House Surrendered, Now Bank is Reporting as Late

[BuckeyeGuy13]

OK, I've tried to search for the answer to this but I'm not coming up with any threads that are helping me. I'm hoping someone may be able to assist me here.

When I filed my CH 13 in 3/09, I surrendered my house in the filing. Since then, the only thing thing that has happened with the mortgage company was a Stay Relief in October which was granted and my attorney did not object since we intend to surrender.

Just the other day, I received a bill from the mortgage company with a pile of fees (no surprise) but they also included a late fee. So, I called to find out what was going on.

They informed me that since the stay was lifted, they were resuming collections and were reporting me as late to the credit bureaus.

How can they do this? Or, are they even allowed to do this? I thought the fact that this was IIB, it would NOT begin being reported. If this is allowed and actually able to be done, then they have no reason to speed up the foreclosure process and I could have months of lates on my credit report.

PS - when I filed, I was not late on the mortgage and never had been. And, before people start ripping me about worrying about my credit, be realistic. Credit is used for a lot of things these days and I am concerned about limiting the negatives on my report. When I filed, I was at 780. As of yesterday, I was at 645. I know it will take time to build it back up.

[lrprn]

They informed me that since the stay was lifted, they were resuming collections and were reporting me as late to the credit bureaus. ... How can they do this? Or, are they even allowed to do this?

Notify your Ch 13 lawyer right away so he/she can take this on for you.

Your mortgage lender is basically stating that the stay has been lifted but they (the lender) have not yet taken over legal ownership of the home. Therefore, you remain the legal owner and as such because your automatic stay is gone, they can report you are 'paying late' on your mortgage to the credit bureaus even though you stated your intent to surrender the home and walk away owing nothing.

Is what your lender is doing legal? Frankly, I don't know. The lender isn't asking you for payment - that would definitely be a violation of bk law. Instead they are reporting you as late to the credit bureaus - in essence, punishing you for filing by deliberately trashing your credit score until they take over ownership of the house. Whether that really matters at the beginning of a five-year Ch 13....who knows? They can't leave you owning the house forever.

This is the first time I've heard of this gambit being tried by a mortgage lender here in the forums. Your lawyer needs to get involved in this asap. Please keep us posted about what happens.

If you feel comfortable sharing, who is your mortgage lender?

[BuckeyeGuy13]

Thanks for replying. I have an email into my attorney to see if she knows anything about this. It just seems to me to be counter productive and shady. Really, the only reason for the stay to be lifted is so they can proceed with foreclosure, not to begin collecting again.

I will keep everyone posted how this plays out.

Oh, the original lender transferred the mortgage to Aurora Loan Services.