Mortgage Servicer’s Inaccurate Credit Reporting Results in a Violation of the Discharge Injunction

As reported by Robin Miller of CBAR, a mortgage servicer’s change in the reporting of the Chapter 7 debtor’s mortgage obligation to credit bureaus heavily suggested that the servicer sought to collect a discharged debt from the debtor, and the servicer’s additional contacts with the resulted Violation of the Discharge Injuncition. While the predecessor servicer reported the debt as closed, with zero past due and zero outstanding balance, the current servicer reported the debt as “open” with a “balance” of $254,699 and a “past due amount” of $90,060.

The servicer’s reports were “blatantly inaccurate from the start,” as, long before the servicer took over from the prior servicer, the debtor’s personal liability had been discharged in his bankruptcy case and his in rem liability was extinguished when the mortgage was foreclosed. Moreover, the servicer’s subsequent mortgage statement sent to the debtor unambiguously sought to collect a debt. In re Zine, — B.R. —-, 2014 WL 5426628 (Bankr. D. Mass. , Oct. 22, 2014) (case no. 1:08-bk-16984).

 

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