Expert: Yan Ross - 5/21/2009

Question
Before my husband and I got married he defaulted on a home loan.  The property went into foclosure and was then sold by the bank (it is now occupied with new homeowners).  This mortgage that he defaulted on is still showing on his credit as an open account that is past due.  Is this what it should be showing because from everything I have read it should be showing a closed account either in the forclosure process or completed forclosure.  The information shown on his credit report as well as the sales history as shown by our local County Clerks office are as follows...



FLAGSTAR BANK5151 Corporate Dr

Troy, MI-480982639

(800) 945-7700



Account Number: 27450055XXXX   Current Status: 120+ DAYS PAST DUE   

Account Owner: Individual Account.  High Credit: $50,000    

Type of Account : Mortgage Credit Limit: $0    

Term Duration: 30 Years  Terms Frequency: Monthly (due every month)  

Date Opened: 2005/04   Balance: $49,853    

Date Reported: 07/2006   Amount Past Due: $7,013   

Date of Last Payment: 09/2005   Actual Payment Amount: $0    

Scheduled Payment Amount: $741    Date of Last Activity: N/A

Date Major Delinquency First Reported:    Months Reviewed: 14   

Creditor Classification:   Activity Description: N/A   

Charge Off Amount: $0    Deferred Payment Start Date:    

Balloon Payment Amount: $0    Balloon Payment Date:    

Date Closed:    Type of Loan: Conventional RE Mortgage  

Date of First Delinquency: 07/2005   



According to our County Clerks Office:

Date of Sale    Sale Price    Deed Type

04/07/05        $50,000      Warrenty Deed (husbands sale)

04/07/05        $18,950      Cash Deed

03/31/06        $44,930      Substitute Trustee Deed FC

07/24/06        $22,000      Special Warrenty Deed



The second half of my question is what can I do now at this point (short of paying the $50,000) to improve the out look of this on his credit report.



Thanks:



Wife trying to make it right.


Answer
Andrea,

First, I applaud you efforts to get this straightened out, and I hope your circumstances will permit yo uto do so.

While I cannot give you legal advice, especially as property in Michigan is apparently involved, there are some steps I can suggest.

If the Flagstar Bank loan is still showing on his credit report, contact the bank and get in touch with the loan administration official who is familiar with the matter.  If the loan has been written off, they should be able to send a letter to each of the 3 credit reporting agencies to get the outstanding balance off the credit report.  You should be aware that such action in itself may not raise his credit score, since it will show as written off rather than delinquent.

If you do not get cooperation from the bank, you may want to submit a written statement to each of the credit reporting agencies.  If a dispute is not resolved satisfactorily, you have the right to have a 100-word statement placed in his file so potential creditors who get access to the file will see that as well.

I hope that helps.  You may submit a follow-up question if you wish to do so.

Good luck!