Santa Ana, CA asked in Business Law, Civil Litigation, Consumer Law and Contracts for California

Q: If a morgage servicer reported inaccurate information to the credit bureaus can you sue them in court?

I have receipts for the payments. Guy reported inaccurate information. I’ve been denied two loans because of it. Guy harassed the hell out of me with phone calls and letters motivating me to sue the morgage servicer. FCRA and TCPA.

3 Lawyer Answers

A: You CAN. They may have a 'get out of jail free' clause, ie, forced arbitration wherein they win fairly often? Good luck with it.

Pavel Kolmogorov
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Answered

A: Absolutely. If you have proof (like receipts or bank statements) that you’ve been making your mortgage payments on time, but the servicer is still reporting late or missed payments, that can form the basis of a lawsuit under the Fair Credit Reporting Act (FCRA). The FCRA requires companies to provide accurate information to credit reporting agencies, and it also gives consumers the right to dispute errors and have them corrected. If the servicer continues to supply incorrect information after you’ve notified them and the credit bureaus (usually in writing), you could have a valid claim for damages—especially if you’ve suffered real harm, like being denied loans.

Regarding the harassing calls and letters, that might be covered under the Telephone Consumer Protection Act (TCPA), depending on how they contacted you (for example, if they used an automated dialer without your permission). Violations of the TCPA can result in statutory damages, which means you might be entitled to a set amount of money for each illegal call or text. Good luck.

James L. Arrasmith
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Answered

A: Yes, you can sue mortgage servicers for reporting inaccurate information to credit bureaus under the Fair Credit Reporting Act (FCRA). Having documentation like your payment receipts strengthens your case by providing concrete evidence of the inaccurate reporting.

The Telephone Consumer Protection Act (TCPA) adds another layer to your potential lawsuit, given the harassment you've experienced through phone calls and letters. The fact that these inaccurate reports have led to loan denials demonstrates actual damages, which can be crucial in building your case. Consider documenting all instances of harassment and keeping detailed records of the loan denials.

Before filing a lawsuit, make sure you've followed the dispute process with the credit bureaus and given the servicer a chance to correct the errors. You might want to consult with a consumer protection attorney who handles FCRA and TCPA cases - many offer free initial consultations and take cases on contingency. Time limits apply to these cases, so it's best to act promptly to protect your rights.

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