Expert: Regan Shinski - 9/21/2010

Question
Hi..here is the situation in a nutshell:  In 1997 I purchased a house with a boyfriend at the time and then we broke up shortly after.  I left.  Over the years I made several attempts to get him to take it over in his name.  He did not, however, it was a small mortgage ($39K) and he was paying on time.  In '06 I found out that he stopped making payments.  I started a lawsuit against him to force a sale of the property, however, he took off and couldn't be served, so the bank ended up getting it (Chase Mortgage).  Over a year ago the house was sold at auction and actually my neice bought it from the bank.  I thought it was all done with, although I knew I would have a foreclosure on my credit.  Three weeks ago I pulled a credit report and lo and behold, no foreclosure showing but rather a current mortgage with Chase in the amount of $2800 which is now up over $4000 with interest and late fees.  This is the first I heard of it.  I called and also faxed a letter and I have just been passed from one dept to another.  The regular customer care dept is now calling me.  They say they have no information showing that it was foreclosed.  If this was a remaining amount then shouldn't it be showing as a charge off?  The credit person at my bank said the way it is showing now is actually worse because it looks like I have a mortgage that I am just not paying.  Chase has been ridiculous to deal with and no one there will give me an answer.  I have spent several hours on the phone with them.  A few people there suggested that I dispute it with the credit reporting agencies but I'm not sure that will do any good.  I don't know where to turn but I need help in getting this closed out on my credit.  I don't have any money to pay that debt right now so I'm not sure what I will do, but can I at least get it to stop collecting late fees and such?  Any help will be much appreciated!  Thanks!

Answer
Hi Jill:

You need to get a better track record of evidence.  Don't call them again unless you are LEGALLY recording it and even then I would be cautious on the phone.  

Send a dispute letter to each of the credit bureaus.  Nothing complicated, simply say you do not recognize this account as yours.  They (credit bureaus) will then contact Chase who will either verify, update, or delete the account.  The credit bureaus will send you a written response in about 3-35 days.  Sometimes this alone takes care of it.

If they respond with verifying or updating it incorrectly, send another dispute to the credit bureaus, this time send more evidence of the old foreclosure and/or sale of the property.  Again, they will get back to you in writing in about 30-35 days.

At that point, if it is still showing, we will have to evaluate what they are saying and your evidence.  The basic plan is to get them verifying of listing inaccurate information after they have been put on notice that you dispute and/or have shown it to be inaccurate.  This is a violation of federal law.  You can sue and win damages or mire likely use these violations as the basis to delete the account.

You have little risk here if the debt is beyond the statute of limitations in your state.  You want to be sure this is not a shortfall debt that is still legally active for Chase.  If the house was foreclosed, they sell it, and in some states you can then be responsible for the difference.  This then becomes an unsecured debt much like a credit card.  This can be turned over to a collection agency or you can be sued and judgement put in place.  However, the statute of limitations apply to this date and it is likely past this, but verify.

They are correct that it is worse to have this showing as it is.  Accounts stay on for generally 7 years, so the foreclosure and probably the shortfall should not be reporting, you just need to verify the timing.

If it is as you say, this should be a fairly simple deletion.  If you have trouble, please contact me again.  We are a professional credit repair company and deal with these type of situations all the time.

Regan
mbscompany@aim.com