Unrelenting Legal Support

Pinellas County Foreclosures Could Lead to Damaging Errors on Credit Reports

On Behalf of | Jul 2, 2018 | Consumer Protection

Many Tampa Bay–area homeowners are still suffering from the 2012 housing market crash. In 2013 in Pinellas County alone, 70,000 homeowners received foreclosure notices, marking the beginning for many of them of an arduous battle with banks and mortgage companies and a fight to repair their credit. A majority of those facing foreclosure had failed to keep up with their mortgages, but not everyone. As reported in the Tampa Bay Times, in one such battle, Tim and Carol Grundmann of Seminole were forced to sue their mortgage loan-servicing company when they received their foreclosure notice in 2013 despite having made their payments on time. And even though they’ve recently prevailed in that suit, the battle to repair their credit will likely continue for some time.

In 2011, Green Tree Servicing bought the couple’s mortgage from Bank of America (BOA), their original lender. The Grundmanns received a letter from BOA stating their account was current and they could continue making monthly mortgage payments to Green Tree. Their monthly mortgage payments, however, were not being applied correctly to their new Green Tree account, and the new mortgage servicer eventually filed a foreclosure action.

The Grundmanns countersued Green Tree, claiming that they had made their mortgage payments per their agreement and could prove this through cleared checks. After a lengthy battle between the couple and Green Tree (which changed its name to Ditech Financial during the legal process), the ruling favored the Grundmanns. Green Tree/Ditech was ordered to pay them nearly $250,000, which they applied toward the balance of their mortgage. Despite the ruling in their favor, however, the couple may need to spend months – possibly years – repairing the damage to their credit caused by the error.

Under the Fair Credit Reporting Act (FCRA), it is illegal for creditors to report inaccurate payment history information to the credit bureaus (Equifax, Experian, and TransUnion). In the case of a foreclosure, the creditor typically reports that a public notice of foreclosure (a judgment) has been filed and also reports the mortgage loan non-payments, and both reports significantly affect credit ratings. This action prevents other credit companies from issuing new credit accounts, and some credit card companies will close existing accounts or charge higher interest rates.

Although the Grundmanns won their lawsuit, it could take some time for their credit rating to rebound, since the process begins by initiating investigations through the credit bureaus. All creditors must verify their reporting and ensure that only accurate information about the person’s payment history is being provided. If a creditor fails or neglects to correct any inaccurate information, it is considered a violation of the FCRA, and there is cause for a civil action.

Frank Charles Miranda, P.A. can help clients handle disputes with credit reporting bureaus and take action against banks and mortgage companies who refuse to correct erroneous information that leads to a foreclosure action. Call us at 813-902-3925 or contact us online for skilled representation.