An Issue With US Bank, For a Friend

[david_weaver]

Here is one perhaps someone can offer advice on?

 

A friend has a mortgage with US Bank. In September 2010, fell 30 days late. Sent payment for September and October in late October, just before 60 days late. Payment was returned by US Bank (apparently at that level of lateness, must be certified funds) and US Bank immediately sent notice of foreclosure. A Forbearance Agreement was entered into December 2010. Basically, US Bank leveled nearly $5K in legal fees and demanded payment in full of all delinquent months. So the delinquency (which by now was nearly 90 days) was paid in full immediately and the $5K in legal fees were paid by adding an additional $400+ to each mortgage payment for the next year. Sounds like rape to me, but better than losing the home.

 

All payments were made in certified funds by the first of each month during 2011.

 

Fast forward to March 2013. Friend applies for a mortgage, and is OK for FHA, but turned down for conventional because US Bank reports the most recent episode of being 90 days late as January 2012.

 

Friend disputes this with CRAs, and it comes back verified.

 

Letters written to US Bank at address provided by CRAs, and is informed reporting is accurate.

 

Friend starts calling US Bank, talking to anyone and everyone, trying to get an answer. And finally hits gold.

 

Apparently, when an account goes into a Forbearance Agreement, all payments are deposited in a 'suspense' account. This account only gets 'swept' by US Bank every 90 days. So this follows what the credit reports show. Paid up as of 12/2010. Then 30 and 60 behind before next sweep brings it current, then pattern repeats. Apparently, it took longer at the end of the 12-month agreement, as that hit 90-late in January 2012 before returning to current.

 

The issue is, there is nothing in the original loan paperwork, nor in the Forbearance Agreement, which states payments will be applied and reported this way.

 

Basically, the last late payment was 12/2010. With that nearly 30 months old, friend would have qualified conventional. As reported by US Bank, last 90-day was only 16 months ago, so it is FHA or nothing.

 

Can US Bank continue to report it this way? If payments are made in certified funds by the first of each month, does the borrower need to suffer such credit damage due to the lender's accounting practices?

 

If not, any advice on how to get this resolved?

 

 

[david_weaver]

BUMP...

[beli]

Has he talked to US Bank Exectives? That sounds fishy to me.

[david_weaver]

He has not. Best to make that contact by email or phone?

[beli]

He has not. Best to make that contact by email or phone?

I'd email.. outline the issue they'll give him a call back.. make sure he includes numbers he can be reached at.

 

If Executives doesn't resolve the issue then start filing complaints.

Edited May 29, 2013 by beli