First-Knox National Bank applied our clients mortgage payments wrong after they were granted a loan modification with deferred interests and other charges. In this case, we learned that an employee must manually remove deferred interests from a loan when applying a mortgage payment...
TransUnion and Equifax are refunding $17.7 million to consumers and paying $5.5 million in fines for giving consumers misleading and deceptive credit scores.
Mistakenly Charged Off
A bank charging off a person’s bank account is harmful to a consumer credit report. Sometimes charge-offs can mistakenly continue after a consumer has paid off their debt. Troy Doucet, the firm principal at Doucet & Associates Co., L.P.A., shares his legal advice on what a consumer can do to protect their credit report from a false charge off in Help! The Bank Charged Off My Debt – After I Paid It.
A charge-off is when the bank writes off the consumers loan on its accounting financial statements. Usually this action will appear on a credit report as a charge-off and can lower a consumer’s credit score. There are ways to correct a false charge-off appearing on a consumer bank statement and credit report.
A consumer should notify the bank when seeing an invalid charge-off on a bank statement. The consumer should question if money is still owed on a previous debt and the reason for the charge-off if it is disputed. A consumer who discovers a false charge-off on a credit report has the right to correct the problem under the Fair Credit Reporting Act (FCRA).
The FCRA protects consumer right to have an accurate credit report distributed to lenders. A consumer can send a letter to a credit reporting agency such as TransUnion, Equifax, and Experian to request a change in false information. A consumer should provide all documents possible to support why the information is false. A credit reporting agency must then re investigate the credit report and verify with the consumer that the information was corrected. A false charge off on a credit report can substantially affect a consumers ability to receive a loan and low interest rates.
More information about the Fair Credit Reporting Act (FCRA) can be found in 23 Legal Defenses to Foreclosure: How to Beat the Bank by Troy Doucet.
Check out some of our related articles about credit report errors:
How to Correct Mortgage Errors
For years, homeowners have complained that mortgage companies do not adequately address concerns about their loans, do not respond to requests for information, or fail to correct errors. This has become such a problem that federal law now requires mortgage companies to formally respond to any homeowner’s written request when the request alleges the mortgage company:
Failed to accept payments or apply payments correctly;
Failed to credit payments on the receipt date;
Failed to pay escrows as agreed;
Charged unreasonable fees, or without a basis;
Failed to provide an accurate payoff quote;
Failed to timely provide transferring notices; or
Failed to provide assistance to avoid foreclosure.
Homeowners facing problems with their mortgage company have a right to demand the company research their complaint and provide a written answer within 30 days. The company must correct any mortgage error immediately, or it must provide an explanation why it believes the account is correct. It cannot simply mail the homeowner an accounting of the loan, and it cannot charge the homeowner to research the complaint.
Attorney Troy Doucet of the Dublin, Ohio law firm Doucet & Associates Co., L.P.A. regularly litigates mortgage cases on behalf of homeowners. He recommends that homeowners with concerns about their mortgage send a written letter to their mortgage company that clearly identifies the concern, includes supporting documentation, and asks for a formal correction. He cautions that the letter must be sent to the address designated to receive correspondence (not the payment address), and he recommends keeping a copy of the letter sent via certified mail.
The mortgage company must acknowledge receipt of the letter within five days, and respond to concerns within 30 days. Failing to adequately respond to the letter can trigger damages under federal law, including attorneys’ fees. If the letter does not produce the expected results, a knowledgeable foreclosure and consumer attorney should be able to help with the next step. Call (614) 944-5219 to speak with one now.