“Dear Steve,
I lost my job and we had to file bankruptcy in 2011. As of August we were discharged form everything including 1st and 2nd mortgage. Our 1st is 242000.00, 2nd is 43000.00. Our home value is below 200000.00. During the bankruptcy BOA transfered our loans to new lenders, the second went to greentree and is reporting correctly on our credit report as discharged in bankruptcy $0 balance. The first however with M & T mortgage is listed just like a new mortgage and shows late and BOA is reporting transferred loan and also discharged in bankruptcy. We have stopped paying the second as we know they don’t want to lose money but are paying on the first.
I want to know if the 1st mortgage can legally be reporting the way they are and what needs to be done to correct it, I have disputed with the credit bureaus and threatened the lender and they respond that the loan was transferred just after the discharge so they are not bound by the bankruptcy of BOA. Is this true? What do I do? Thanks
Cliff”
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The Answer
Dear Cliff,
Why are you paying on the first mortgage?
If the loan was discharged in bankruptcy you don’t owe the mortgage and paying it doesn’t get you anywhere unless you have some written agreement with the current mortgage holders.
To correct the credit report all you need to do is send a copy of your bankruptcy filing to the three major credit bureaus and dispute the listing.
I always suggest a consolidated credit report to make it easiest to spot errors and move ahead with disputes. All the dispute information will be with your consolidated credit report.
You can also confer with your bankruptcy attorney but they will probably tell you the same thing.
The problem now is that while the mortgage is discharged, the house may still be in your name with a now clouded title. You have no equity position in the property and without clearing the mortgage cloud liens you will remain on the hook for taxes, insurance, and utilities as long as the property is in your name.
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