Identity theft during underwriting

[Anonymous]

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. 

[donkort]

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.

[Anonymous]

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!

[donkort]

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?

[Anonymous]

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.

[Remedios]

@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! 

[donkort]

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

[Remedios]

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. 

[Anonymous]

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. 

[Anonymous]

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.