Mortgage foreclosures have become common since the housing bust in 2008. However, a new trend emerging shows that some of the more recent foreclosures are a result of potentially unscrupulous lenders, including private entity investment companies who buy and manage mortgage loans.

In some cases, lenders have been accused of predatory lending practices, mortgage loan fraud, and unfair and deceptive mortgage loan modifications. These alleged violations result in wrongful foreclosures and inaccurate credit reporting.

If a lender violated your rights, you may have the right to sue them and, if you win the case, you could receive $1,000 or actual damages (whichever is greater), and they must pay your attorney fees and out-of-pocket costs.

Here are steps you can take if you find yourself in this situation:

Step 1 – Understanding Your Rights

You have rights under federal laws. If those rights were violated, you may have the right to seek monetary damages.

• The Fair Debt Collection Practices Act (FDCPA) is a federal law which protects consumers against unfair debt collection practices, such as harassment.
• The Fair Credit Reporting Act (FCRA) is also a federal law which protects consumers against credit reporting errors and failure to conduct a reasonable investigation of disputes to resolve the errors.
• The Telephone Consumer Protection Act (TCPA) is a federal law that protects consumers from unsolicited phone calls and text messages.

Step 2 – Creating a Case File

Start by gathering the information regarding the events leading up to your current situation. The sooner you can begin to document the details, the better.

• A timeline of events.
• Logs of any phone conversations with dates, names and phone numbers of any representatives you spoke to, and notes on what information they gave you.
• Copies of any email or letters received from or sent to the lender.
• Your most recent credit report from all credit reporting agencies.
• Any evidence of the fraud or deception.

Step 3 – Correcting Credit Reporting Errors

If your credit report has any errors or inaccuracies, contact each of the credit reporting agencies to get the errors corrected. Under the Fair Credit Reporting Act, after a consumer disputes the accuracy of his or her report, each agency is required to investigate the dispute within 30 days and report the results of the investigation.

In some cases, these credit reporting errors can lead to separate lawsuits against each of the credit reporting agencies and the bank or lender, particularly if the bank or lender knew that they had submitted inaccurate information and all three agencies failed to correct the mistakes.

The common credit reporting agencies are:

• Equifax
• Experian
• Transunion

Step 4 – Reporting Fraud to the Appropriate Agencies

In some cases, reporting fraud to the various state and federal agencies may be helpful, and could prevent similar fraudulent activity against another unsuspecting consumer.

• Mortgage Fraud: The US Department of Housing and Urban Development (HUD) Office of the Inspector General is responsible for investigating suspected fraud, waste or abuse in HUD programs or operations.
• Lending Fraud: Filing a complaint with the Federal Trade Commission will also enter the fraud into the Consumer Sentinel Network so that law enforcement can stop ongoing fraud and track these crimes.
• Mortgage Loan Modification Fraud: The Loan Modification Scam Alert Campaign was launched in 2009 after Congress asked NeighborWorks America to help educate homeowners and offers links and phone numbers to report loan modification scams.
• Consumer Fraud: Report fraud by filing a complaint with the Attorney General’s Consumer Protection Unit for a consumer problem, such as bill disputes, mortgage servicing or foreclosure issues.

Step 5 – Seek an Attorney

If you are compiling your case and/or taking the proactive steps above, and still need legal counsel, your diligence in documenting your case will be very valuable. If you have a discharged Chapter 13 bankruptcy and are struggling to have it removed from your credit report, Fields Law can help.