What you need to know about “The Fair Credit Reporting Act” and Foreclosure
You have rights when it comes to your credit report. Anytime you are denied credit or even a loan modification based on the information received from a credit agency, you have to be given a statement stating that you can request a free copy of your credit report from the reporting agency. You must request the credit report from the company that provided the information and it must be sent within 60 days of the denial. These rights are thanks to The Honest Credit Reporting Act. The FCRA sets strict rules that that creditors must adhere to when reporting consumer information to the credit bureaus.
It is your right to know what is on your credit report and it is your job to ensure it is right. It is quite common that creditors make errors while trying to comply with all of the State and Federal lending laws. So it is all too possible that creditors have misreported information about you to the credit rating agencies. Any inaccurate information could cause hurt to you which makes the mortgage lender or creditor liable for a many violations. Mortgage lenders must report accurate information regardless of you being behind in payments, in pre-foreclosure or being in the foreclosure process. All errors must be corrected by the creditor on the borrowers report. The credit bureaus also have to abide by the FCRA. The FCRA states that the credit bureau has to verify any information that a consumer disputes. This verification must be done timely-within 30 days. If no record can be found, the item must be removed from the credit report.
To ensure that borrowers have a clear understanding of the laws, the FCRA requires that lenders provide borrowers with a “Notice to the Home Loan Applicant” form which contains an explanation of the credit scoring system and disclosure of credit scores.
What you can do if untrue information is reported on your report while you are heading into the foreclosure process. Inaccurate reporting is a liability for lenders when attempting to bring a foreclosure lawsuit or pursue a non-judicial foreclosure. Homeowners have the right to receive hurts in three ways if lenders willfully violate the FCRA. Actual hurts for each violation can be between $100-$1000. Punitive hurts can also be awarded by the court for foreclosure victims. Homeowners have the right to recover attorney fees and costs of legal action they incurred.
If you are already in the foreclosure process and your FCRA rights have been willfully violated you can use the awards to offset your liability in a foreclosure action or lawsuit. To do this, you can add the violations of the FCRA as counterclaims to sue the lender for hurts when preparing your answer to the foreclosure complaint.
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