Difficulties Correcting Credit Report Errors

by Louise from Jacksonville, Florida

Ask Kate about correcting credit report errors and National Mortgage Settlement resources: Late mortgage payments. Collections. Robo-signing. Foreclosure. The National Mortgage Settlement. For foreclosed-upon homeowners like Louise, it's a nightmare getting credit bureaus to reflect the true picture. Louise asks how fix the errors. She also wants to know about assistance with homeownership offered by the National Mortgage Settlement.


Louise asks Kate About Credit Reports

Hello Kate, First time on your site, wealth of information, so I decided I would put you to the test!

1. I'm one of the unfortunate persons from a Saxon foreclosure.

My ARM was sold several times, only to find out through Congressman's office, all the companies that came under Saxon had interest rates that went up to 14%! They continuously refused to release information when trying to refinance before and during the ARM period.

Bank of America also was a mortgager. After they foreclosed, my Congressman's office advised me to walk away. Yes, I have all documentation that led to the nightmare.

I received the letter also that stated as a result of the Settlement we were to receive assistance with homeownership, as well as I was due funds. Yes, I was one that also had and have difficulty with the payments.

Question: What are our resources to obtain the help mentioned in the letters?

Louise asks Kate About Assistance with Homeownership

2. As a result, multiple incorrect information was put on my credit report. I'd send numerous letters to all three credit bureaus with documents. Info would come off. Then approximately 6 months later, it would come back on my credit report as a new account under a different collections company, particularly towards the end of the year, making it seem recent.

I'm dealing with being a recent Breast Cancer survivor with medical cost because of my employer's unfair labor practices. ADJ has accepted all claims and ordered them to settle. But in the meantime I'm back at square one with credit. My score was at 720. With loss of pay for two months, living on what I had in bank, and maxing my credit limit, my credit was seriously damaged.

Also when I purchased my home, I stated my pay. Irregularities made it impossible to finance the mortgage. So here I am again starting over.

Question: What kind of letters can I submit with all documentation to make University of Phoenix, BOA, and Saxon go away permanently? Yes, I'm willing to prove my documentation. I just want peace of mind for my family. I'm a single divorced parent with good steady employment.

Your input is greatly appreciated, I understand if it's a lot. I'm used to the disbelief until I provide documentation. Thank you. LB in Jacksonville, Fl.

Kate Answers: Difficulties Correcting Credit Report Errors

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Dear Louise,

Let's start with your second question, the one about correcting errors found in your credit history.

Due to the Fair Credit Reporting Act, you have the right to dispute erroneous and incorrect data in your file. But there are a few steps to take or as you mentioned, the errors will creep back into your life.

You can handle the process yourself or you can hire a firm to handle the process.

Do-It-Yourself Credit Repair

Let's say you choose the do-it-yourself path. The first step is to get your credit report. You need complete information from the major sources. Learn about the three major credit reporting bureaus, Equifax, Experian, and TransUnion. You are entitled to a free report from each, once a year.

Once you have the them, compare the accounts and account numbers. You will need to figure out which accounts with errors are duplicated under different account numbers, especially the collections.

Compose your dispute but don't send out one all-purpose letter. Customize the letter for each bureau, disputing the accounts specific to that bureau with appropriate account numbers.

If it's a paid collection that you are disputing, include the payment receipt with account numbers. Here is how to get the correct documentation when you pay off a collection.

Next, the bureaus will contact your creditors regarding your dispute. If the creditors do not respond, the bureaus must delete the entry in your file. Or you may be asked for more documentation to back-up your dispute.

A couple of months later, you will need to order another round of credit reports to monitor the progress. This is tedious work and rarely remedied on the first go.

Sometimes the same data will pop back up but under another account number, as you noted. If this happens, you should send another letter of correction to that specific credit bureau, noting the different account number.

Rinse and repeat until your reports finally have accurate information. Afterward, continue to monitor your credit once a year.

National Mortgage Settlement Resources

You are not the first person to ask about home buying assistance from the National Mortgage Settlement agreement and I'm a bit puzzled by the inquiries. I'm even more puzzled that the same letter offered no resource information.

What is the exact assistance the letter offers? If you could comment on this page with more information, I'll respond. (Follow the comment link at the bottom of this page to leave this information.) Meanwhile, I'll outline the assistance connected with the National Mortgage Settlement agreement that I'm aware of.

$25 billion for distressed borrowers, states, and federal government:
  • Loan modifications: $17 billion from servicers to modify mortgages and for principal reductions to 1st and 2nd liens.

  • Underwater mortgage refinances: $3 billion from servicers to help homeowners without equity secure today's low interest rates.

  • Payments to foreclosed borrowers: $1.5 billion from servicers to compensate foreclosed borrowers who lost homes due to the robo-signing debacle.

  • Payments to participating states: Funds for consumer protection and state foreclosure protection efforts.

  • Loan servicing reforms: Single point of contact to borrowers, uniform training, staffing, communication, and foreclosure procedures. (It disgusts me that it took a settlement agreement to require basic customer service!)

  • State Attorney General oversight of national banks: Oversight of national banks who will pay stiff fines for non-compliance with the settlement agreement.
In summary, the 25 billion results in loan modifications, principal reductions, refinancing to lower rates, and direct payments to foreclosed borrowers. States get direct payments to implement reforms. Banks are required to improve loan servicing and pay stiff fines for non-compliance, as overseen by state Attorney Generals.

But again, if the letter you received points to other assistance and resources, I hope to hear from you or anyone with this information.

Good luck and best wishes,

Ask Kate


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