Where to start?

[Lucid08]

Hi all!

During the process of helping a friend of mine get her credit established, we found out that the reason she was turned down for an auto loan in Oct. 2009 - was because they cited a recent delinquency on a loan. She was adamant that she has -never- been late with any payments on her mortgage(her only TL), so we sent off and got copies of all 3 of her free annual credit reports. Sure enough, there is a 30-day late showing for the month of  August(listed as 30-days late as of Sept. 2008).

We contacted the mortgage company(Century 21 Mortgage) and talked to a gentleman in the collections department and he stated that her August 1st 2008 payment was indeed late due to not being received until Sept. 6th. Her payments are due on the first of each month, and at this time she was sending her payments via postal mail using checks paid from her local banks checking account. After contacting her bank and researching this issue, we can now prove beyond a doubt that her August payment was indeed processed on August 6th, and that the check actually cleared the bank that same day. So apparently there was a data entry, or some kind of clerical error on the part of the mortgage company. The gentleman we spoke with in the collections department was kind of rude when we asked how we could get this corrected if it was determined that they were in error, and he stated that they do not do "courtesy corrections" of  information reported to the CB's.

We have positive proof that her payment was sent, received and processed well before the date that they claim the payment was processed, and we even went so far as to get copies of the cancelled checks/statements for the 3 months before, and after the payment was supposed to have been late(June thru November payments). Every payment during this timeframe was received within a few days of her due date, proviong that she was never late during this timeframe.

Seeing as the mortgage company stated that they are not in the habit of doing these "courtesy corrections", are they obligated under the Fair Credit Reporting Act to remove this 30-day late since we can prove that they have reported this to the CB's in error?

What are the correct steps that we need to take to get this 30-day late removed from her CR's?

[guiness56]

If she can get a letter from her bank detailing all of this information and addressed to the mortgage company  have her send it, along with a letter disputing the late, to the mortgage company.

If it can be proven the mortgage company is in error, yes they have to remove it.

After all of this has been done and if they still say it was late, file complaints with the BBB, FTC and her state AG office.

[Lucid08]

Thanks Guiness56.

Couple of questions:

So the cancelled check and bank statement will not suffice as proof? After looking at the check( a photocopy obtained from her bank), it plainly states in the memo line "August Mortgage payment".

Also, is the bank required to give her such a letter? If not, and they are unwilling to provide one, would a dispute using the cancelled check/statement information be compelling enough legal grounds for them to remove the late?

Should we send everything CMRR to start/maintain a paper trail?

::edited for clarity::

[guiness56]

If the cancelled check clearly shows it cleared her bank before 6 Sept, it should be ok.  There should also be a stamp of when it was deposited in the mortgage company bank.

No, the bank is not required to do anything but, if they would it would make her life easier.  The letter along with the check is more than enough proof.  If they won't give it to her, the cleared check will have to do.

In this case, yes, I would send it CMRRR.

[RobertEG]

Yes,the FCRA covers you!

Here is what I would do. 

I would not continue any oral arguments with them.  I would step it up, and send then a formal, legal dispute that they must answer within 30-days.

This is a perfect case, in my opinion,  for using the new "direct dispute" process under FCRA 623(a)(8), which took. legal effect as of  7/1/2010. 

Dont dispute through the CRA.   Rather, I strongly suggest that you dispute directly with the OC.  You now have a legal process to compel them to respond

(As an aside, the OC reps' statement that your concerns were nothing more than a request for a "courtesy correction" is both ignorant and insulting.  Your dispute was of substance based on THEIR improper reporting.  It might not hurt to somehow insert that arrogant statement to you in your statement of your dispute.)

For your convenience, here is a legal-frameworki sample letter to fill in..  it addresses each of the requriements of FCRA 623(a)(8)(D)...........

"This is a direct dispute with you, under the provisions of FCRA 623(a)(8), of your inaccurate reporting of information to my credit file, regarding the following account with you:

        (provide account identification information)

"This direct dispute is accompanied by the following documentation, as requried under FCRA 623(a)(8)(D):

       (identity the specfic information being dispute)

       (explain the basis of the dispute)

      (include all supporting documentation)

"Having provided the reasons and basis for this dispute, and having supplied the necessary documentation in support therof, it is your duty, under the provisions of FCRA 623(a)(8)(E), to conduct a full investigation of my dispute, and complete your investigation, and to report the results back to me in writing within 30-days of the date of this dispute.

"If your investigation finds that the information was reported inaccurately, in addition to reporting those findings back to me, you are are also requried to promptly notify each credit reporting agency to which you have reported this information to delete that inaccurate information from my credit file."

[Anonymous]

I work in the home mortgage industry and get calls like this occasionally. All you need to do is send in a copy of the bank statement and check with a letter explaining why you are sending them and the cash dept will research it. It can take up to a month, so don't expect quick results. If it turns out to be the banks error, it will be corrected with the credit bureau as well as the account information.

Also, I don't know about the mortgage company your friend is with, but with mine, it doesn't matter what is written on the memo line. That is for the customers sake. It could say that the check is for Santa Claus and the check will still be cashed for your monthly mortgage payment.

[fuzzy-bear]

RobertEG, this is the first discussion that I have heard on the Direct Dispute issue and would like to hear more of your thoughts on this, I had thought it was part of the Sen. Udall amendment but I did not know if it stayed in the final bill until your post (this is great news in the sense of FAIRNESS to both sides of reporting or mis- reporting issue.

[RobertEG]

The Direct Dispute process was actually enacted into the FCRA back in 2003 by the addition of section 623(a)(8).  However, the law required that  implimentation would not become effective until final implementing rules were published by the federal banking agencies.

Those final rules were published at 3184 Fed Register, Vol 74, No. 125 on July 1, 2009 with an implementation date of July 1,2010.

The law itself was not recently amended.  It is the implementing rules that brought about its effective date.

If you are interested in how it works, that Fed Reg notice gives a good overview.

[Lucid08]

Robert,

Here is a copy of the letter that I drafted, using the FCRA portion of your above referenced letter. Let me know how this sounds:

Date: August 16, 2010, 2008

Regarding: Account No.
Century-21 Mortgage
Collections Department
PO Box XXXXXX
Somewhere NJ, XXXXX

To Whom It May Concern,

            I am writing to you about a recent finding on my credit report(s) that has me expressing a mixture of being grateful, along with a pressing request for a correction of an item that you have placed on my credit reports.

I received my home loan from Century 21 Mortgage in 2007, and wanted to express my heartfelt gratitude in how my account has been handled by your company thus far. All of my customer service experiences with your company have always been pleasant and handled in a professional manner, and I have faith that my following issue will be handled just as promptly:

A recent review of my credit report(s) shows that your company has a 30-day late listed on my credit report(s) for the month of September in 2008. A telephone call to your collections department verified that the September late was placed on my credit report(s) due to your company claiming that you did not receive the August 2008 payment until September 6 2008.

Upon researching my own records, and after consultation with my bank, I have determined that my August 2008 payment was indeed sent, received and processed by  you on August 6, 2008. I have a copy of cancelled check #1003, along with my bank statement clearly showing where the check cleared on August 6th, 2008. This indicates that there must have been some clerical error on your part, as the conversation I had with “Michael” from your collections department indicated that the payment was not received until September 6, 2008.

This is a direct dispute with you, under the provisions of the FCRA 623(a)(8), of your inaccurate reporting of information to my credit files, regarding the above referenced account number.

This direct dispute is accompanied by the following documentation as required under FCRA 623(a)(8)(D):

-A copy of my Transunion, Equifax and Experian credit reports detailing the incorrect reporting of the 30-day late on my credit report(s) for the month of September 2008.

-A bank certified copy of cancelled check #1003, written July 31st and processed by your bank on August 6, 2008.

Having provided the reasons and basis for this dispute, and having supplied the necessary documentation in support therof, it is your duty, under the provisions of FCRA 623(a)(8)(E), to conduct a full investigation of my dispute, complete your investigation, and to report the results back to me in writing within 30-days of the date of this dispute.

If your investigation finds that the information was reported inaccurately, in addition to reporting those findings back to me, you are are also requried to promptly notify each credit reporting agency to which you have reported this information to delete the inaccurate information from my credit file(s).

I am sending this dispute via certified mail to ensure that you receive it.

Respectfully Submitted, 

Jane Doe

123 Anywhere St.

Anywhere USa, 12345

[RobertEG]

Good letter!  I have only one suggestion from a compostition point of view.  I would move the paragraph "This is s direct dispute under FCRA 623(a)(8) ...."  up to the top of your letter.  Let them know right up fron the reason for the letter, without having to read half of it without even knowing why you are writing.