Friday, October 3, 2014

Banks accused of falsely reporting short sales

WASHINGTON – Oct. 3, 2014 – A federal judge refused to throw out a lawsuit by borrowers who claim their banks wrongfully notified credit-reporting agencies that they had gone through bankruptcies or foreclosures that were actually short sales.

The judge said that Wells Fargo and Citigroup must face accusations in court from thousands of homeowners who accuse the banks of allegedly providing inaccurate information to a credit-reporting agency and jeopardizing consumers' ability to get new loans.

A spokesman for Citigroup denied the allegations, and a spokesman for Wells Fargo had not yet responded to media calls for comment.

The lawsuit, filed by borrowers, alleges reporting inaccuracies to credit-reporting agency Experian after borrowers sold their homes in a short sale. A group of mortgage customers from Citigroup and Wells Fargo are accusing the banks of failing to report the transactions as short sales to Experian, but instead reporting them as foreclosures or bankruptcies.

They also allege in the lawsuit that the banks failed to correct reports when disputed, and that the inaccurate reporting greatly impacted borrowers' credit scores.

Experian was also named as a defendant in the lawsuit, accused by borrowers of failing to properly investigate when borrowers complained.


Source: "CitiMortgage, Wells Lose Bid to End Lawsuit Over Credit Reports," Reuters (Oct, 1, 2014)

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