My sister recently refinanced her home with her current lender which is Countrywide Home Mortgage. She had a bit of a funky loan and they offered her a better loan at a lower interest rate and she jumped at it. Now here is where the problem starts. Somehow the right hand at Countrywide did not tell the left hand what was going on. In the meantime my sister kept making payments on the new loan as they had told her to do.
All of a sudden she started getting letters from credit card lenders who were dropping her because they said she had delinquent accounts. This was her first clue as we were taught to ALWAYS pay on time; which she has always done. Most of these were cards that didn't even have anything on them. I thought maybe somebody had stolen her identity and told her to get Lifelock. As part of Lifelock's service they provided her with copies of her credit reports. Come to find out Countrywide had reported her as not making her house payment for three months. Not once did Countrywide contact them letting them know that thought they were late making their payments. Personally I thought it was the law that you had to be notified if you were behind in payments but maybe that is not the case. It sure seems like they should have notified her but she received NOTHING from them. As I said she had been making payments on the new loan so she of course had no idea this was going on.
So now that she knew what was going on she called Countrywide. Their first response was "oh you are right we will correct this". No apology! Countrywide did send a letter to the affect that they had reported her as delinquent when she was not. She contacted the credit card companies who had dropped her and was told that she would have to request the credit report from each company then she could submit that report with the letter from Countrywide and each lender could decide whether they wanted to re-instate her account or not.
I could not believe that this was all being dumped on her and Countrywide could just basically say "oops am I bad". I told her she needed to call Countrywide again and see if they could do anything. This time she did get a nice gal who told her she was REALLY sorry that this had happened but there was nothing Countrywide could do; if she could call each lender for her she would but they would not accept the phone call.
Somehow this seems so WRONG. My sister's credit went from 760 to 600 in that short time. Countrywide has contacted the credit bureaus letting them know it was a mistake but there is no easy fix. Now she has all these credit card companies who show they have dropped her which dings her credit. It is a vicious cycle and one that is going to take her months to fix while Countrywide comes off totally unscathed.
I feel so bad for my sister and this has made me realize how important it is to watch your credit on a monthly basis. I think this is a good warning for EVERYONE; especially if you are considering a home purchase. I signed up for Lifelock after I saw what a friend went through when her identity was stolen. For the small amount of money I spend a year for it I'm happy. Lifelock is helping me to watch my credit by locking my accounts but when the problem is within like this one was I don't know what the answer is. To have caught this you would have to be checking your credit on a routine basis. In the age we are living in we just don't know what is around the corner and once your credit is zapped it takes a long time to recover it; even if it is no fault of yours.