Consumer complaint received 2023-09-26
Company: Experian Information Solutions Inc.
State: VA
Product: Credit reporting or other personal consumer reports
Sub-product: Credit reporting
Issue: Incorrect information on your report
Sub-issue: Account status incorrect

Complaint:
XX/XX/XXXX - my loan officer with XXXX notified me that my two timeshares were being incorrectly reported as mortgages on my Experian credit report. Because of 90-day delinquencies within the last 12 months, this would prevent me from getting approved for the FHA mortgage financing for my upcoming home purchase. He pointed out that timeshares are not mortgages, but installment loans and asked if I could contact them and/or Experian to try to get the reporting corrected so I could qualify for the mortgage loan. 

I contacted XXXX XXXX XXXX XXXXXXXX and requested the reporting change. I was told the loan was a mortgage and they would not change the reporting. 

I contacted XXXX XXXX XXXX and requested the reporting change. I was told the request would have to be submitted by letter and they could take up to 30 days to respond. I explained that I was currently under contract for a home purchase and trying to obtain financing and therefore the situation was time-sensitive. I was told again that I needed to submit a letter. 

I contacted Experian directly and requested a correction. They opened a dispute with each company, respectively and informed me the companies would have up to 30 days to respond. 

XX/XX/XXXX - I submitted my purchase agreements for both XXXX and XXXX to my loan officer. He planned to contact Experian directly and request the change. 

Having done research, I also provided my loan officer with documentation supporting HUD, FHA, and XXXX mortgage definitions and credit reporting requirements and/or guidance for lenders when timeshares are incorrectly reported as mortgages on consumer credit reports. I am happy to provide this source documentation but it exceeds 50 pages. In sum, what I provided included : HUD Handbook 4000.1 FHA Single Family Housing Policy Handbook See : II.A.4.b.iv. ( H ) ; II.A.5.a.iv. ( G ) FHA Single Family Housing Policy Handbook GLOSSARY See : Definitions : Installment Loan XXXX XXXX Selling Guide XXXX XXXX  Single Family See : Origination through Closing, Subpart B3 : Underwriting Borrowers, Liability Assessment, Monthly Debt Obligations, Installment & Revolving Debt How is a timeshare account treated? 

See : Origination through Closing, Subpart B3 : Underwriting Borrowers, Chapter B3-2 : Desktop Underwriting ( DU ) Why are there instances where DU is considering a timeshare a mortgage? 

See : Origination through Closing, Subpart B3 : Underwriting Borrowers, Chapter B3-5.3-09, DU Credit Report Analysis , Mortgage Delinquencies How to instruct DU to disregard an inaccurate mortgage late FHA Office of Single Family Housing Training Module Module 4 : Manual Underwriting of the Borrower See : slides 76, 78 9/23 - I was notified by Experian the dispute was closed. XXXX XXXX XXXX XXXXXXXX confirmed they were reporting correctly as a mortgage. 

In response, I uploaded the FHA handbook and Fannie Mae selling guide, as evidence that timeshares were not mortgages as well as my purchase agreements, which both clearly state timeshare throughout. 

XX/XX/XXXX - My loan officer informed me he was unsuccessful in his attempt to work with Experian directly. The response from them was : First reply I have received your request for rescore, however I am not able to process your request for the following reason ( s ) : The Creditor XXXX XXXX XXXX/ XXXX XXXX reported the account typed information to the bureaus as MORTGAGE. XXXX  is not able to request the account type be changed to INSTALLMENT on timeshares to meet underwriting requirements. 

Second reply We understand what you are trying to accomplish. Unfortunately, XXXX is not able to request an update to change the loan type ( from Mortgage to Installment ) to allow XXXX approval. The account type MORTGAGE was reported by both creditors to the credit bureaus. If the lates reported in error, XXXX can submit a request to remove the lates and update the status to AS AGREED. Perhaps that update will allow you to obtain XXXX approval. 

Please note my loan officer never mentioned XXXX. 

Today XX/XX/XXXX - at this point I am running out of options and my purchase is in danger of falling through. I am researching non-QM options and my loan officer is doing the same ; however, this system where the credit bureaus confirm the accuracy of reporting with the company doing the reporting is fraught with challenges for consumers. 

Additionally, as I personally have experienced, these timeshare companies are never fully transparent when hooking consumers into costly and permanent arrangements, and then leverage consumer behavior in their favor by reporting these installment loans as mortgages to credit bureaus. 

At this point, it may be too late for you to help me resolve this specific issue but I would request that you do a deep dive into the scam that timeshares are and how they are causing financial harm to consumers and keeping many from the dream of homeownership through inaccurate credit bureau reporting. This apparent collusion between Experian and the timeshare industry should also be investigated. 

Thank you and I am happy to provide any information necessary.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation