Remove Mortgage Late Payments from Credit Reports (2024)
10 min read
Getting a mortgage late on your credit report can be disheartening and there is too much contradicting information on the internet on what to do next to get this mortgage late removed from your credit report.
This article will teach you my proprietary 4 step D.S.E.L Method on how to remove a mortgage late payment from your credit report. May it be with any major mortgage company including Caliber Home Loans, United Wholesale Mortgage aka UWM, Cenlar FSB, Specialized Loan Servicing aka SLS, Newrez Shellpoint Mortgage, Freedom Mortgage, Mr Cooper Mortgage, Loandepot, Lakeview Loan Servicing, Carrington Mortgage, The Money Source Inc, Amerihome Mortgage, Arvest Mortgage and so on.
I’ve written this article for people who can’t afford my company’s paid services, but can invest a good amount of time to learn and execute this process.
So here is what The D.S.E.L Method entails:
Step 1. Discover: find out of facts (why you were reported late)
Step 2. Strategize & Execute: Choosing what method to use: A “dispute backed by evidence” or a “validated goodwill request” which’s backed by extenuating circumstances and Identification of errors that caused the late payment on your credit report.
Step 3: Escalate: Escalating your complaint with the creditor
Step4: Litigate: Take legal action against the mortgage company
This method took me over 20 years to perfect as a credit repair advocate, through trial and error dealing with every major mortgage lender.
And yes, removing mortgage lates is FAR FROM EASY, unlike what everyone else online leaves you to believe. But this article will be your best tool.
The most dangerous thing about a mortgage late hitting your credit
If you’ve incurred a mortgage late within the last 12 months, you’re in danger of having your other credit cards % lines of credit shut down and your score dropping even more. What’s ridiculously unfair is card companies check your credit report every 3-12 months for ‘re-accessing your credit worthiness..”
If you had good credit prior to the mortgage late, then your score has dropped significantly. You’re now labelled a “high risk” and your other creditors may preempt by either closing out your credit cards or reducing credit limits .
If this happens you’ll have even less available credit and a reduced length of credit history. This will send your score into an endless downward spiral and dash your chances of getting any loans or cards.
Study D.S.E.L method chart & watch my video on mortgage late removal
I’ve flowcharted the D.S.E.L methodology below,. read it carefully. Leave your question in the comment section at the end if it’s unclear.
NOTE Go over this flowchart section by section and watch the video below it before proceeding.
NEXT: Watch this video before proceeding
STEP 1: DISCOVER FACTS: Review your credit report & call mortgage company
Before making a case for removal of the mortgage late payment, get your facts rights. Check your latest credit report history and then call the mortgage company to see what they have in their system and obtain the following information:
1) When and what payment amount was due ?
2) How many days was it late?
3) When and what payment amount was finally made to get the account current ? ( note: if you’re currently past due on your mortgage, immediately make your payment)
4) What month you were marked late for and what led to the late payment that they’re showing in their system?
5)Was the account late due to no payment being made, or was it a bounced check or an auto payment that didn’t go through?
6) Check your credit report to verify what month were you reported late.
7) Finally, combine these facts and write down the entire story in chronological order,
So #7 will help you compile the factual story to make your case. The entire “statement of fact” you write down may look something like this say if had a United Wholesales Mortgage late payment:
” For my United Wholesale Mortgage account (UWM) , June 1st payment due of $1341.54 was not made until July 10th $1381.42, when it had become 40 days late. Payment was late because I made an online payment on June 2nd for $1381.42 which bounced due to insufficient funds”
Now that you have the facts from the lender, compare them with your own records and move on to the next stage.
STEP 2: STRATEGIZE & EXECUTE: use “notice of error” or “validated goodwill letter”
(Use an options below based on your scenario)
If you couldn’t find any mistakes the mortgage company made, skip option 1 and move to option 2.
Option 1: If you found a mortgage company error, send them a “Notice of Error letter”
If the mortgage missed payment occurred due to or in part of your mortgage company’s error, negligence or oversight, then you’re eligible to file a “Notice of error letter” dispute with the lender under RESPA. This may get the late removed. Here are some of the scenarios where you a notice of error letter will work, but you must have proof behind your claim :
- You were locked out of online access to your mortgage account, or the mortgage company’s system been consistently down.
- The company had the wrong spelling of your address or had your street # incorrect , due to which your mortgage statement were returned as “undeliverable” to the mortgage servicer.
- The mortgage company failed to update their system to your new mailing address or email address that you had provided to them before.
- The mortgage company’s phone rep took down your wrong bank account info when processing your payment.
- You set up an auto payment on the mortgage servicer’s websites which was canceled without you knowing OR you had previously set up a deferment with the mortgage company that they approved but still marked you late. (deferments can be granted for natural disasters).
- You paid the mortgage on time, but the mortgage lender failed to post the payment to your account.
- Your mortgage was taken over by a new servicer and you sent your payment to the old servicer
NOTE: Do NOT file a “notice of error” because the mortgage company failed to call you or failed to send you a notice that you were about to be marked late. Although its unfair, the FCRA does NOT require a mortgage lenders to call you or send you a written notice before marking you late on your credit report.
SAMPLE NOTICE OF ERROR LETTER
Name:
Mailing Address:
Date:
FREEDOM MORTGAGE
P.O. BOX 50428
INDIANAPOLIS, IN 46250-0401{Mortgage ac# }
Re: Error Resolution Notice under 12 C.F.R. §1024.35 (Regulation X)
I am writing to request correction of the error described below in regards to the mortgage on my property at {enter your address}.
I was recently marked {# of days} late on my credit report for the payment that was due 1st of {month}
I am disputing the late payment(s) listed above.
The late payment was incurred due to an error that I believe your company is responsible for.
What led to the error was {Explain and expand in DETAIL your story here in as much detail as possible}
Therefore under the Consumer Financial Protection Bureaus’s Regulation X, error resolution process detailed under 12 C.F.R §1024.35, I am requesting that you investigate and correct my credit report by removing the mortgage late payments. Please notify me of the dispute investigation results within 30 days of receipt of this letter.
If you need to contact me, I can be reached at {ph#} or {email }
Sincerely,
Your name
Enclosed: proof of my bank statement showing I had enough funds at time of missed payment
{add any other supporting proof of the mortgage company’s error}
Option 2: If extenuating circumstances caused late, use “validated goodwill letter” below:
So if a third party’s mistake or a life circumstance (other than financial hardship) led to the late then use what I call the “validated goodwill letter.” Thi is likely to get the lender to remove the late(s). You must have documented proof of “extenuating circumstances” and proof there were enough funds in your bank account when you missed the payment
Here are some of the circumstances where a “validated goodwill letter” may work, if you have “documented proof” of any of the following :
- You were hospitalized or suffering from emotional trauma.
- There was a death or emergency in the family.
- Your bookkeeper or accountant forgot to render payment.
- You had set up automatic payments through your own bank, and your bank made an error and did not process.
- Your email was hacked where you get e-statements, or the creditor’s emails ended up in spam.
- Your paper statements and mail was being stolen.
- You had submitted a double payment the month prior, mistakenly thought it would cover the next month.
- Your town was subjected to a natural disaster.
And below is a successful sample letter I’ve used in the past to get results:
VALIDATED GOODWILL LETTER TO REVERSE MORTGAGE LATE PAYMENT(S)
Name:
Mailing Address:
Date:
United Wholesale Mortgage
P.O. Box 619098
Dallas, TX 75261-9741Mortgage ac# _________
Re: mortgage late payment correction
I am a satisfied customer of your company and am seeking help in resolving an issue, which led to a day late payment which was no fault of mine. I understand you consider extenuating circumstances and 3rd party errors to reverse late mortgage payments.
I was late for my mortgage payment by ___ days for the payment due on __.
This happened because ._____________________{ add a reason from the 7 circumstance listed above and add VERY specific details,}.
In addition, I had sufficient funds in my bank account to make the payment, had this circumstance not kept the payment from being made. At the time the payment was due for the month of ____, I had in my bank account ___, which was well beyond the monthly payment amount due of $_____.
I understand under FCRA §1681, you’re to report accurate information. The spirit of law is to ensure that it reflects a person’s credit worthiness to access risk of default. Hence, I’m proving that the late was not due to financial inability or unwillingness to pay.
I have included my bank statement from the time as proof of my financial ability to pay the payment as well as proof of the circumstance that led to the late
Best
Name
Enclosed: copy of bank statement & proof of extenuating circumstance. or proof of 3rd party error
TIPS: The key to this letter working is proof of the third party’s mistake or proof of the extenuating circumstance. If possible, add a copy of your bank statement from the time of the missed payment to prove you had enough money at the time.
NOTE: If you didn’t have extenuating circumstances or errors: STOP and talk to a professional to see if there is a case based on other credit report coding violations
STEP 3: ESCALATE: (use an option below based on your scenario)
Skip Option 1 and move to Option 2 if you sent a notice of error letter.
Option 1: if “validated goodwill letter” was denied, contact mortgage company’s CEO
I’ve been successful when I’ve engaging CEO’s of companies like Carrington Mortgage and Lakeview Loan Servicing. on Linkedin , where I explained the situation and the circumstances surrounding my “validated goodwill request.”
Only use this step AFTER you’ve send in your validated goodwill request with proof .
What will not work is simply saying, ” hey , I’m a great customer I just forgot to make may payment.” That is an example of an “unvalidated goodwill.” This will NOT work.
Instead , you must refer to either a specific extenuating circumstance or a 3rd party error.
For example ” I was late due to a due to a death in the family and I’ve already submitted my family members death certificate on {date} via certified {mail tracking #}
OR ” I was late since my licensed book keeping company failed to render payment and I’ve submitted a letter from my book keeping company to your mortgage company already via certified mail {tracking #} “
Note : do not email the CEO unless you have grounds for a “validated goodwill request” and have already mailed your “validated goodwill request” with proof and got denied by the mortgage company.
Here’s a sample letter to the CEO that I used on Linkedin which worked to remove a late payment :
Hello Mr {CEO name}
I’m a current client with your mortgage company and my home located at {property address}
I had a 60 day mortgage late payment with { mortgage lender}. This was due to my child being hospitalized.
On {date}I have sent correspondence to your company requesting removal of the late payment via certified return receipt mail via {Add mail tracking #}. Enclosed was my child’s proof of hospitalization and copy of my bank statement that was showing a balance of {$ amount}. The late payment still remains on my credit report.
I am requesting that you have your team dig up this request and get the late payment removed that’s been reported for {month} on my credit report.
Sincerely,
Option 2: If “notice of error” letter was denied file CFPB complaint against the mortgage company
DO NOT not use Consumer Financial Protection Bureau (CFPB) for a “validated goodwill request.” Only utilize if there’s an error you can blame on the mortgage lender that played a part in the late payment. Why? Ironically, the CFPB discourages lenders from removing lates based on goodwill requests. If you’re make a “validated goodwill request”, you should instead write to the CEO or executive branch of the mortgage company ( see the next step for that)
The CFPB’s dispute resolution portal sends your complaint to the mortgage lender’s executive branch, and will send back any any responses they get from them . Here’s are the steps to file a CFPB complaint against the mortgage company:
How to file a CFPB complaint against the mortgage company
Step1: Go to the CFPB’s complaint portal
Step2: You will be prompted to put in you personal information.
Step2: You will be asked to verify your email
Step3: You will be asked to identify the type of account you are complaining for. Pick “mortgage” and “other” if you don’t know the “type” of your mortgage.
Step4: You will be asked “what type of problem you have,” simply pick “problem with credit report or credit score,” and answer the additional question.
Step5: You’ll be asked to fill out your complaint details, use the CFPB complaint template below. After submission, you’ll get a response within 15-60 days, although I’ve seen mortgage company’s on average take about 30 days.
Sample CFPB complaint for mortgage late removal due to lender error
CFPB complaint prompt: describe what happened?
On{Date} mailed my notice of error complaint to my mortgage lender {name of mortgage company} under 12 C.F.R. §1024.35 (Regulation X) . The mortgage company failed to correct my credit report that was resulting from this error. The mortgage company initially made an error on my account by _ { describe in detail the fault of the mortgage company}
I have attached a copy of my notice of error letter, along with proof of the error in this complaint.
CFPB complaint prompt: What is the resolution you seek ?
I am requesting that the mortgage company send an update to Experian, Equifax, Transunion and all other federal credit reporting agencies to correct my credit report and remove the late payments they’ve reported to my credit report for the {Month} . I am also requesting that they send me a credit update letter for my records, in the event the credit bureaus re-insert the lates on my credit reports in the future.
Keep in mind that filing a complaint does not guarantee a specific outcome, but it does put pressure on the mortgage company to address your concerns.
If this step doesn’t work, then you’re left with the last step of taking legal action to correct your credit report.
STEP 4: LITIGATE: File a civil suit against the mortgage company or hire a professional
This is the final option, if all else fails.
The key is to find a professional who will only charge you AFTER success and not charge any upfront fees.
Over the last 20 years, I have helped clients remove hundreds of mortgage late payments from their records and have the YELP reviews to show for it
Reach out for a FREE CONSULTATION if you’d like to see if I can help you too !
Click the link below for a consult OR for questions email me at [email protected]
FREQUENTLY ASKED QUESTIONS
How long does the mortgage late stay on the credit report
Any late payments will remain on your credit report for seven years from the time it was incurred. .
When does the score start to improve ?
Generally, you’ll recover half the lost points within a 24-36 month period. Grated that you maintain perfect overall credit from there onwards.
Example, if a 740 score drops to 640 due to a mortgage late, soon as the account becomes current again , they’ll gain maybe around 20 points. After that, the score would increase about 15-20 points yearly over the next 2 years. However, a single new late payment or deliquent account will eradicate those gains.
How many points does a mortgage late payment drop your score by ?
I feel the credit scoring system is very unfair to people with good credit scores, due to the additional financial repercussions they have to deal with. The score impact due to a missed mortgage payment varies according to someone’s prior credit history and score. A person with a good score will have a much more severe drop in score, as compared to a person with an already low score.
For example, Alex, a prior customer of mine, with perfect credit history had a great 740 credit score,. He missed a payment with Specialized loan Servicing. His Fico Scores (most commonly used version of credit scores by lenders) dropped over 80-100 points, thereby destroying his perfect credit.
What’s worse, within a 60 days, Alex’s credit card issuers closed down 3 of his credit cards and 2 other companies reduce his credit limits, This happens because card companies check your credit report every 3-12 months for ‘account review’ purposes.
His oldest tradelines were shut down. He ended up having less available credit and a reduced length of credit history. This kept dropped his credit score for months to come
On the contrary, if Alex had a below average credit history and score in the 500s, a new missed mortgage payment would have only dropped his credit score 10-20 points.
Does a goodwill letter work to remove a missed mortgage payment ?
No… although it may have worked for some in the past for some, but in the current age, asking simply for a late payment forgiveness or writing a goodwill letter to the mortgage lender does NOT work. Want proof ? Bank websites like the one I’ve linked to here clearly state they’re “not able to honor request for goodwill adjustments” However, I have found that a “validated goodwill letter” or a “notice of error letter’ may work .
Here’s why goodwill don’t work : The CFPB has been pushing lenders to follow the Fair Credit Reporting Act, which requires all lates to be reported in an accurate manner. and requires them to remain in your report for seven years. So, lenders always tell consumers “according to the FCRA, our late mortgage payment policy doesn’t allow us to remove accurate late payments off your credit file.”
Over the last 20 years, I’ve seen hundreds of people send out generic goodwill letters and barely any have gotten their late payments removed. For approximately every 30 generic goodwill letters sent out, only one has worked, and that too probably because the mortgage company may have realized they made an error in not processing the consumers payment on time.
Likewise, to write a successful remove goodwill removal letter, it needs to be a “validated goodwill letter” where you need to prove either extenuating circumstances OR provable third party errors .
I discuss this in detail in the sections below section.
Should you do a credit bureau dispute to remove your mortgage late payment?
Gone are the days where a simple credit bureau dispute got lates off. Credit bureau disputes DO NOT work, despite some people online sharing rate success stories, here’s why…
I’ve done thousands of credit bureau disputes for clients. , For every 30 credit bureau disputes for mortgage lates only 1 or 2 would be successful and often be reversed the following month.
Yes, the FCRA gives you the right to dispute information, but what’s unfair is that when you dispute an account, the credit bureau investigation simply delegates the decision to the mortgage company.
For example following a credit bureau dispute , Experian will merely ask your mortgage company through system called e-oscar whether you were late or not. Contrary to popular belief, the lender is not required to provide any proof to Experian. They simply have to verify, either yes or no. And they do so with relative ease.
You’ll read a lot on the internet that if mortgage companies don’t respond to a credit bureau dispute within 30 days, the bureaus must delete. True, but mortgage companies, spend millions on their credit bureau reporting departments and they are always in FCRA compliance.
The only way a mortgage company won’t respond to a dispute, is if there is no record of you in their system, due to the mortgage company having purged your account records.
In conclusion, if the mortgage company is showing you as late in their system, then disputing with the credit bureaus won’t work.
What if you’ve been more than 60 days late or have numerous mortgage lates ?
If you have payments made over 60 day late appearing on your credit report, you may be able to remove them. You need a “validated claim” for removal or you have mistakenly reported late payments
This process will NOT work, if you have several scattered late payments over the years on your mortgage. If that is the case, the account may be removed with our professional help once the account is paid off.
When is a late mortgage payment reported to your credit report?
A mortgage payment is will only be reported late to the credit bureau if it is made 30 days after the due date, It may however incur a lat payment fee once its 15 days late
For instance, Cathy’s Newrez Shellpoint Mortgage statement shows a payment due on July 1st. Hence, she has 30 days or until from July 31st to pay before she late over 30 days. She won’t be marked late on her credit report if she makes her mortgage payment 1 day later on July 2nd or even 27 days after on July 28th .Some mortgage companies like Caliber Mortgage state you’re to make your payment within the calendar month.
Let’s assume Cathy makes her July mortgage payment on July 29th, then she will not be marked late by Shellpoint mortgage. However, Shellpoint may tack on a “late payment fee,” because mortgage lenders only allow a 15 calendar day “grace” period to avoid a mortgage late penalty fee.
So to simplify it:
July 1st: payment due date
July 15th: mortgage late payment penalty fee assessed (but not reported late to credit bureaus)
July 31st: reported late to credit bureaus (for missed June 1st payment )
Will a mortgage company remove a late payment from your credit ?
With certain circumstances present present, the mortgage companies will instruct the credit bureaus to remove the late payments from your credit report. Especially, if have made consistent on-time payments before the 30 days late incident.
So in order to remove a missed mortgage payment, you’ll need to make a good case, using a “validated goodwill request” that revolves around provable extenuating circumstances( life events). Another options is a “notice of error” argument based on mistakes made by the lender in servicing your loan. In this article, I’ll go over exactly how to make that case for either of those .
What will NOT work is generic goodwill requests to the mortgage company or online disputes with the 3 credit reporting agencies . More on that below.
Hire a legal professional to remove mortgage lates
Over the last 20 years running Imax Credit Repair , I have helped thousands of clients remove late payments and have the Yelp Reviews to show.
My Guarantee. if we don’t remove the late , you don’t pay!
Reach out if you’d like to see if I can help you too!
Click the link below for a consult or for questions email me at [email protected]