First, it is necessary to get a bit legal in order to understand the exclusion date(s) related to a foreclosure on a loan.
The exclusion dates for all types of adverse items of information is detailed in FCRA 605(a), and modified for collections and charge-offs by section 605(c).
FCRA 605(a) lists four specific types of adverse information (i.e., bankruptcies, civil judgements, paid tax liens, and collections/charge-offs)
in respective subsections 605(a)(1) through 605(a)(4).
All other adverse items of information default to the catch-all provisions of subsection 605(a)(5), which for obvious reasons does not provide an explicit definition of the begin date for its stated 7 year exclusion provision. All that is stated is that the adverse item of information must be excluded after 7 years from the occurence of the adverse item under consideration.
Reporting of a foreclosure or of a reposession does not have its own explicit subsection, and thus defaults to the catch-all provisions of subsection 605(a)(5), with no clear and explicit statement of the begin date of its 7 year exclusion period.
The logical interpretation is that exclusion of a foreclosure must occur once the date of foreclosure antedates the currrent date by more than 7 years.
However, other considerations also come into play.
If the credit report also includes the reporting of a monthly delinquency, that separare reporting must be excluded no later than 7 years from the initiation of the delinquency, and if the account remains delinquent upon reaching 7 years, the current status is prevented from continuing to report as adverse after its own period of 7 years. With no way to simply exclude a current status, that results in the exclusion of the entire account.
If the loan was foreclosed and reaches 7 years from initial date of delinquency but is still unpaid, FCRA 605(a)5) prevents continued reporting of a delinquent status after 7 years from the DOFD, and thus the entire account is excluded.
However, if the loan was foreclosed but paid, it no longer has any adverse current status, and the foreclosure per se would become excluded after 7 years from the date of foreclosure, and if monthly delinquencies were also reported, they would become excluded after 7 years from intitial date of delinquency, leaving the reporting in the credit report, but without any derogs showing thereunder.
