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Jury Returns $2.5 Million+ Jury Verdict Against Ocwen Regarding Equifax Credit Report

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, Experian and 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.

At trial 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.