The Statute Of Limitations Defense For Foreclosure

despritfreya

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Part four. . .

B. FCRA Claims Under Section 1681c(d)(1)

Ms. Childress alleges that Experian violated § 1681c(d)(1) of the FCRA by failing to report her bankruptcy as "withdrawn" as opposed to "dismissed" on her credit report. Section 1681c(d)(1) provides:
Any consumer reporting agency that furnishes a consumer report that contains information regarding any case involving the consumer that arises under Title 11 shall include in the report an identification of the chapter of such Title 11 under which such case arises if provided by the source of the information. If any case arising or filed under Title 11 is withdrawn by the consumer before a final judgment, the consumer reporting agency shall include in the report that such case or filing was withdrawn upon receipt of documentation certifying such withdrawal. 15 U.S.C.A. § 1681c(d)(1). Ms. Childress challenges Experian's reporting procedures with respect to the latter portion of this provision, which requires that a CRA include in a consumer's credit report that a bankruptcy petition was withdrawn prior to final judgment "upon receipt of documentation certifying such withdrawal." She argues that the information received from Lexis allows Experian to make such a determination at the outset, and the failure to include such a notation is a willful violation of the FCRA.

Ms. Childress has not cited to any relevant law in support of her argument that § 1681c should be interpreted in the manner that she argues. Just as she failed to cite to relevant factual evidence, her brief is devoid of actual legal analysis and citations to legal authority to support her interpretation of the statute, or to refute Experian's interpretation. Ms. Childress's arguments merely rely upon what Experian "should know" the definition of certain terms to be, as well as dictionary definitions. It is well-settled under Seventh Circuit law that "perfunctory and undeveloped arguments, and arguments that are unsupported by pertinent authority, are waived." Judge v. Quinn, 612 F.3d 537, 557 (7th Cir. 2010) (quoting United States v. Holm, 326 F.3d 872, 877 (7th Cir. 2003)). "It is not the obligation of this court to research and construct legal arguments open to parties, especially when they are represented by counsel." Id.

Based upon the facts presented by Experian, the Court finds that Experian's reporting procedures are reasonable and do not violate the FCRA. Section 1681e(b) states that "[w]henever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." 15 U.S.C. § 1681e(b).

This does not require that the CRA institute unreasonable procedures just to ensure greater accuracy, contrary to Ms. Childress's arguments. Ms. Childress does not provide any support for her argument that the procedures used by Experian and Lexis are unreasonable, given the volume of data they must collect on millions of consumers. A Lexis representative testified that the variations in the bankruptcy docket entries from court to court render it impossible to devise a universal software program that could accurately discern the basis upon which a case was dismissed. Lexis Dep. It would be unreasonable to require Lexis or Experian to review each of the millions of bankruptcy dockets, often having to look at the filings themselves, to make a factual and legal determination as to whether a case was voluntarily or involuntarily dismissed with the degree of accuracy required by the FCRA. Lexis Dep. 96:10-22, 100:25-103:3, 105:22-106:6. Ms. Childress merely speculates that her proffered analysis is feasible, or even possible. See Liu v. T & H Mach., Inc., 191 F.3d 790, 796 (7th Cir. 1999) ("A party must present more than mere speculation or conjecture to defeat a summary judgment motion.")

Noting that a bankruptcy case was "dismissed" on a consumer's credit report is an accurate statement; a petitioner must file a voluntary motion to dismiss, which is granted by the bankruptcy court. See 11 U.S.C.A. § 1307(b) ("On request of the debtor at any time, if the case has not been converted under section 706, 1112, or 1208 of this title, the court shall dismiss a case under this chapter."). Thus, reporting a case as "dismissed" is an accurate statement regarding the case's disposition. So long as what a CRA reports on a consumer's credit report is accurate, there is no need to inquire into whether the CRA's procedures are reasonable. Grays v. Trans Union Credit Info. Co., 759 F. Supp. 390, 393 (N.D. Ohio 1990). The fact that a credit report could be "more accurate" does not render it inaccurate for purposes of finding liability under § 1681 the FCRA. See Tracy v. Credit Bureau, Inc., of Ga., 330 S.E.2d 921, 923 (Ga. 1985) ("if the specific credit information that is actually reported is itself factually accurate, the report does not become inaccurate and actionable simply because a more detailed explanation of the reported fact might have been but was not included.").

The Court finds that Experian does comply with § 1681c(d)(1) with its current procedures of noting a consumer's records upon receiving additional documentation indicating that the petition was voluntarily dismissed, and that no violation occurred with respect to Ms. Childress's credit report. Ms. Childress argues that Experian could have determined that her petition was voluntarily dismissed when she submitted her first dispute back in 2009; however, she provides no citations or evidence to support this assertion. In addition, Ms. Childress's request in 2009 was to remove reference to her bankruptcy in its entirety, not to note that the bankruptcy petition had been voluntarily dismissed. With regard to her second request in 2012, she did not provide any documentation to Experian as required. Given that it would be unreasonable to expect Experian to determine whether a bankruptcy petition was voluntarily dismissed upon the initial receipt of data from Lexis, it necessarily follows that Experian would need to receive some additional documentation—from the consumer or otherwise— demonstrating that fact. This interpretation is consistent with the language of § 1681c(d)(1), which requires a CRA to note a case as withdrawn "upon receipt" of documentation, and § 1681e(b), which states that procedures must only be "reasonable."

For these reasons, the Court finds that Experian's procedures for reporting dismissed claims on consumers' credit reports do not violate the FCRA, and no reasonable jury could find that Experian violated the FCRA in Ms. Childress's case in particular. Therefore, summary judgment on Ms. Childress's claims for violations of § 1681c(d)(1) is GRANTED..
Continued to part five - should be the last.
 

despritfreya

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Sep 8, 2011
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Part five - end. .

C. Willfulness Under the FCRA

Even if Ms. Childress could show that Experian's reporting procedures violate the FCRA—which, as explained above, she cannot—she has not presented any supported facts or arguments that would permit a reasonable jury to find that Experian's conduct was willful. Section 1681n provides for civil liability for willful noncompliance with the FCRA. 15 U.S.C. § 1681n(a). The Supreme Court has determined that "willful" in the context of FCRA violations also includes "reckless disregard" of the law, which means "conduct violating an objective standard: action entailing 'an unjustifiably high risk of harm that is either known or so obvious that it should be known.'" Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57, 68 (2007) (quoting Farmer v. Brennan, 511 U.S. 825, 836 (1994)). Thus, a CRA does not act in reckless disregard of the FCRA "unless the action is not only a violation under a reasonable reading of the statute's terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless." Id. at 69.

Again, Ms. Childress cites to no authority in support of either her interpretation of the statute, or in support of the argument that Experian's interpretation was unreasonable. Even if Experian's interpretation of the statute turned out to be mistaken, it is objectively reasonable for the reasons discussed above, and because there has been no contrary judicial or regulatory authority suggesting a different interpretation. In fact, Experian's interpretation is consistent with the Federal Trade Commission's Statement of General Policy or Interpretation on the FCRA, which states that "if a reported bankruptcy has been dismissed, that fact should be reported," and that CRAs "are not required to include all existing derogatory or favorable information about a consumer in their reports." Statement of General Policy or Interpretation; Commentary on the Fair Credit Reporting Act, 55 FR 18804-01. In addition, it states that a CRA "must report significant, verified information it possesses about an item." Id. Experian has acted consistent with this guidance by reporting a case as "dismissed" until it receives documentation verifying that the dismissal was voluntary. Therefore, the Court finds that even if Ms. Childress could show that Experian violated the FCRA, there is no evidence from which a reasonable jury could find that such violation was willful, and her claim fails for this additional reason.

D. FCRA Reinvestigation Claims

Ms. Childress concedes that her claims under § 1681i for failure to reinvestigate should be dismissed; thus summary judgment on those claims is GRANTED.

IV. CONCLUSION

For the foregoing reasons, Experian's Motion for Summary Judgment is GRANTED, and Ms. Childress's Complaint is DISMISSED with prejudice. The following pending motions in this case, including the Motion to Certify Class, the Motion for Leave to File Supplemental Affidavit in Support of Motion for Class Certification, the Motion for Leave to File First Amended Class Action Complaint, the Motion for Leave to File Surreply in Opposition to Class Certification, and the Motion for Leave to File Sur-Surreply, are DENIED as moot. The Motion for Leave to File Reply in Support of Plaintiff's Motion for Class Certification Under Seal is GRANTED.

SO ORDERED.
(Emphasis marked in bold in the related posts is, added.)

Des.
 

PatZZ

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Sorry no dice. (I used your refs/FCRA quotes) We will have to agree to disagree. Your last case reference is to an employment tax lien and the IRS. Plus, the '"payment" and ' lien removal' was apparently self-reported. Different animal and one I would not consider precedent, but sure, banks can find lots of different cases trying to create cause (or defense) that is wholly arguable.

Also, your additional BK quote is an 'if-then' statement. If it is reported (assumed inadvertance) Then it is updated w accurate conclusion (withdrawl, etc for a non-adjucation). This is no way shape or form gives CCRs the right to hold a consumer's credit hostage for 10 years w a misleading court item.

J-M
Yep, I think anyone who has filed BK can tell you when it was 1st reported. It's reported upon the initial filing and remains for up to 10 years. At discharge, the entry is updated. It makes sense because other lenders will want to know a borrower is CURRENTLY in a bankruptcy - which is the very purpose of the credit report, i.e., to alert others. When someone files BK & then voluntarily dismisses it, the bureau is ONLY reporting that public records show a BK was filed. That reporting would be correct. As someone said above, when we decide to file BK, we gotta consider all the ramifications. If the person decides to voluntarily dismiss and the record is on the report, I would add a consumer statement explaining the situation.

Fortunately, credit reporting is not something about which we must rely on others' interpretation or point of view. Answers are no doubt available on the bureaus' web sites. Anyone who really needs answers should go to the source.
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PatZZ

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After further surfing and refresh, the doctrine of Laches would cover 'other things' and has been successfully used in cases where SOLs are in murky waters. For someone planning on an answer, assertion, or defense (in foreclosure), I would recommend including it, because nowadays these cases can last ... years... I was lucky as my basic boilerplate defense included both those items. They have become relevant with passage of time. Otherwise, one would need to know how to update a 'motion to amend' their initial filing or answer to FC. This 'permission' can sometimes be judge dependent, although it shouldn't be. And as well, always have the updated motion ready to file at same time.
We should include all possible and reasonable defenses in our answer. In my draft, I have (just in case) also added near the end that "Defendant reserves the right to amend the answer to add additional defenses as may be uncovered during the course of the pleadings and discovery." But in the NJ court, none of the judges are interested in hearing any of the "box" arguments. NJ trial judges take it to heart that defenses to foreclosure are almost non-existent. "Laches" would fall under "the mortgagees right to foreclose," but I cannot imagine a NJ judge listening to this argument for 10 seconds. NJ is NOT giving out free houses. Include it if it fits, but only hope to get anywhere on appeal.
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just_me

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Oh your good PatZZ. :) I made a point to do this too. I highly recommend this for pro se. Plus, in similar line of thinking, I added in my "mod" the right to obtain verification of the calculations of the debt used for the 'new balance.' I did not trust their 'finalized' presentations, but was forced to sign in short order in order to accept the "offer."

We should include all possible and reasonable defenses in our answer. In my draft, I have (just in case) also added near the end that "Defendant reserves the right to amend the answer to add additional defenses as may be uncovered during the course of the pleadings and discovery."
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just_me

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On the BK thing, don't confuse Motion to Dismiss with Motion to Withdraw. These are very different things. It takes 30 days to update a credit report.
 

PatZZ

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Oh your good PatZZ. :) I made a point to do this too. I highly recommend this for pro se. Plus, in similar line of thinking, I added in my "mod" the right to obtain verification of the calculations of the debt used for the 'new balance.' I did not trust their 'finalized' presentations, but was forced to sign in short order in order to accept the "offer."
100%. I would bet EVERY calculation the servicer concocts is WRONG in their favor. They are nothing but scum of the earth.

I am not caring about the BK voluntary dismissal at all. Something I don't plan to do. Hopefully, whoever mentioned this topic will do their homework. Filing BK is no joke. I know to keep my filing on the back burner until the very last minute. Will try everything before that.
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just_me

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Part five - end. .

(Emphasis marked in bold in the related posts is, added.)

Des.
Wow. This case contains lots of notable references, but this is a dismissal and not a withdrawal. The Plaintiff's lawsuit has multiple technical errors and lacks argument and evidence as reason for denial of consumer's action against the credit bureau (intentional harm). Lexis-Nexis is a paid provider. This case might have turned out differently if there was an actual 'motion for withdrawal' versus later stage 'dismissal.' The crux of the CCR defense was a 'lack of notification' on the disputed item. If Childress had an actual legal doc on the withdrawal, she could have uploaded it as proof at an earlier date and did not due so.
 

PatZZ

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PLEASE BE AWARE !!!!!

If you are approaching the statute of limitations, BE CAUTIOUS not to apply for, get approved for, or make any agreements or payments AT ALL to your servicer. If you do, you will probably start a new period for the SOL. It would start all over again. Same thing for any other debt.

In fact, I can see a sneaky servicer approving a homeowner with a crazy loan mod with unbelievably low payments and the homeowner begins making TRIAL payments. The final loan mod is never approved yet the SOL has started anew.

Cuz guess what? I received in the mail today an insane offer for a loan mod. AND, the letter says I need not apply because they received Federal money for homeowner assistance and were basing their offer on my prior app. Payment nearly cut in half.

Really? They're pulling that stunt on the wrong person. I would hope everyone would see the crazy in that. Problem is, I bet most homeowners know nothing about the SOL.

I am not going to even respond to the letter. Despite the fact that SOL cases are tough to win in NJ, they must still be concerned about it.
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PatZZ

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just_me

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PLEASE BE AWARE !!!!!

If you are approaching the statute of limitations, BE CAUTIOUS not to apply for, get approved for, or make any agreements or payments AT ALL to your servicer. If you do, you will probably start a new period for the SOL. It would start all over again. Same thing for any other debt.

In fact, I can see a sneaky servicer approving a homeowner with a crazy loan mod with unbelievably low payments and the homeowner begins making TRIAL payments. The final loan mod is never approved yet the SOL has started anew.

Cuz guess what? I received in the mail today an insane offer for a loan mod. AND, the letter says I need not apply because they received Federal money for homeowner assistance and were basing their offer on my prior app. Payment nearly cut in half.

Really? They're pulling that stunt on the wrong person. I would hope everyone would see the crazy in that. Problem is, I bet most homeowners know nothing about the SOL.

I am not going to even respond to the letter. Despite the fact that SOL cases are tough to win in NJ, they must still be concerned about it.
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I found something interesting while researching the prior debate on motions ...

Apparently intermittent payments, say for 3 months or so, can be debated in Bankruptcy court as not re-setting the statute of limitations to collect a debt (yes this was mortgage). It was in BK arguments and the debtor actually won. There were several, yes several, but I didn't download, sorry. I will try to find and post link.

No, I would NOT want to reset the SOLs by taking a mod offer either. It's risky. I ignored the last one too. I do not want to give my enemy my financials for the 'privelege' of the mod invite NOR an opportunity to reaffirm their legal position on this contract dispute, NOR an opportunity to reset SOLs. But it does look like the offers get better after a few years. Ironic. If they had only done so at an earlier date, then they could have 'negotiated away their liability' w such pacifier. Too little too late now. Don't trust them!

I'm not sure if one can use BK Ct Rulings (Federal) as precedent in a Civil Case (State). Can they? What if a BK Ct has made a ruling on SOLs that are useful to me?
 

johnna

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Oh, forgot to add, BK is only reported on discharge to the Credit Bureau(s). There is no authority to report a case that is not concluded. The (real) reason for creditor reporting of BK is to show the item is now zero balance with the discharge.
No, actually the filing was reported to all credit bureaus almost the day after the filing of the petition. So, it's there for all to see.
 

PatZZ

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acesfull

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Great read.. So initiating foreclosure action does not stop the SOL clock, that is good news. Also learned that the sol starts when homeowner receives the "amount due in full notice" not from the first day of default... Good information..
Regards
Nj-73 months
Acesfull/HWP
 

PatZZ

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Great read.. So initiating foreclosure action does not stop the SOL clock, that is good news. Also learned that the sol starts when homeowner receives the "amount due in full notice" not from the first day of default... Good information..
Regards
Nj-73 months
Acesfull/HWP
No, the SOL is not tolled while the mill is prosecuting a foreclosure. So, if that case is dismissed and the six years have passed, they "could" have a SOL problem when/if they file a new complaint.

I presume when you say, "receives the "amount due in full notice," you are referring to the "Acceleration Letter." That is true in most states. I have read a couple cases where the court did use the default date. That would certainly be the case if the loan was never accelerated. And that's where paragraph (c) at NJ 2A:50-56.1 would apply.

There are many homeowners who never received a "true" acceleration letter. They only received a threat to accelerate. But then the foreclosure complaint states that the mortgagee "exercised its right to accelerate the loan." According to FHA, a lender can accelerate w/o further notice after the warning letter. I actually did receive a "Notice of Acceleration."

Should be simple, but this defense requires a lot of study.
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acesfull

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No, the SOL is not tolled while the mill is prosecuting a foreclosure. So, if that case is dismissed and the six years have passed, they "could" have a SOL problem when/if they file a new complaint.

I presume when you say, "receives the "amount due in full notice," you are referring to the "Acceleration Letter." That is true in most states. I have read a couple cases where the court did use the default date. That would certainly be the case if the loan was never accelerated. And that's where paragraph (c) at NJ 2A:50-56.1 would apply.

There are many homeowners who never received a "true" acceleration letter. They only received a threat to accelerate. But then the foreclosure complaint states that the mortgagee "exercised its right to accelerate the loan." According to FHA, a lender can accelerate w/o further notice after the warning letter. I actually did receive a "Notice of Acceleration."

Should be simple, but this defense requires a lot of study.
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Indeed, lots of study, and judges here and in most states do not want to give away free houses.. Eliminating credit card debt is one issue however a "free house" seems rather far fetched.. I actually am approaching the SOL on my loan... More intrigue forthcoming!
Regards
Acesfull
 

PatZZ

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Indeed, lots of study, and judges here and in most states do not want to give away free houses.. Eliminating credit card debt is one issue however a "free house" seems rather far fetched.. I actually am approaching the SOL on my loan... More intrigue forthcoming!
Regards
Acesfull
I will avoid using the term "free house" in my pleadings. I detest that language. How can it be free if I have paid $275,000 in payments? There are many other "true" ways to phrase it. The first way: "The defendant would not fully pay off the loan." Not our fault. We didn't write any legislation. Didn't the dumb-asses in the legislature know the effect a Statute of Limitations would have? It works the same way all over the globe. WHENEVER there is a Statute of Limitations, a party stands to gain a benefit he/she might otherwise not, and another party stands to lose something he/she might otherwise not. Obviously, under certain circumstances, New Jersey intended and planned to let homeowners off the hook w/o paying their loan balance. And a court has no standing to revise legislation. The court wants to pretend like they are "interpreting" the legislation because it is confusing & ambiguous. Bull**** !!!!

:-( Rant over.
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PatZZ

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Here is a case where a pro se tried to plead her case on appeal regarding the SOL.

https://scholar.google.com/scholar_case?case=14713195377487789154&q=Demetria+Guiuan&hl=en&as_sdt=6,31

I can tell by reading the wording in the opinion that the court basically dismissed her. She got no respect whatsoever. Admire her gusto though.

Courts keep trying to use the case of Mahler as precedent in SOL cases, but it really is not. When Mahler was decided in 2000, NJ 2A:50-56.1 did not exist.

Regardless what your defenses are, be certain you examine all the cases you can so you know if they can be used as precedent. Don't know if this woman knew about the Mahler case. She could have been caught completely off guard. If you plan to fight back in court, KNOW YOUR PRECEDENT !!! Nothing is more important to your case. If a party does not object to precedent set out by the other party, the court will not intercede - UNLESS of course the rolls are reversed & it is the homeowner using bad precedent against the bank.
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PatZZ

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Oops. Change