Mortgage Reporting when 1 of 2 borrowers files BK7

[Road2Freedom]

Hello all - first post here. I am having a hard time tracking down an answer to this question.

I filed individual BK7 in 6/09 (discharged 9/09). I tried to reaffirm the 1st and 2nd mortgage (didnt know better) but luckily neither lender replied so both were IIB.

My wife was not included in the filing but was on the original loan agreement for both mortgages. I pulled her credit recently and the lenders are no longer reporting payment information, show a zero balance, but also show 120 days late.

These payments have never been late since the house was built in 03 (auto debit in fact), even through our tough times and the BK filing.

So I understand if they report IIB for me since I filed... but what should be reported for her? Technically she is still responsible for the mortgages right, so I would think a a balance and payment history would show. If anything I don't think they can just report 120 days late.

I called the 1st mortgage company and they sent me a letter stating they believe they are reporting correctly because a party of interest filed BK. I'm not sure what my next step is. My best guess is a letter to the CRAs to dispute the 120 days. Any other thoughts or ideas?

Thanks!

[IamOld]

I do believe that is WRONG and very much violative of FCRA - the account was never late - now I'm not sure whether the BK can/should/could show up on your wife's report BUT definitely not 120 days late.

Does your old BK lawyer have a "side" practice perusing FCRA violations?? If not, you could try looking for a consumer rights attorney - SOME may take it on contingent fee basis BUT:

First and foremost - write to Experian, Equifax, Transunion - It's easier to write because online it's hard to dispute if your dispute doesn't belong into one of their neat categories - return receipt certified:

Despute should reference the federal Fair Credit Reporting Act - that mort NEVER late. Start with that one (although you could do the never late online..) you may have to keep doing this for several months...

If this doesn't work, maybe even a letter from an atty to credit bureaus/bank may take care of the situation...

[SunshineGal]

As Iamold said, your wife needs to dispute the reporting on her credit report and have them correct it. Stay on them, and make sure they fix everything including the current balance, payment history and the code used (ie: can't think of the system off the top of my head, but certain numbers will mean included in BK, foreclosure, etc.) Fix it now before you guys need her to qualify for credit as it will take 60 days or so to straighten it out.

SG

[Road2Freedom]

Thanks. I'm just waiting on the paper copies so I can get the latest report IDs I ordered. Is there any legal precedence in how they should report? It looks like I'm going to have a similar issue with our second mortgage. 1 CRA shows a balance but no recent history. The other 2 show a zero balance. I'm trying to get both of our files in order so we can work on leasing cars next year.

[SunshineGal]

Hi Road2Freedom,

The creditors do not have to report at all, and some only report to 1 or 2 of the big 3. But, they can't just report that she was 120 days late when the loan was paid as agreed. Somewhere on your copy it will show the date the lender last reported. Regardless, you want them to correct the notes to paid as agreed and never late. Since the lender does not have to play nice with you (no reaffirmation agreement) you want to make sure you keep copies of every payment made. When you go to buy another house down the road you will have to prove the payments were made on time. One of the big lenders get real nasty about filling out verification of mortgage forms when the loan was included in BK.

[Road2Freedom]

Sorry, I think I'm muddying the water with different issues.

For the first mortgage, that's the one that's reporting the 120 days. I'll send a 'never late' letter to the CRAs for that one.

The second mortgage is the one that is reporting differently to the 3 CRAs. If they report anything to the big three, I would assume it would be accurate and reported the same for all three, right? Two CRAs show a zero balance and zero payment, while the other shows an old balance and the applicable payment, almost like it was never updated. It would be nice if they matched up. Plus it could be left off some DTI considerations for future credit (I know, we cant lie on apps if specifically asked, but if not asked it could help).

It's kind of crazy that there's no standard method for handling these, especially since BK and foreclosures are so prevalent in the past few years.

Good point about the payment history. I'll start keeping annual print outs.

One other thought... if these mortgages are content reporting zero balances, what are the ramifications if we were to walk away from this place one day? I don't plan to do so, but I am curious since we could easily rent a nicer place and not have to worry about all the maintenance that has plagued us over the past few years. Would they then be able to report negatively for my wife? I assume we could be subject to legal action, especially since this place is 60k in the negative considering both loans combined.

[IamOld]

Hi Road2Freedom - if you walk away, since YOU were discharged YOU won't be held liable BUT since your wife did not file they - the lenders - will/may come after your wife!!! IF she is a co-signer on these loans.

[Road2Freedom]

In retrospect I should have had her file too... it would have made that easier and also gotten rid of another 40k in unsecured debt. I wish I had discovered these forums beforehand. I'm working on a snowball plan for her now though so in a few years we'll be in a better place. We definitely have a different perspective on credit and realize how quickly things can go south. I'm looking forward to 2014.

[IamOld]

I wish I had discovered this forum in 2006/7 when all was well!!! Dear God how differently things would have turned out...

All best wishes to you!!!!

In retrospect I should have had her file too... it would have made that easier and also gotten rid of another 40k in unsecured debt. I wish I had discovered these forums beforehand. I'm working on a snowball plan for her now though so in a few years we'll be in a better place. We definitely have a different perspective on credit and realize how quickly things can go south. I'm looking forward to 2014.