Credit reporting agencies getting nervous about homeowner claims: The issue is willful ignorance

As previously reported there is abundant statutory and case law support for holding the credit reporting companies (CRCs) liable for publishing false credit reports went they fail to conduct adequate due diligence. This is covered by the Fair Credit Reporting Act 15 U.S.C. §1681 et seq.  Like everyone else in the orbit of securitization claims their entire business (or most of it) consists of claims and “reports” arising from unpaid loan accounts receivable that do not exist. Having received numerous challenges to their reporting from homeowners who were sophisticated enough to make the claim, there are only two possibilities: (1) they have known for a long time that such reports were unfounded or (2) they practiced “willful ignorance” which any lawyer will tell you is no defense to a claim.

Like title insurance companies these CRCs are faced with a dilemma. Either they play along and receive the fees that account for most of their revenue or they challenge the financial institutions that can shut off all business now being sent to them and who can start their own CRCs and title companies. As one chief executive officer confided to me, it is a choice between no existence as a business and a business founded on the fraud being committed by third parties. licensed appraisers warned of this in 2005 when 8,000 of them signed a petition to Congress that said that they were being forced to falsify the appraised value of property or stop working.

Wall Street investment banks responded with “Fuhgetaboutit” and contributed hundreds of millions of dollars to the campaigns and pockets of politicians. That is how Glass Steagall was repealed and that is how we ended up with a “mortgage meltdown” that virtually destroyed the underpinnings of economies across the world, cost millions of people their homes (which were their only major investments) and millions more their jobs. The best answer was not what Secretary of Treasury Hank Paulson went down on his knees about to save a $40 billion windfall for his alma mater, Goldman Sachs.

The best answer was the initial impulse and opinion of President George W Bush — let the chips fall. If Bush did not succumb to the entreaties of Paulson, the trillions of dollars in relief funds would have actually provided relief to those who were actually hurt by fraudulent practices that lured homeowners into transactions that were extremely well-disguised partnerships in a securities scheme and not, as represented — i.e., loan transactions in which a loan account receivable was maintained at the end of the transaction cycle. In fact, only a fraction of that money would have been needed by simply forcing settlements and reformation of the illegal contracts with consumers.

Needless to say, we would also not be dealing with continuing fraudulent practices consisting of illegal, extra-legal, and morally repugnant practice producing in every case a windfall for Wall Street companies and all their affiliates and satellites while trapping consumers into deals that gave them no participation in the schemes and fuller exposure to risks that were unknown to them.

Here is a response I suggested to an unusual letter from a white-glove law firm responding to a contributor to those pages:

My demand for settlement is linked to the damages caused by Equifax — i.e., denigrating my credit reputation based upon a false claim. The false claim is based upon an unpaid loan account receivable that does not exist and a false declaration of default. The details are contained in my original claim already filed with you.

Equifax had a duty to exercise due diligence as to the initial report because Equifax had adequate information to reject the claim. Equifax now has the additional duty to conduct an investigation to assess the claim.

The slander on my credit reputation interfered with my ability to refinance or offer a refinance deal to claimants who were falsely claiming that they were owners of an underlying obligation due from me. This has resulted in years of litigation in which the claimants and their predecessors failed and refused to produce any evidence of the existence of the unpaid loan account receivable, any evidence of the existence of an unpaid underlying obligation due to them, and loss of quiet enjoyment of my property together with substantial personal and emotional distress damages arising from the continuing stress of dealing with false claims and false reports of default to credit agencies.

Equifax is only one of the credit reporting agencies that contributed to this situation, accepting fees and making credit reports that were false. My total demand is that all references to the claimed debt and any history of the debt be removed from Equifax, that Equifax notify any person who made inquiry during the period in question that the report was erroneous, and that I receive a total payment of $10,000,000, part of which is owed by Equifax.

3 Responses

  1. Hmm — yes – Bush caved. Clinton – the Commodity Futures Modernization Act. And the settlements? Whose clock? A big problem – they came later. Credit reports — never the actual claimed creditor reporting. It does not matter what credit reports say – even if foreclosure – you will find someone to lend that belongs to the “web” of destruction. Of course, after they took your house – they want you to do it again!!!!!

  2. How can we get a credit report that the creditor gets to see? I have wondered how they are keeping my credit score as low as it is, and I believe that foreclosure in 2016 is what is knocking down my score. The free reports offered annually by the credit bureaus say specifically that the report “may not be exactly the same as the creditor sees”. Doesn’t seem fair to me. Maybe the key to winning some damages for us homeowners who have been preyed upon in refinances and then foreclosed on with paperwork that is not entirely true is to attack in a class action the three credit bureaus??? One at a time, we homeowners will never get much of any justice – most of us cannot find a lawyer in our state who has a clue. And most of us by this time have been stripped of our life savings, our retirement accounts, our equity, nearly all our sanity, and all of our hope by the real estate industry and Wall Street.

  3. My mortgage disappeared on my credit reports, I always wondered why.
    I’m still in my home and have been told by the latest servicer they can’t touch me unless I make a payment. Last payment I made was 2009.

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