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Credit Reporting and Mortgages

Posted on June 4, 2013 in

Recently, there has been much focus placed on consumer credit reports and the accuracy, or inaccuracy, of said reports.  Under the Fair Credit Reporting Act, you have a right to have a credit report that is up to date and accurate.  If your credit report is not up to date or is inaccurate you have a legal right to dispute the information, requiring the credit reporting agencies and the creditor to reinvestigate and correct the inaccurate information.

One potentially large aspect of your credit report is the status of mortgage accounts, whether open or closed.  If you are current on your mortgage payments and you have avoided a foreclosure or short sale during our economic downturn, then reviewing your credit report is simple“Is there any inaccurate information contained in my credit report?”

If, however, you are one of the thousands of Nevadans who has short sold a home or effectively negotiated a loan modification, then reviewing your credit report requires a little more attention.  There are two areas of your credit report that you should be sure to review.

First, if you have short sold your home, it is not uncommon for your credit report to show that account as “foreclosure commenced” or “foreclosure in process.”  If you have short sold your home, this is obviously inaccurate information and is likely harming your credit more than it should be.

Second, consumers have been reporting an increased number of “120 day late” notations on mortgage accounts.  An example of this is: you short sale your house August 1, 2011, from September 2011 through December 2011 your account shows 30, 60, 90 and 120 days late, respectively.  Then, from January 2012 through March 2012 your account reads as 120 days late for each respective month.  The reporting for September 2011 through December 2011 is accurate information as it accurately reflects the time you were late on the account.  The information reported from January 2012 through March 2012, however, is inaccurate.  Common sense tells us you cannot be “120 days” for four consecutive months.[1]  This inaccurate reporting is likely harming your credit more than it should be.

It is imperative in our credit driven society that you monitor your credit score and ensure the information is accurate.  Inaccurate information can lead to loan denials, higher interest rates or higher down payments.

[1] Assuming you have not made any payments after the short sale.


If you have further questions or concerns, contact Cogburn Law Offices today. We can help.