Topic: Fair Credit Reporting Act (FCRA)
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What is the statute of limitations for collecting on a mortgage loan? Are we required to notify a borrower that we will continue collecting on a loan after charging it off? Also, for how long should we continue to report a charged-off mortgage loan to consumer reporting agencies?
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The statute of limitations for collecting on a defaulted promissory note or foreclosing on the mortgaged property is ten years, though slightly different statutory provisions apply in either case. If you are collecting on the promissory note, the statute of limitations is ten years after the claim accrues. If you are foreclosing on the mortgaged…
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We are purchasing a portion of a pool of consumer mortgages and wanted to do a soft credit pull for the borrowers on the underlying loans. Do we have a permissible purpose to pull the reports under the FCRA, even though we have not obtained the consumer’s consent?
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Yes, we believe that your institution has a permissible purpose for pulling the credit report. A permissible purpose exists when your institution “intends to use the information, as a potential investor or servicer . . . in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing…