July 15, 2015
Some borrowers who are preparing for an FHA loan application get surprises when they pull their credit reports–the existence of outdated debt information, inaccuracies, and mis-reported collection activity can plague credit reports in some cases.
It takes time to undo these things and the borrower must work directly with the credit reporting agency to clear up the problem.
And according to a recent headline at the Consumer Financial Protection Bureau (CFPB) official site, there may be more of these issues in store for some potential FHA loan applicants. According to Were ordering JP Morgan Chase to refund $50 million and stop collecting on 528,000 accounts, JP Morgan Chase’s sale of credit card accounts to debt buyers resulted in inaccuracies that brought complaints of aggressive, improper, and inaccurate debt collection activity. According to the article:
“Along with the Attorneys General in 47 states and the District of Columbia, we found that Chase sold credit card accounts to debt buyers that included amounts that were inaccurate or debts not owed by the consumer. Debt buyers then sought to collect the faulty debts it purchased from Chase.”
“We’re ordering Chase to reform its debt sales practices to prohibit it from selling certain types of debt, like old or disputed debts, and zombie debt which are debts that debt collectors repeatedly attempt to collect, even when its not collectible. Chase will also have to provide specific documentation to debt buyers when it does sell debts, and must prohibit its debt buyers from re-selling debts they buy from Chase.”
To make matters worse, “Chase also filed more than 528,000 lawsuits against consumers to collect on debts, often using sworn documents that were robo-signed and not verified for accuracy. As a result, Chase must refund at least $50 million to consumers, stop collecting on all of these accounts, and include specific information when filing debt collection lawsuits in the future. Chase must also pay $136 million in penalties and payments to the CFPB and states.”
Borrowers are urged to examine their credit reports even without issues like these, but this report from CFPB at ConsumerFinance.gov is a very good example of why it can be so important to know the contents of your credit report long before you try to apply for a major line of credit like an FHA home loan or refinance loan. If you are affected by the JP Morgan Chase incident, contact the CFPB as soon as possible by calling them at (855) 411-2372.
Do you have questions about FHA loans? Ask us in the comments section. All comments are held for moderation.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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