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Fair Credit Reporting: 4.3.3.4 Mixed Public Records Information

Another category of reported data that undergoes a matching process is public records. Each public record contains some identifying criteria such as name, address, and sometimes date of birth or Social Security number (SSN). The CRA matching process is applied to these items in much the same way as for furnished credit accounts. This matching process may even occur first at the public records vendor.365

Fair Credit Reporting: 4.3.3.8 Fixing a Mixed File

Consumers face significant proof issues when trying to prove that a file does not belong to them. Trying to prove a negative such as “this is not my account” is a common problem when files are mixed or mismerged. Consumers may have to submit affidavits or provide documentation such as birth certificates or driver’s license numbers in order to prove that an account does not belong to them. The downside of disclosing such information is the potential for identity theft or other misuse of the information.

Fair Credit Reporting: 4.3.3.9 Fragmented Files

In addition to mixed files, the nationwide CRAs’ matching criteria sometimes result in “fragmented” or “frag” files, that is, multiple and incomplete consumer reports for the same individual.405 These fragmented files are created when there is neither an exact match, nor a match of sufficient closeness to exceed the matching score threshold, and is the opposite problem of the mixed file.

Fair Credit Reporting: 4.3.5.1 How Public Record Information Is Collected

There are many different types of public record information that can appear in a consumer’s file, e.g., bankruptcies, collection judgments, eviction proceedings, criminal records, and tax liens. In contrast to how nationwide CRAs passively receive data from creditors and others, previously they had affirmatively sought out and obtained public record data from their own third-party vendors.432 These vendors may also be “furnishers” governed by the FCRA.433

Fair Credit Reporting: 4.1.3.4.4 CFPB complaints

The CFPB began accepting credit and consumer reporting complaints in October 2012.94 Credit and consumer reporting has been by far the top category of complaints to the CFPB, which received over 978,000 such complaints in 2022, constituting 75% of the overall complaints received by the Bureau that year.95 Between January 2020 and September 2021, the CFPB received 700,000 complaints specifically against th

Fair Credit Reporting: 4.2.3 Accuracy Requires Common Understanding of Information

Ambiguity in information supplied to users can create inaccuracies in consumer reports that are actionable under the FCRA. For example, in Cassara v. DAC Services, a truck driver history database used an overly broad definition of what constituted an “accident,” leading employers to use different standards to report accidents. The Tenth Circuit held that these discrepancies raised a genuine issue as to the accuracy of such reports, stating:

Fair Credit Reporting: 4.2.4.1.1 Majority of circuits have adopted a “maximum possible accuracy” approach

The FCRA requires more than technical or literal accuracy; it requires “maximum possible accuracy of the information concerning the individual about whom the report relates.”162 As the Third Circuit has noted, “the distinction between ‘accuracy’ and ‘maximum possible accuracy’ is not nearly as subtle as may at first appear, it is in fact quite dramatic.”163 And as the Eleventh Circuit observed “[t]he words ‘maximum’ and ‘possible’ mean ‘greatest in quantity or highest in degree attainable’ and ‘

Home Foreclosures: 10.2.2.1 State Statutes Described

Approximately half the states have foreclosure statutes that provide homeowners with a postforeclosure sale redemption period—a fixed period of time in which to set the foreclosure sale aside and regain title to the home by paying the foreclosure sale price, interest, and costs of the sale.5 Some states have more than one redemption law.

Home Foreclosures: 10.9 Former Owners in Possession of Property Following Foreclosure

Unless the sale is set aside, the right of a former homeowner to possess the property terminates with the foreclosure sale,716 ratification,717 or at the expiration of the redemption period.718 Procedures will vary depending on whether it was a judicial or non-judicial foreclosure. Often the purchaser at the foreclosure sale (who will often be the lender) will bring an eviction action against the former homeowner and obtain a judgment.

Home Foreclosures: 10.3.3.1 Generally

In order to recover the property after a foreclosure, a homeowner must be able to assert a legal basis to invalidate the foreclosure sale after a power of sale foreclosure, or to set aside the judgment and sale after a judicial foreclosure.

Home Foreclosures: 10.3.3.3 Void and Voidable Sales

The ability to challenge a completed non-judicial sale may depend upon whether a court distinguishes between foreclosure sales that are “void” and those that are “voidable.”84 Generally speaking, where a foreclosure sale is conducted under circumstances not authorized by an applicable statute, the court may find that the sale is void.85 Sales have been found void where (1) they were conducted by a party who had no right to enforce the loan documents, (2) the loan was not in default, or (3) there was

Home Foreclosures: 10.3.3.4.1 In general

In certain instances, courts will not set aside a completed foreclosure sale that is challenged solely on the basis of a procedural irregularity or a violation of a statute regulating the foreclosure process. Unless the foreclosure sale is deemed void, the courts may require that the party seeking to invalidate the sale make a showing of harm or prejudice caused by the improper conduct. In Lona v.

Home Foreclosures: 10.3.3.4.2 Authority to foreclose (standing)

Non-Judicial Foreclosure Sales. As a consequence of securitization, a party with no authority to foreclose under state statutes and property law may, nevertheless, have conducted a foreclosure sale.97 Completion of a foreclosure without authority to do so should be a substantial defect under any state’s foreclosure law.

Home Foreclosures: 10.3.3.4.4 Loss mitigation

This subsection addresses the question of when a foreclosure sale may be set aside due to an error in the servicer’s loss mitigation review process. The premise of loss mitigation is that foreclosure sales cause significant harm to owners of loans and to borrowers.

Home Foreclosures: 10.3.4.1.1 In general

Sales that are conducted in violation of the automatic stay206 are generally void and can be set aside on that ground alone.207 This means that any foreclosure sale conducted after a bankruptcy filing and while the automatic stay is in force is without legal effect,208 even sales completed just minutes after a bankruptcy petition is filed.209 State law determines when a forec

Home Foreclosures: 10.4.1 Deficiency Judgments Defined

In most states, if the foreclosure sale price is not enough to pay off the loan balance and any allowable foreclosure expenses, the lender may sue the borrower for the balance—the “deficiency.” A deficiency judgment can be satisfied by garnishing wages or attaching other non-exempt property. Though a lender may decide not to sue for a deficiency when it seems unlikely that the homeowner will have any assets to satisfy the judgment, foreclosed homeowners should at least be aware of the possibility of a deficiency action after a foreclosure.

Home Foreclosures: 8.2.5.3a Periodic Statements

For closed-end loans, servicers are required to send periodic statements to borrowers on residential mortgage loans unless an exemption applies.40 Exemptions to the periodic statement rule apply to reverse mortgages, timeshare plans, and if the servicer provides the consumer with a coupon book that provides specific information about the loan, a practice not much used anymore.41 Small servicers, as defined an

Home Foreclosures: 8.2.5.6a Bankruptcy Notices

If the borrower filed a chapter 13 bankruptcy case to cure a mortgage default after December 1, 2011, Bankruptcy Rules 3001 and 3002.1 require the servicer to disclose prepetition default fees and arrearage amounts on the initial proof of claim, send notices of any mortgage payment changes, send notices of any fees and expenses that are charged to the borrower’s account during the case, and file a response at the end of the case indicating whether the borrower has fully cured the default.53

Mortgage Servicing and Loan Modifications: 7.3.1.3.4 The trial period plan offer

When a servicer reviews a borrower for a Flex Modification after receipt of a borrower response package it relies primarily on information from its own records. This includes any property valuation estimate it has obtained. The servicer refers to the borrower’s income information in the borrower response package only when the borrower submitted the package within ninety days of default. In these cases, the servicer considers an additional step in the Flex Modification waterfall. This extra step takes into account the debt-to-income ratio for the modified payment.