Collection items that appear on your credit report can be inaccurate. Sometimes they are accurate, but you still do not see eye to eye with the debt collector that placed the item on your credit report. When that happens, the debt collector has a duty to flag its collection item on your credit report as “Disputed.”
But, when you go to apply for a mortgage loan, you cannot have any items flagged as disputed on your credit report. So how do you get the dispute flag removed from your collection items? You write a letter to credit bureaus and tell them that you no longer dispute the collection item.
Is it legal for a debt collector to refuse to remove a dispute flag from your credit report when you no longer dispute it?
Short answer: No.
It’s a violation of the Fair Debt Collection Practices Act to knowingly misreport information on a consumer’s credit report. When a consumer no longer disputes a collection item, the dispute flag then becomes incorrect, right?
Some very aggressive debt collectors, knowing that a consumer is applying for a mortgage loan, have refused to remove the dispute flag from the consumer’s credit report, even after the consumer has told them that the debt is no longer disputed. The debt collector or collection agency has decided to hold the consumer’s mortgage loan as hostage until the consumer pays off the debt. This is beyond aggressive…it’s a violation of the FDCPA.
What you should do if a debt collector is holding your mortgage loan hostage?
Contact us and we will file a lawsuit against the debt collector. Once a debt collector is served with our lawsuit, they typically hire a lawyer who explains the facts of life to them, including the actual damages they are causing the consumer by refusing to remove the dispute flag.
These lawsuits are quick. Under the law, the defendants have to pay our fees and costs. They are resolved pretty quickly because the longer the debt collector prevents your mortgage from closing, the more emotional and financial damages it will be liable for.
If a debt collector is refusing to remove a Dispute flag from a collection item on your credit report, call me, Attorney Gary Nitzkin for a free, no obligation consultation. You can also email me at [email protected]