Lawsuits for Deficient Mortgage Payments in Credit Reports
Last Updated on August 28, 2023
Investigation Complete
Attorneys working with ClassAction.org have finished their investigation into this matter.
Check back for any potential updates. The information on this page is for reference only.
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At A Glance
- This Alert Affects:
- Anyone in Arizona whose late mortgage payment was listed on their credit report and anyone in California who had a deficient payment stemming from a foreclosure or short sale listed on their credit report.
- What’s Going On?
- Arizona and California have anti-deficiency laws that prevent lenders from collecting delinquent mortgage payments, yet these payments may still be showing up on consumers’ credit reports. Attorneys are now investigating whether class action lawsuits can be filed over the issue.
- How Can a Lawsuit Help?
- A class action lawsuit could help remove late payments and deficiencies from consumers’ credit reports and provide compensation for any damage to their credit.
If you live in Arizona or California, you should be protected from having certain late mortgage payments or deficiencies included in your credit report.
But it’s possible that credit reporting agencies and lenders may not be handling these late payments properly, and attorneys working with ClassAction.org are investigating whether class action lawsuits can be filed to restore damage to borrowers’ credit due to negative reporting.
Anti-Deficiency Laws
Some states have anti-deficiency laws that aim to protect mortgage borrowers from having to make mortgage payments after their homes are foreclosed upon.
For example, if a borrower is delinquent in their mortgage payment and their home is foreclosed upon, the lender obtains the title to their property. The home is then usually sold in order to pay the mortgage, but there is sometimes a deficiency between the sale price and the balance left on the mortgage.
Anti-deficiency laws protect the former homeowner from being held responsible for paying the difference.
If you live in California and your home was subject to a foreclosure or short sale, any deficiency from the transaction should never appear on your credit report. That’s because under the state’s anti-deficiency law, you are not liable for it.
Arizona’s anti-deficiency law is even more protective. If you live in Arizona, even late mortgage payments should not appear on your credit report.
If you believe your rights under California or Arizona anti-deficiency laws were violated, a class action lawsuit may be able to help.
How Can a Class Action Lawsuit Help?
If successful, a class action lawsuit could help remove late payments or deficiencies from your credit report. It could also help pay you back for any damages you suffered due to your lowered credit, including being denied for a loan or having to pay a higher interest rate.
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