Mortgage reporting increasing balance.

[redneck18]

I keep seeing my mortgage balance fluctuate, many times UP/HIGHER each month. I called my bank (local) and the lady said she could see the discrepancy between her records and what had been reported to the credit bureaus. She submitted something to correct it, which it did for that month, but the last two months it has reported it once again shows an increasing balance. This is negatively affecting my scores. Can anyone please advise what course of action I should take? I don't want to have to call the bank every month.

[stellar]

They are required to report accurate information. 

I would speak to upper management at the bank.  You can also dispute the inaccuracies via the 3 credit bureaus.

[Anonymous]

How new is your mortgage? 

What was the original amount of the loan?

What is the true amount owed? 

Could you give us the range for the amount owed as it appears on the last six months of your credit reports, say?

If you can tell us all that, it will be easier to assess whether the faulty reporting is really hurting your score.  (Just because your score is going up and down, that won't necessarily be because of the faulty reporting -- scores often do that anyway for other reasons.)

For example, suppose the loan was originally for 300k, the true amount owed is 294k, and it is fluctuating on the report between 293k and 303k.  That could be a real problem, since it would seem on some months as though you owed more than the loan was actually for.  I can imagine that FICO might penalize you for that (not certain, but I can imagine it).

But suppose instead that the true amount owed was 280 and it was fluctuating between 279 and 289.  Then the innacurate reporting really shouldn't be hurting your score.

I'm not suggesting that the lender should not be accurately reporting your loan, nor that you shouldn't keep on eye on it.  But if it turns out that it really isn't hurting your score, it may be best to see if the lender can fix the problem over the next 3-4 months on its own, now that you have made them aware of it.

It would also give you extra time to accumulate copies of your monthly credit reports, so that you'd have further proof.

[redneck18]

Thank you stellar, I haven't had the best customer service experience at this bank. I can't even seem to get my LO to call me back, ever. If it weren't in our plans to sell and move in the next two years I would probably refinance, but I've been told it just won't make sense in my situation. I'll attempt to call the bank one more time, but if it continues I'm not even sure disputing it on a monthly basis makes sense.

[redneck18]

CreditGuy, the reported balance has been higher than actually owed. The problem comes in when I make a payment, this amount goes up on the reports but in reality the balance at the bank is going down, as it should. It's a mortgage, not a LOC, so unless I were to miss I payment I can't imagine any scenario where the balance should go up. The reason I mentioned it affecting my scores is because it's in my "alerts" that my mortgage balance went up.

[Anonymous]

The text accomanying the alert tells you what the alertable event was.  Alertable events (for the myFICO Ultimate product, which I am guessing you have) include any time any balance for any account changes.

The text is not describing why your score changed.  It's just telling you what the event was.  Every time any account's balance goes up or down is an alertable event.  Here's a link to the various alertable events:

http://www.myfico.com/Products/FAQ_Alert-Matrix.html

The myFICO product pulls your score every time one of these events happens.  But lots of things could have cause the score change besides the actual event you see described in the text.

That said, I do think it is of concern that the bank's reporting errors are causing your mortgage account to occasional state that you owe more than the loan was originally for.  That could indeed be hurting your score -- as I say, I do not know that it would, but it is certainly plausible that it could.  By way of contrast, if you owed (truly) 92% of the original debt, and the bank was reporting 91-95%, I doubt that the error would be affecting your score at all.

It sounds to me like your mortgage is very new -- is that right?  Do you mind telling us when you took out the loan?

[redneck18]

The mortgage is 8 years old, current balance is 65% +/- of the original loan of 155k. However I currently have approx 55% equity, though I'm not sure that would play into it. The range is within 2% fluctuation, so not huge just frustrating for someone whose mind works in absolutes. Thank you for the detail on my alerts, and yes I believe that is the product I subscribe to.

[RobertEG]

If you have not become delinquent on the loan, then the loan balance part of your montly payment must decrease each month.

You have a clear error in reporting.

The remaining loan balance has some effect on your scoring, but it is not substantial.

The util of credit category weighs % util of revolving credit much higher than the % of orig loan amount of the current balance, but it does have a small effect.

If they consistently repeat the error, I would file a complaint with the CFPB for their clear lack of compliance with FCRA 623(a)(2), which mandates that updated reporting must promptly be made to accurately reflect the current balance.  That will compel a response on their part to the CFPB.......

[redneck18]

Thank you Robert. This is the answer I was seeking I believe and no I have not become delinquent.

[iv]

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@redneck18 wrote:
The mortgage is 8 years old, current balance is 65% +/- of the original loan of 155k. However I currently have approx 55% equity, though I'm not sure that would play into it. The range is within 2% fluctuation, so not huge just frustrating for someone whose mind works in absolutes. Thank you for the detail on my alerts, and yes I believe that is the product I subscribe to.

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By any chance, is the amount of the increase within the range of interest that is being paid on the loan each month?

If, for some reason, the bank is reporting your balance after calculating the monthly interest, rather than after crediting that months payment... (or doing both, and reporting more than once a month - then it would bounce up and down).