Short Sales Purposely Reported As Foreclosures To Ruin Future Buyer's Credit

Short sales are known to be a great alternative to distressed homeowners who are facing foreclosure. In a short sale, banks will accept a lower amount than the homeowner owes on the property in an effort to avoid foreclosure.

Imagine being able to sell your home, avoid foreclosure, and have a chance to start anew.  You check your credit report to begin the task of rebuilding and... your short sale is being reported as a foreclosure of bankruptcy!

This is exactly what happened to persons who completed a short sale on their home with Wells Fargo & Citigroup Mortgage.  A judge has ordered they face claims of violating federal law by falsely reporting that thousands of homeowners went through a bankruptcy or foreclosure.

Consumers were able to provide proof to support their claims that Wells and Citi furnished inaccurate information to Experian, crippling their efforts to obtain a new home loan in the future.  What's really the kicker is that once the error was disputed by the consumer, Experian failed to conduct a true investigation, which is required according to the Fair Credit Reporting Act; and Wells & City were slow in correcting; often sending verification letters confirming that the error was reporting accurately!

According to the bank's representative it was merely a data entry clerical error.  My thinking is, if that was the case you would have corrected it upon being notified, right?  Umm, Hmm.  They will have to face the judge and the 1000s that were victimized by their 'clerical error';  Well, Citi AND Experian.

If you'd like to look it up; the case is Shaw v Experian Information Solutions Inc et al, U.S. District Court, Southern District of California, No 13-cv-1295.  Victims are seeking damages for violations of the U.S. Fair Credit Reporting Act.


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