FCRA Claims Over Erroneous Mortgage Debt Reporting Allowed To Proceed.

Source: https://www.lexislegalnews.com/articles/65746/fcra-claims-over-erroneous-mortgage-debt-reporting-allowed-to-proceed

Mealey's (August 12, 2021, 1:50 PM EDT) -- TAMPA, Fla. — A federal judge in Florida on Aug. 10 denied a mortgage lender’s request to dismiss claims in a Fair Credit Reporting Act (FCRA) lawsuit alleging that the lender inaccurately reported borrowers’ missed payments as delinquent, ruling that the borrowers have sufficiently shown that the lender’s reporting was inaccurate and misleading.

(Samah Abukhodeir, et al. v. AmeriHome Mortgage Co., et al., No. 21-563, M.D. Fla., 2021 U.S. Dist. LEXIS 149742)

(Order available.?Document #85-210823-020R.)

U.S. Judge William F. Jung of the Middle District of Florida agreed with the borrowers’ argument that although they did not make their mortgage payments on time, those delinquencies were not their fault because their lender, AmeriHome Mortgage Co., had inexplicably removed the borrowers from the lender’s automatic payment plan without notifying them.

Judge Jung also agreed with the borrowers — Samah T. and Summer T. Abukhodeir — that AmeriHome’s attempts to prove who was responsible for the late payments are premature at this stage of the litigation and better suited for summary judgment.

Finding that the Abukhodeirs have adequately pleaded “that AmeriHome’s reporting was misleading,” Judge Jung held that the Abukhodeirs “have alleged that they enrolled in AmeriHome’s autopay program; they had sufficient funds to make their mortgage payments; they gave AmeriHome the authority to withdraw the funds from their account; and AmeriHome inexplicably failed to process their automated payments.?Plaintiffs also allege that AmeriHome promised to delete any late fees they had incurred and promised to help them correct any related issues.”

“Accepting these allegations as true, which the Court must at this stage, AmeriHome was responsible for Plaintiffs’ late payments and even acknowledged its responsibility to some extent.?So it is thus plausible that AmeriHome’s continued reporting of the late payments could have given potential lenders a false impression that Plaintiffs were responsible for the delinquencies and a credit risk, an impression Plaintiffs say manifested itself as evidenced by their claimed damages,” Judge Jung said.

Mortgage Obtained

The Abukhodeirs obtained a mortgage loan from AmeriHome Mortgage Co. and set up repayment of their mortgage through the lender’s automatic payment program.

The Abukhodeirs contended that although their monthly $616 payment was routinely deducted from their bank account for several years, they received information from credit reporting agencies (CRAs) Experian Information Solutions Inc., Equifax Information Services LLC and Trans Union LLC that their credit scores had dropped significantly due to a delinquency on their mortgage payments.

The Abukhodeirs alleged that they contacted AmeriHome to address the issue and were told that their automatic payments had not been processed for a period of time but that AmeriHome would delete any late fees the Abukhodeirs incurred and help them resolve the issue.?However, the Abukhodeirs asserted that AmeriHome continued to report the late payments to the CRAs.

The Abukhodeirs filed written disputes with AmeriHome and the CRAs, challenging the allegedly inaccurate reporting, and the CRAs informed AmeriHome of the disputes, but the Abukhodeirs averred that the inaccurate reporting continued, resulting in damages to them as a result of their lower credit rating.

The Abukhodeirs sued AmeriHome and the CRAs in the District Court, stating a claim in their amended complaint for violation of the FCRA, 15 U.S.C. § 1682 et seq.?

AmeriHome moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), Fed. R. Civ. P. 12(b)(6), for failure to state a claim for relief, arguing that its reporting was accurate and that even if the Abukhodeirs could allege a reporting inaccuracy, they have failed to sufficiently plead facts establishing that AmeriHome’s investigation of the disputed information was unreasonable.

Opposing Argument

In denying the motion, Judge Jung also found AmeriHome’s “attempt to refute that it was at fault for Plaintiffs’ late payments is . . . unavailing and premature.”?This is so, the Judge opined, because “the question of who was at fault for the late payments is one better suited for summary judgment.”

Judge Jung held that AmeriHome may provide the District Court with copies of notice letters that it has attached to its motion to dismiss at the summary judgment stage, but “not now.”

Moreover, Judge Jung opined that the Abukhodeirs have sufficiently pleaded that AmeriHome “failed to conduct a reasonable investigation by point to the errors in the post-investigation reporting” because “[t]he details of AmeriHome’s investigative procedures are solely within its knowledge and will not be revealed until Plaintiffs begin discovery.”

“Plaintiffs have alleged that AmeriHome continued reporting the late payment information even after reviewing its records and conducting an investigation.?This is sufficient for the Court to infer that AmeriHome’s investigative procedures were unreasonable.”

Counsel

The Abukhodeirs are represented by Jonathan Benjamin of Benjamin Law Practice PLLC in Weston, Fla.

AmeriHome is represented by Anthony R. Yanez and Nicole R. Topper of Blank Rome LLP in Fort Lauderdale, Fla.

Equifax is represented by Tonya M. Esposito of Seyfarth Shaw LLP in Washington, D.C.

Trans Union is represented by Alexandria Epps of Quilling, Selander, Lownds, Winslett & Moser PC in Plano, Texas.

Experian is represented by Maria H. Ruiz of Kasowitz Benson Torres LLP in Miami.

(Additional documents available:?AmeriHome motion to dismiss with attachments.?Document #85-210823-021B.?Abukhodeirs’ opposition brief.?Document #85-210823-022B.?Amended complaint.?Document #85-210823-023C.)