Class Action Claims Summit Bank Continued to Report Disputed Info to Credit Agencies

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action alleges Summit Community Bank has unlawfully failed to conduct a reasonable investigation when receiving a qualified written request/notice of error from mortgage borrowers. 

The 20-page complaint moreover alleges Summit has run afoul of the federal Real Estate Settlement Procedures Act (RESPA) by continuing to furnish consumer payment information to credit reporting agencies within 60 days of receiving a borrower’s qualified written dispute notice. According to the suit, RESPA states that servicers, during the 60-day period starting from the date they receive a borrower’s dispute notice, may not provide to any consumer reporting agency any information regarding overdue payments purportedly owed by the individual and relating to their written dispute.

The plaintiffs, Bluefield, Virginia residents, claim to have sent Summit a qualified written request/notice of error, with a return receipt requested, by certified mail in May 2020. The lawsuit claims the signed green card indicating that the letter had been received was never returned to the plaintiffs, and the U.S. Postal Service website showed the letter as being “in transit.” Because the letter was not returned to the consumers as undeliverable, however, it is therefore “presumed to [have] been delivered,” the case says.

The suit charges that Summit, in response to a second error notice from the plaintiffs, failed to correct apparent errors related to the consumers’ mortgage and continued to claim they owed money they did not in fact owe, and failed to suppress the disputed negative credit information as required by law. 

Summit has not responded to either of the plaintiffs’ dispute/error notices, the lawsuit claims, calling the bank’s failure to do so “a plain legal error.” As a result of Summit’s alleged conduct, proposed class members have incurred proximate harm as a result of the bank’s publishing of derogatory and disputed information to credit reporting agencies. 

The lawsuit looks to represent all residential loan borrowers from whom Summit received a qualified written notice/notice of error in the last three years pursuant to the federal Real Estate Settlement Procedures Act and its sections governing loss mitigation procedures. 

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s free weekly newsletter here.