6 Years After Missed Payment

casey4383

LoanSafe Member
Apr 20, 2011
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0
6
Ok in Alabama over 6 years ago I missed a payment on our home. We had an 80/20 loan both originally through country wide. The 20 is a jumbo. Foreclosed 5 years ago this past Sept. The foreclosure then reported for one year from that date after that it stopped reporting on the first mortgage! It still reports every single month on the balloon. So credit score can't get above 630. The "released" that in 2015, Feb but of course that isn't listed as settled just released. How long can they keep reporting. Balloon payment originally was supposed to "end" or balloon or whatever 11/2020. Any insight is appreciated. Every lender or lawyer we talk to seems perplexed.
 

Moe Bedard

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Sorry for the late reply here.

According to the Fair Credit Reporting Act (FCRA), I believe they can report on the 2nd mortgage account for up to 7.5 years from the date of first delinquency. But as you said, it is not reporting correctly.

You will need to dispute the reporting with the creditor to see if they will change the reporting. You can write a letter and send via certified mail. If they do not fix it, you can send a letter to all three credit bureaus, Transunion, Equifax, and Experian and ask that they report it correctly.

Here is a free copy of a credit repair dispute letter that you can modify to use:

Dear Credit Bureau,

This letter is to inform you of issues regarding my credit and your reporting methods that are negatively affecting me at this time.

I was informed after applying for a loan that my credit scores were too low and was denied the loan because of these credit issues. After requesting the credit reports and reviewing them extensively, I had noticed an error.

This error I feel are due to mistakes by your bureau and I and requesting that the error be corrected as soon as possible.

The following accounts has the reporting error.

I am requesting that this account be verified by your firm. Please forward me all applicable information in regards to the account.

Including but not limited to:

  • The name and current address of the party
  • Account number
  • Method of verification
  • Reported 1st delinquency
I appreciate your time in responding to this matter.

Respectfully,

[Name]
 

casey4383

LoanSafe Member
Apr 20, 2011
32
0
6
Sorry for the late reply here.

According to the Fair Credit Reporting Act (FCRA), I believe they can report on the 2nd mortgage account for up to 7.5 years from the date of first delinquency. But as you said, it is not reporting correctly.

You will need to dispute the reporting with the creditor to see if they will change the reporting. You can write a letter and send via certified mail. If they do not fix it, you can send a letter to all three credit bureaus, Transunion, Equifax, and Experian and ask that they report it correctly.

Here is a free copy of a credit repair dispute letter that you can modify to use:

Dear Credit Bureau,

This letter is to inform you of issues regarding my credit and your reporting methods that are negatively affecting me at this time.

I was informed after applying for a loan that my credit scores were too low and was denied the loan because of these credit issues. After requesting the credit reports and reviewing them extensively, I had noticed an error.

This error I feel are due to mistakes by your bureau and I and requesting that the error be corrected as soon as possible.

The following accounts has the reporting error.

I am requesting that this account be verified by your firm. Please forward me all applicable information in regards to the account.

Including but not limited to:

  • The name and current address of the party
  • Account number
  • Method of verification
  • Reported 1st delinquency
I appreciate your time in responding to this matter.

Respectfully,

[Name]
 

casey4383

LoanSafe Member
Apr 20, 2011
32
0
6
Ok. So got an actual paper copy of experian and it says this account will turn positive as of August 2017 which is 7 years form first delinquency. No other reports have that note. Will it do the same on all three? I did send them a letter and they responded saying the first mortgage would fall off in August which I didn't even ask them about!!!!
 

Erik Sandstrom

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Jan 14, 2011
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On the mortgage aspect of this I just sent in a question to my underwriting department to determine exactly what you would need to show in order to qualify for a new loan. With you mentioning you have a release of lien the question would be is the delinquent/collection amount be taken against you as a liability or not considered at all because it was due to the foreclosure or something of that nature. I believe it would depend on whether or not your state performs judicial or non-judicial foreclosures.

Once I get a response on this I will come back in and let you know.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
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Jan 14, 2011
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Underwriting did come back and said: "We would require supporting documentation to ensure the borrower is no longer obligated to pay on the 2nd"
 

casey4383

LoanSafe Member
Apr 20, 2011
32
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6
It is after the 6 year time line so I am past the statue according to my lawyer. I just want them to take it off my credit report showing late every single month. Thats what I am working on. I just don't know how to do it. The foreclosure stopped reporting one month after but this second still reports every single month. On Experian it says "This account will turn positive on July 2017" and the foreclosure says it will "turn positive August 2017". So my question is two fold. A) does that apply to all three credit companies B) anyway to get them to stop reporting past due quicker and c) how long after it switches to positive before credit starts going up? We have done everything else right it is just this one thing. We put everything on a credit card each month and pay in full. Also a car payment where we pay more that the amount due every month. Only two things we have as far as debt. Only reason we care to get credit up is because we are building a house. We only want to borrow about 25% of what it is worth so we are basically going to almost have it complete and then do a home equity line that we can lock for last 25%. But they need a credit score of 660 and my husband is at 613.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,101
181
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San Diego, California
www.loansreduced.com
Makes sense, thanks for the explanation.

The questions you asked I may not be the best person to answer due to them being credit related questions. I'm very familiar with what it takes to increase your score and we also have a system that will tell us what you need to do in order to get the score up. That system does cost us (the lender) money to perform and would only do it on our active loans.

To answer your questions:
A) does that apply to all three credit companies - You may need to update the items with each credit bureau in order for all of them to report accurately.
B) anyway to get them to stop reporting past due quicker and - I'm not a credit expert, I do have a couple credit repair companies that I trust that would be more than happy to answer this question for you.
c) how long after it switches to positive before credit starts going up? - Another question I wouldn't feel comfortable answering. If we were to do what's called a "Rapid Rescore" your credit would go up immediately as long as you perform the tasks needed to increase the score. We would determine what tasks or debts that need to be paid down in order to increase the score through a system called "What-If Simulator".

Sorry if my answers are a bit vague on the credit side, I focus strictly on loan origination activities.
 

casey4383

LoanSafe Member
Apr 20, 2011
32
0
6
Makes sense, thanks for the explanation.

The questions you asked I may not be the best person to answer due to them being credit related questions. I'm very familiar with what it takes to increase your score and we also have a system that will tell us what you need to do in order to get the score up. That system does cost us (the lender) money to perform and would only do it on our active loans.

To answer your questions:
A) does that apply to all three credit companies - You may need to update the items with each credit bureau in order for all of them to report accurately.
B) anyway to get them to stop reporting past due quicker and - I'm not a credit expert, I do have a couple credit repair companies that I trust that would be more than happy to answer this question for you.
c) how long after it switches to positive before credit starts going up? - Another question I wouldn't feel comfortable answering. If we were to do what's called a "Rapid Rescore" your credit would go up immediately as long as you perform the tasks needed to increase the score. We would determine what tasks or debts that need to be paid down in order to increase the score through a system called "What-If Simulator".

Sorry if my answers are a bit vague on the credit side, I focus strictly on loan origination activities.
 

casey4383

LoanSafe Member
Apr 20, 2011
32
0
6
Ok thanks! We have sent paperwork to Experian and Equifax. We actually got on the phone with Experian and they said WHOA this loan should have been closed years ago. They should be able to basically back date it. All we have is a car loan that we pay over the amount due every month. And we put everything on a card and pay off each month. I think if they would back date it, delete it or stop reporting it sure wouldn't take long to go from a 615 to a 660. I will let you all know.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,101
181
63
San Diego, California
www.loansreduced.com
I would reach out to BofA as well - if you want to pursue the rapid rescore option we can also take a look at that if you'd like.