topic Re: Identity theft during underwriting in Mortgage Loans

Identity theft during underwriting

Anonymous — Mon, 09 Mar 2020 15:01:33 GMT

I am in the process of buying my first home. We are doing a conventional loan and mid score is 777.

I get an alert this weekend that Verizon Wireless is reporting an account in collections on my TU report. This account was verified as fraudulent and removed from Experian and Equifax. Verizon also sent a letter to all 3 bureaus notifying them to remove it from reporting. Apparently TU did not get the memo and now they are reporting this fraudulent collection 3 weeks BEFORE CLOSING. We are in underwriting right now and I am in sheer panic. This is the only thing on my credit report that is causing an issue. I worked hard to get my scores where they are and now TU is doing nothing to help. I have to mail the documentation and proof and they kept repeating it will take up to 30 days for the dispute to the be removed.

I spoke to my mortgage broker and he said just try everything I can to get it removed since they do a soft pull before closing, but the documentation I have should be enough explanation for the undwriter if they question it.

Does anyone have ANY experience with this? I am freaking out and I just want to leave work to go home and cry. After all of my hard work saving and building my credit, someone has to come along and wreck the entire situation.

Re: Identity theft during underwriting

donkort — Mon, 09 Mar 2020 15:35:40 GMT

It was revealed that I had an old state tax lien from about 13 years previous to my closing---AT CLOSING.

I had to get back to my house, get the proof that the lien was paid, then proceed with the closing. Without that, they wouldn't continue with the closing. Luckily, I only lived about 15 minutes from where I was doing the closing.

I feel like you have "all your ducks in a row," so to speak. You have the documentation that it was fraudulent. Yes, they do want disputes removed before closing. I don't foresee problems, frankly.

Re: Identity theft during underwriting

Anonymous — Mon, 09 Mar 2020 16:29:05 GMT

I would have passed out hearing that. No one ever tells you how up in the air the entire home closing process is until you get into the nitty gritty of it.

I really hope you are right in my case. I made sure to have all of my ducks in a row, but of course someone had to throw this fun instance into the mix for me!

Re: Identity theft during underwriting

donkort — Mon, 09 Mar 2020 16:36:19 GMT

If you have the confirmation that this was fraudulent according to the other 2 bureaus, I would think that this is documentation enough.

Your Loan Officer told you that--am I right?

Re: Identity theft during underwriting

Anonymous — Mon, 09 Mar 2020 16:41:22 GMT

Yes both of them have removed it as fraudulent. I also have an identity theft report filed with the FTC as well as a letter from Verizon stating I am not responsible for this debt. I am still not sure why Experian & Equifax removed this but TU chose not to. I had called them to dispute it but it was not reporting at the time, so there was nothing to dispute. Of course, now it's reporting.

Re: Identity theft during underwriting

Remedios — Mon, 09 Mar 2020 16:51:40 GMT

@Anonymous Hi and welcome to the forums

Dont panic.

You already did direct dispute with Verizon (first step), and with TU previously(second step).

Because the collection account reappeared, go ahead and file a complaint with CFPB against TU for failure to perform reasonable investigation. You will need to upload supporting documentation (your letter) and whatever else you have.

Also, you need to claim monetary damages, because if that collection account stays, your mortgage tier may change.

I'd also file same complaint against collection agency if this reappearance is the result of them re-reporting this account

While filing a complaint is not a cure for everything, it can significantly speed things along, especially when monetary damages are claimed

Good luck and I hope you get this resolved quickly!

Re: Identity theft during underwriting

donkort — Mon, 09 Mar 2020 16:53:35 GMT

Should he "undispute" the dispute until closing----then reinstate the dispute after closing?

Re: Identity theft during underwriting

Remedios — Mon, 09 Mar 2020 17:00:29 GMT

Most clear cut disputes are completed prior to 30 days, so letting dispute play out is something OP can certainly consider.

If it takes them 2 weeks and it's not resolved, than complaint may not be resolved either in the remaining week.

If this was simple error on the CR, without mortgage on the picture, I would not interrupt dispute process.

No matter what OP does next (if anything), LO should be notified in advance, and wait for their response.

Re: Identity theft during underwriting

Anonymous — Mon, 09 Mar 2020 17:15:38 GMT

My LO advised me to do whatever I can to get this taken off of my credit report - but he did say if the issue comes up the documentation I have should be enough for the underwriter, as they underwriter already has a copy of my identity theft report.

I filed a complaint with the CFPB. If I do not hear anything in the next 2 weeks, my plan is to remove the dispute if it becomes an issue for closing.

Re: Identity theft during underwriting

Anonymous — Wed, 11 Mar 2020 05:39:57 GMT

I'd start threatening the collection agency, frankly. They can get this off immediately and with your letter from Verizon, they have no debt to collect. I'd also start leaning on Verizon to pull it back from collection. I had two random collections pop up during my mortgage process. One was from a medical provider who never billed me or my insurance and randomly sent it to collection 3 years later and one was a medical bill from my adult daughter that somehow popped on my credit. Both times, I was able to get the original creditor to pull it back off within 24 hours. The first one just ate the bill since it was their error/too late to bill insurance and the second one started actually billing my daughter.

Re: Identity theft during underwriting

Anonymous — Wed, 11 Mar 2020 13:15:51 GMT

I called Verizon since the collection is coming directly from them. The woman was downright rude and started yelling at me, saying they closed the account and it is no longer reporting to any of the credit bureaus. She told me that TransUnion is apparently way behind Equifax and Experian when it comes to reporting. So Verizon was unable to do anyting since they have already closed the account and notified TransUnion. This is why I feel that TU is in violation of something, since the original creditor has closed the account and marked it fraudulent.

Re: Identity theft during underwriting

donkort — Wed, 11 Mar 2020 13:35:46 GMT

I assume that TransUnion, by law, HAS to delete that account.

Re: Identity theft during underwriting

Anonymous — Wed, 11 Mar 2020 15:07:31 GMT

Unfortunately, TransUnion does not agree with this

They are claiming this account has been reporting as of January 31, 2020. Funny, as I applied for a mortgage loan between January 31st and March 6th, and it was not on my credit report until March 6th. The TransUnion rep AGREED with this as well, saying it did not show up on my credit report dated February 2nd and that she would "make a note of it in my dispute file".

I am hoping the documents I sent on Monday will be received today. Then wait another 5 business days for "processing"...

In the meantime, I drafted a letter explaining this ridiculous situation in the event the underwriter asks for it when doing a credit refresh. They already have my FTC identity theft report and the letter from Verizon Wireless, so I am trying to think positive and hope this all should suffice to explain the account.

Re: Identity theft during underwriting

donkort — Wed, 11 Mar 2020 15:10:41 GMT

Even if it's reporting----so what? It's a fraudulent account.

The other two bureaus saw fit to delete it.

I'm wondering if you can speak with a supervisor at Verizon, rather than one of the phone center workers.

Re: Identity theft during underwriting

Anonymous — Wed, 11 Mar 2020 15:15:05 GMT

I just got off the phone with Verizon's fraud department, and the rep stated that they sent a letter out to all 3 bureaus on February 6th, the same day they sent it to me. Which makes sense, because Eq and Ex deleted it by February 14th. TransUnion is in clear violation by not removing it and reporting this now. Verizon rep stated they can resend the notice to TransUnion again, but TU could possibly increase the amount of time for the dispute because, as he stated, "it would be typical of TransUnion to do this". Should I have them resend? My first thought was not to because I don't want to cause any more issues.. but now I'm second guessing myself.

Re: Identity theft during underwriting

donkort — Wed, 11 Mar 2020 15:58:57 GMT

I would talk to your loan officer about the conversation you had with the Verizon representative.

I wish you could have Verizon re-send the fraud notice.