FTC decisions that I can cite.  The Derog is the short sale but if 10/08 is the orig. date then it falls off very shortly versus 1/2010.  I've written letters to BofA and disputed it with the CRA's to no avail. 

[RobertEG]

Staff opinion letters regarding interpretation of hte FCRA are found on the FTC web page.

The use of what is now called DOFD was added to the FCRA back in 1997, and was followed by a seriies of advisory opinions providing legal interpretation of the provisions of newly-added sections 605(c) and 623(a)(5).

While FTC staff opinions are not citable as legal precedent, in this case, all subsequent case law has affirmed the opinions issued by the FTC regarding interpretation of DOFD.

The three main decisions of interest are:

Advisory Opinion to Juhnson (8-31-98)

Advisory Opinion to Kosmerl (6-4-99)

Advisory Opinion to Amason (2-15-00)

[RobertEG]

Be aware that unless the derog under consideration for exclusion is either a collection of a charge to profit and loss or its equivalent, then DOFD does not apply.

If the credit report includes only a showing of monthly deliqnuencies, then DOFD is irrelevant, and is not even required to have been reported to a CRA.

I would not get into an argument about interpretation of DOFD unless it has relevance.

[Anonymous]

Robert,

Thank you so much for the information.  The account was charged off so the DOFD does matter.