Consumer complaint received 2018-03-26
Company: Ocwen Financial Corporation
State: DC
Product: Mortgage
Sub-product: FHA mortgage
Issue: Incorrect information on your report
Sub-issue: Account status incorrect

Complaint:
Despite over four years of on-time payments, on XX/XX/XXXX my credit monitoring service alerted me that Ocwen Loan Servicing, LLC had reported my 2nd mortgage as " Charged-off/Closed '', despite it being current and in good-standing for over four years. 

The Issue : In their investigation of XX/XX/XXXX, Ocwen claims that : " The account records available from [ the previous mortgage holder ] XXXX indicate the loan was placed in a charge off status on XX/XX/XXXX ''. 
Thus, Ocwen 'retroactively ' marked my 2nd mortgage as " charged-off/closed ''. However, their records are incomplete. 

Written Proof That XXXX Removed Charge-Off Status in XX/XX/XXXX: I have in my possession a signed letter from XXXX datedXX/XX/XXXX ( over 1 year after Ocwen 's claim that my loan was in 'charge-off ' status ), declaring that the loan was 'REMOVED FROM CHARGED OFF STATUS ' as of XX/XX/XXXX. 

I also kept a log of telephone conversations with XXXX customer service from XXXX, XXXX, where they explained that this was an unfortunate internal clerical error ( which is why XXXX never reported my loan to the credit bureaus as 'charged-off ' in XXXX : it was an internal error ). When they discovered this clerical error in XX/XX/XXXX, they removed it from charged-off status and sent me verification in-writing that my loan was not charged-off ( see attached PDF of the original hand-signed letter and post-marked XXXX envelope ). 

Impact from Ocwen 's Improper Actions : - On XX/XX/XXXX my credit score of aprox. XXXX initially fell by -81 points. 
- On XX/XX/XXXX, Ocwen ordered the retroactive removal of 4 years of on-time payment history from my credit report from XXXX XXXX, causing another 50 point decline. 
-Ocwen ceased reporting my continued, timely monthly payments. 
... as a direct result of Ocwen 's actions : -XXXX XXXX immediately sold my first mortgage to a tertiary loan servicing company on XX/XX/XXXX. 

XXXX with XXXX 's Mistaken 'Charge-Off Status ' : Attached is a signed letter from IndyMac/OneWest dated XX/XX/XXXX, clarifying that " the above referenced loan has been removed from charge-off status as of XX/XX/XXXX. '' According to XXXX customer service, my 2nd mortgage had been mistakenly listed on internal records only as " C '' ( charged-off ) instead of " M '' ( modified ) during a 3-month trial payment schedule during a XXXX loan modification application ( ... which was approved ). Due to XXXX 's clerical error, the loan was marked - internally - as 'charged off ' even though I was making payments as-instructed to participate in the loan modification program. Because it was only recorded that way 'internally ', XXXX never reported it to the credit bureaus as charged off ( ... because it was NOT, in-fact, charged-off ). 

After alerting XXXX that I received a letter from a collection agency on XX/XX/XXXX ( for a loan that was clearly current, and for which they had just happily approved a loan modification ), XXXX immediately identified the situation as having been a clerical error. On XX/XX/XXXX XXXX issued the attached letter negating the mistaken charge-off status of the previous year. This letter from XXXX rescinding any previous action - combined with the fact that it was never reported to the credit bureaus because it was a mistake - nullifies Ocwen 's claim that my loan was ever charged off. 

Aside from the 'abbreviated ' trial payments I was instructed and obliged to make during the three month trial period for the loan modification applications, the attached records show that I have a perfect payment history dating back to XXXX of XXXX.

Company response to consumer: Closed with explanation