A jury returned a $2.5 million+ jury verdict for
Ocwen Loan Servicing's failure to properly investigate a consumer's dispute of a foreclosure
appearing on his
Equifax credit report.
David Daugherty’s lawsuit complaint alleged that he had a mortgage
loan that became due in July 2014, with a balloon payment of $80,000.
While seeking to refinance his mortgage to avoid the balloon payment,
Mr. Daugherty ran into trouble. He learned that
Ocwen had reported to
Equifax that his loan was 120 days delinquent in March, June, July, October, December
of 2013, and January 2014.
Ocwen reported conflicting information about an account, one line accurately
stating the consumer was not behind on payments, and another falsely showing
it was in foreclosure.
Mr. Daugherty disputed the false information to each of the three major
credit reporting agencies (Equifax,
Transunion), as well as
Ocwen. And despite the fact he was not behind on the loan,
Equifax continued to report the account as delinquent, noting “foreclosure
process started.” As a result of
Ocwen not properly investigating the dispute and correcting the information with
Equifax, Mr. Daugherty was unable to refinance his mortgage, and faced losing
his home, since he was unable to make the $80,000 balloon payment.
Mr. Daugherty’s lawsuit complaint alleges
Ocwen failed to properly reinvestigate his disputes, failed to assure accuracy
of credit reporting information, and reported information it could not
verify. The case was originally filed in state court, but was removed
to federal court, where it was assigned case number 5:14-cv-24506 since
it involved the Fair Credit Reporting Act, a federal law the protects
consumers from false credit reports, failures to properly investigate
disputes of credit reports, etc.
Ocwen claimed that its investigations into the dispute were adequate, and that
it did nothing wrong. It argued that its duty to investigate a consumer's
dispute was done once it looked at
Equifax's brief numerical dispute code, and it didn't need to do anything more.
This was despite the fact
Ocwen was repeatedly reporting to Equifax this conflicting information about
whether the account was current or in foreclosure.
The jury in the
United States District Court, Southern District of West Virginia disagreed with
Ocwen, and awarded the consumer $6,128 in compensatory damages, and $2.5 million in
punitive damages for willfully violation the
Fair Credit Reporting Act. Also, the jury reached this verdict despite the fact the consumer had
other negative information on his credit report that hurt his credit score,
and the fact that he had lived in the home free for over a year.
Punitive damages have the purpose of deterring companies from engaging in the bad conduct
that caused the lawsuit. However, whether Ocwen will improve its procedures
remains to be seen.
The three major credit bureaus, and Ocwen, have been repeatedly sued by
consumers who claim improper investigations and false information on credit
reports have hurt their credit scores and have prevented them from buying
homes, cars, obtaining credit, or moving on with their lives after bankruptcy.
If you have a credit reporting problem we would be happy to talk to you.
Give us a call 888-468-7608.