Let’s imagine the following scenario: You have a Jumbo mortgage with Bank of America. You are a good customer, do your banking with BofA, and you have never missed a payment. In fact, you always send your mortgage in on time.

But this fraudclosure mess has you curious. You wonder who actually holds your note, how many times its been sold, what MERS involvement is.

With your curiosity piqued, you decide to ask Bank of America where your actual mortgage note is, and who is holding it.

That is what long time BP reader SM did. He writes in to note what happened:

“FYI Just to let you know I ended up doing Where’s the Note and it resulted in this for me, see the 2 reported disputes in the attached screenshots below for my Jumbo 1st mortgage. 40 point hit on my scores. I will be speaking with an attorney soon. We need to get a warning out (SEIU has not responded).”

That is astonishing –

SM included a snapshot of his Credit report (Nice payment history!):

BAC reporting to Experian and Trans union


Looks like a job for Elizabeth Warren . . .

Category: Credit, Legal, Regulation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

42 Responses to “Where’s the Note? Leads BAC to Ding Credit Score”

  1. wally says:

    Looks like a job for Elizabeth Warren . . .

    Looks like some credit raters are setting themselves up to get sued… and to lose.

  2. number2son says:

    Lemme get this straight: the very act of asking for information about your mortgage resulted in a hit to your credit score?

    Jebus, just when you thought the banksters couldn’t possibly sink any lower.

  3. call me ahab says:


    interesting- but I wonder- if once you ask then they need to send it up the chain to their legal department who then are required to indicate that the account is in dispute (as there is a question of who owns the note)-

    you have a law degree- doesn’t that make sense?

  4. KentWillard says:

    By wanting to know if the servicer has the note, aren’t you questioning if the servicer has the right to collect payments? Wouldn’t this technically constitute a dispute which would be reported by the lender to the credit bureau?

    I don’t know FICO’s proprietary algorithm, but I suspect they are simply dropping disputed accounts from their score altogether. Sometimes that helps your score (if it is a delinquent or new account), sometimes it hurts (if it is a good pay, old account). If you have a very high FICO to begin with, any little thing can move it a bunch in absolute points, but still leave you with a pretty good score.

    Why do I care where the note is if I am current? What action would I possibly take with the information? The servicers are in turmoil enough without pointless inquiries. The result of this is spurious mischief, and consumes resources that should be directed by the servicers to loss mitigation work with delinquent borrowers. I’m usually don’t defend lenders, but look at the ‘Big Picture’.

    My solution to this mess is to simply put a large, standard penalty on any lender who forecloses on a house where they don’t hold the mortgage, or where the mortgage is current. Make it say, treble the value of the house. That easily pays off all harmed parties, assures any future home buyers that they won’t suffer from title problems, and applies a stiff penalty to sloppy foreclosures.


  5. Richard Smith says:

    Hmm, what happens to the look of BAC’s mortgage portfolio if everyone else joins in?

    Would be a nice way to blow up that sleazy little gambit.

  6. Sechel says:

    So do we view this as incompetance on the part of Banc America or a way to punish the borrower for being a “smart ass”

  7. louis says:

    How much do you need to save your failed buisness? Ok no problem. Here’s what we will do. We will give you tax payer money so you can survive, we will let you rewrite your debt no questions asked. When the people get feed up with their loans we will allow you to not rewrite any of their loans and when they get wise and start snopping around the shit pool you created we will let you ding their credit score.

    Jefferson is screaming from his grave. At the least he is saying “Holy Shit” look how much crap those people put up with.

  8. HP5976 says:

    I requested via registered mail to BAC who is the NOTE holder currently, they replied ” they are unaware of any law requiring them to provide such information”, they put a negative on my credit report and stated in a letter they were doing so. They have refused any and all attempts to get to the note holder. My mortgage is a jumbo taken out in 2007 with Countrywide so 96% chance it was securitized.

  9. Transor Z says:

    Barry, do you know whether SM ever received a writing from BAC providing the results of BAC’s own investigation performed in response to SM’s inquiry re: the location of the note?

  10. DeltaFreq says:

    The same thing happened to me with BAC. It didn’t appear to affect my credit score (so far) but this is how they treat good customers that have always been on time and never missed a payment. And NO this does not not constitute a dispute to ask the question “do you have the original note?”

    This is a sample of the letter I got from the failed bank’s robo-responder.

    In your letter, you expressed dissatisfaction with various aspects of the origination of the above-referenced loan You requested Bank of America to provide you with numerous copies of documents relating to the origination of the subject loan and a loan history.

    1. I didn’t express or imply dissatisfaction with the origination of the loan.
    2. I didn’t ask for “numerous” copies”
    3. All I ask for was a copy of the original note to see if they still had it.

  11. Petey Wheatstraw says:

    KentWillard Says:

    “By wanting to know if the servicer has the note, aren’t you questioning if the servicer has the right to collect payments?”

    Sure, but what’s the harm in that? Legal standing should be easily provable. Unless the ostensible lender or servicer doesn’t have the note, or the right to collect on it. The question then becomes: what right does the lender or servicer have to ding your credit score if they have no legitimate right to collect on a note they do not own or cannot prove they own?

    “Wouldn’t this technically constitute a dispute which would be reported by the lender to the credit bureau?”

    Who is the lender? Who is the servicer? If the lender/servicer has nothing that legally ties them to the note, then they cannot correctly be called the lender or servicer, can they? You wouldn’t dispute that?

    “Why do I care where the note is if I am current?”

    You could be paying on a fraudulent claim, with the actual entity holding the right to collect on the note waiting in the wings to collect the debt LEGITIMATELY owed to them. Just because someone said they sold you the Brooklyn Bridge, doesn’t mean you actually own the Brooklyn Bridge. Likewise, just because someone says you owe them money, doesn’t mean you do.

    “My solution to this mess is to simply put a large, standard penalty on any lender who forecloses on a house where they don’t hold the mortgage, or where the mortgage is current.”

    How would this possibly help the person illegally foreclosed upon? Do they get a do-over? You can’t foreclose on something if you have no right to do so (and if you can’t prove you own the note or the underlying right to collect on it, you have NO right, whatsoever). What if two parties are trying to foreclose on a property, and both claim, but cannot prove, that they are the note-owner or legitimate servicer? Would a fine on both clarify any legal claim to title?

    If the banks and loan service industry screwed themselves, legally speaking, by destroying their proof of ownership of debt and/or underlying collateral (in an effort to destroy evidence of past fraud, I might add), what does that have to do with the borrower?

  12. Geoffrey says:

    Sounds a bit passive aggressive by BAC. Credit agencies are limiting in that they do not provide a category for this type of inquiry to be made in a neutral way. The bank reports as a dispute and the credit agency sticks it in their standardized pigeonhole with standardized language. They then crunch a new credit score based on the categorization of an account dispute. Equifax would appear to be the most neutral but the credit agency scores and a FICO score would need to be compared to see if all are adjusting downward. That would be interesting to know.

  13. DeltaFreq says:

    “By wanting to know if the servicer has the note, aren’t you questioning if the servicer has the right to collect payments?”

    No. This is what I asked for.

    To whom it may concern:

    This is a qualified written request under Section 6 of the Real Estate Settlement Procedures Act (RESPA). I own the property at the address listed above, and your bank services my mortgage.

    Over the last several weeks there have been many stories documenting the problem that banks are foreclosing on homes without proof that they own the loan. I have learned that in many cases, banks like yours do not even know who owns the loans you service. Employees at several leading banks have admitted to rubber stamping tens of thousands of foreclosures every month, without even checking to make sure that the bank had a legal right to proceed with foreclosure. In some cases, banks allegedly falsified mortgage documents to cover up their mistakes. There have been reports of two banks trying to foreclose on the same home, banks foreclosing on homeowners who were current on their payments, and even of a bank foreclosing on a home where the homeowner had never taken out a mortgage to begin with. This is not merely a “technical problem”–it is the difference between having a warm bed at night and being out on the street.

    As a homeowner and a customer of your bank, I am horrified. I had always believed that it I played by the rules, I would be protected, but now I know that banks like yours think the rules don’t apply to them.

    To protect myself and my family, I need to know who owns my mortgage. Within sixty days, I would like to know the name, address, and phone number of the bank or investor that owns my mortgage. Furthermore, in light of the recent allegations of foreclosure fraud, I demand to see the original mortgage note proving ownership over my home loan. If you fail to produce a mortgage note proving that you have a right to collect my mortgage payments, I will be forced to consider all options available to me to ensure that my family and my home are protected.

    I ask that I receive my response in writing. I understand that under Section 6 of RESPA you are legally required to acknowledge my request within twenty business days and must try to resolve the issue within sixty days.

    Thank you for your attention to this matter.

  14. Transor Z says:

    Under FCRA, if you’re going to treat a consumer contact as a dispute that you report to the credit agencies, you’re supposed to report back to the consumer within a certain time frame on the results of your internal investigation of that “dispute.” Just sayin’.

  15. beaufou says:

    The same happened to me but the score came back up after a few days.(they had heard from my attorney by then)

  16. KentWillard says:

    You can contest every bill every month from every creditor. Most people don’t do this unless there is evidence of an error, because they have other things to do.

    As far as the invalid foreclosure penalty – the money would be for the injured parties. Identifying the wrongdoing and the injured party is usually easier than you make it out to be.

  17. rktbrkr says:

    Nobody should be surprised that the big banks would game the credit ratings systems, I mean just look at the work done by the credit raters, the robo-signing frauds etc. This is BACs “penalty shot” against those exercising their legal right to request this info. I’m sure BAC and others are hoping to deter others from asking hoping it goes viral in blogs like this.

    I imagine 12 or 18 mos down the road the banks will be forced by some states AG to stop doing this but it’s easy to see they’re in a bunker mentality. “Millions for defense not a penny for principal writedowns” thats their battle cry.

  18. wunsacon says:

    In contract law, isn’t there a (weak) requirement of “good faith and fair dealing”? Doesn’t hurting people’s credit scores — in retaliation for them demanding you to show you’re still the creditor they should pay — qualify as a violation of that?

  19. Some observations:

    1) It has always been material to a credit evaluation of a borrower whether or not a debt is disputed; also material is the number of credit inquiries being made about the borrower.

    2) “Demand for Presentment”–a common-law right of debtors to demand the creditor present evidence of the debt–was waived in every Fannie Mae/Freddie Mac conforming mortgage I ever closed. Meaning, no, you don’t necessarily have the right to know who owns your note. It’s my understanding that all states that still have some vestiges of the right remaining require it be waived in a conforming note and mortgage.

    3) The chain of title that matters to the borrower is thus: The originator tells the borrower where and to whom to send the payments initially. It is in the body of the note. From there, if the originator transfers the right to receive payments, the originator tells the borrower to send the payments to a different entity and location. In turn, if that transferee then sells the right to receive payments, that transferee tells the borrower the new lender and location, and so on. Any idiot that would start sending payments to a new entity without getting a proper notice to do so from their existing lender would probably also be willing to buy the Brooklyn Bridge. And well, it should be sold to them.

  20. Expat says:

    Let’s be realistic. Asking your bank to answer questions about its finances is tatamount to treason and puts you in the same league as Julien Assange. Next you’ll be demanding habeus corpus, free speech, and the right of free assembly…all well-known features of socialist regimes, you damn commie.

    The whole robo-signing, MERS-shuffling, MBS-stuffing Ponzi scheme is going to be buried deep in the cesspit of American crony capitalism. If we prosecute the Banksters, then the terrorists will have won. No one will go to jail. No one will pay a fine. No one will get to keep his house.

    ha ha ha, welcome to Amerika!
    ( I am flying to the States next week for the first time in a few years…is the DHS allowed to bar US citizens from returning home? )

  21. Mannwich says:

    Or maybe one for for GOP Senator Spencer Bacchus:

    In an interview with The Birmingham News, Bachus made it clear why he opposed stricter regulations for banks in the wake of a huge financial crisis largely caused by Wall Street excess and a lack of prudent regulation. In Bachus’ estimation, the government’s role is not to protect consumers and the wider economy through regulating financial activity, but to simply “serve the banks”:

    Bachus, in an interview Wednesday night, said he brings a “main street” perspective to the committee, as opposed to Wall Street. “In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks,” he said.

    According to the article, Bachus later tried to clarify that what he meant was “regulators should set the parameters in which banks operate but not micromanage them.”

    My personal insurance policy is to accumulate as many no-fee credit cards that I can and keep that powder dry if/when I need my own personal bailout money and my portion of the money that bailed out the banks. Keep the offers coming, banks.

  22. Mannwich says:

    @Kent: I would just add that these are far from “normal” times and would point out that we didn’t start the fire.

  23. wilde says:

    A very important note for anyone who has received an “Account in Dispute” tag on their credit report.

    If you attempt to refinance any home loan, even the loan not “in dispute,” you will be unable to complete the refinance until the service code tag indicating a dispute has been removed from your credit report. Even with the help of your loan broker and an attorney, this update may take 4 weeks. At least in the case of BAC, the part of the part of the organization that deals with ordinary credit reporting is not the same part that has the ability to turn off/on this “Account in Dispute” tag.

    My story, around 9 months ago I submitted a RESPA QWR to Bank of America. This account was in good standing with no late payment the entire loan history, but BAC had not handled the escrow account properly. Around 3 months ago I started a refinance on another property. All the initial credit reports, etc. went fine, but at the end of the process the underwriter noticed the “account in dispute” flag on the BAC property. At that point, it took almost 4 weeks back and forth between my broker and BAC before we could get a letter indicating the “dispute” had been resolved. Thankfully, this allowed the refinance to complete before rates started to move up. Though on the downside, that loan that was refinanced also ended up with BAC (who has got to be the worst servicer).

    Oh, and the original QWR about my escrow account that led to the “dispute.” Never responded to beyond a generic form letter about dissatisfaction, etc.

  24. Cletus says:

    FWIW, this happened to me as well. BoA sent me two letters. The first one informed me that BoA was under no legal obligation to provide the information I was asking for. The second letter stated that my dispute was reported to the credit agencies.

    Almost as disappointing as BoA’s letters is SEIU’s silence on this issue. They encouraged people to ask their bank: where’s the note? When I asked SEIU if BoA’s response to me, and the ding to my credit was legal…all I heard was crickets chirping.

    This what the average consumer gets for trying to do the right thing.

  25. ella says:

    Here is another rip off for you.

    The bank at my request checked my credit report for a pre-approved home loan. The preapps are good for about 90 days, so when my preapp was reissued my credit report was checked again. Later another bank that was funding my loan did yet another credit check. None of the information on my credit report had changed but my credit score had fallen since the first preapp credit check. Why, because there were too many credit checks and the only credit checks were from the bank.

    This should be investigated and legally remedied.

  26. Herb2 says:

    http://www.columbian.com/news/local/ hard copy doesn’t mention the effect on the credit scores but does report:

    A letter sent to hundreds of Bank of America’s mortgage borrowers in Clark County contained news no one wants to hear: Your home could be foreclosed for nonpayment of property taxes. The letter from a Bank of America affiliate was sent to about 1,100 Clark County homeowners who’d actually paid their taxes.
    Homeowners were quick to take action. Clerks at the Clark County…
    For a copy of the letter that 1,100 Clark County Bank of America borrowers received, visit http://www.columbian. com/documents.

  27. curbyourrisk says:

    I contacted BAC ( the third owner of my mortgage – actually held my Freddie Mac, so BAC is just a servicer) about re-financing my home It was our first home bought on Long Island in November 2006. DISASTER……home value is down 30% from that point, according to BAC. NO GO on the re-fi, but if I had missed a few payments I would probably qualify for a few government programs, otherwise, there is nothing they can or will do for me. I asked them to put that in writing and the guy laughed, “You know I can’t do that”. I then asked him if I could see the chain of transfer regarding my mortage from my original note holder to Freddie mac…..He then told me Ihad to speak to a manager. Once he got on thephone he highly recommended I not pursue that direction. That was the end of the phone call.

    Fcuk (I know I spelled it wrong) BAC.

  28. DeltaFreq says:

    Yeah Fcuk em all, early and as often as you can.

  29. Darkness says:

    >KentWillard Says:
    >As far as the invalid foreclosure penalty – the money would be for the injured parties. Identifying the wrongdoing >and the injured party is usually easier than you make it out to be.

    And the concept of clear title should just quietly be put in the handbasket for the trip to hell?

    >wunsacon Says:
    >In contract law, isn’t there a (weak) requirement of “good faith and fair dealing”? Doesn’t hurting people’s credit >scores — in retaliation for them demanding you to show you’re still the creditor they should pay — qualify as a >violation of that?

    RICO leaps to my mind, but I’m not a lawyer.

  30. DeDude says:

    I had a mortgage for about 7 years then I paid it off with my lower rate home equity line of credit (all from a small local credit union). That line has been zero balance for 5 years now and I am not even sure if I will get a new one when its time is out (nice to know its there for emergencies, but a stash of cash is even nicer). I have never purchased a car with anything but cash (only get cars that are old or small enough to fit the amount of cash I can spare). Not having to beg those bastards for anything is a real nice feeling. Fork them and their credit games. Stop feeding the beast, live small and debt free.

  31. Bernie X says:

    Here’s what’s going on:

    By demanding the lender prove they hold the note, you are, in fact disputing the legitimacy of the account and the lender is supposed to report to the credit bureaus that the account is in dispute.

    During the 30 days the account is in dispute, the account will neither count for nor against the consumer’s score, like it doesn’t exist.
    However, not having a mortgage account with perfect payment history will certainly lower your score, during the dispute period.

  32. beaufou says:

    if you had missed a few payments, they would gladly make you believe you will get a modification while still planning on foreclosing in the background. I have read dozens of stories about the so-called government programs, all but a scam to get subsidies while still taking properties away.
    Not having the note, and you have the right to see it, just provide the right “authority” as they call it, is negligence, breach of trust and in some cases fraud.

  33. [...] scoop from Barry Ritholtz, Where’s the Note? Leads BAC to Ding Credit Score. With your curiosity piqued, you decide to ask Bank of America where your actual mortgage note is, [...]

  34. Molesworth says:

    I got my jumbo through my bank, they sold to Countrywide by, I pay over what is asked, recently tried the Where My Note site:
    Got one form letter fromBofA with fees for forms.
    Then an email survey. I blasted them.
    Then a letter telling me that they service the mortgage and that Bank of NY Mellon holds the note–including addresses and phone numbers.
    I get alerts for free when there are changes to my credit report bec past employer f88ked and lost ID of 1 gazil employs.
    Nothing so far, but haven’t checked details of my credit report though. Thanks for the heads up BR.

  35. james85306 says:

    well I’m about to PAY the mortgage off by using a large amount of cash…so I think the inquiry is valid by the people who want to KNOW that by paying the note off that they will get CLEAR TITLE to their property…why is that “misusing bank resources”, or “being a smart ass”… I think in this environment that is simply asking the better question WHO HAS THE NOTE and therefore AM I GOING TO GET CLEAR TITLE? and if I can’t get clear title who should be receiving the funds?? As for the credit ding for simply asking you are simply out of luck FICO can do anything they damned well please, read the contracts you sign.

  36. [...] Where’s the Note? Leads BAC to Ding Credit Score Barry Ritholtz. In case you managed to miss this… [...]

  37. [...] Yesterday, I noted that at least one Homeowner had made a “wheresthenote.com” Mortgage Note request, only to see Bank of America report the request as a dispute to the credit agencies, knocking 40 points off his FICO score. If these facts check out, that is a violation of the Fair Credit reporting act, and possibly other state and local laws. [...]

  38. [...] the Note? Leads BAC to Ding Credit Score (Big Picture) Simply requesting information about your mortgage is evidently enough to make you a bigger credit [...]

  39. neroden says:

    “2) “Demand for Presentment”–a common-law right of debtors to demand the creditor present evidence of the debt”

    Curmudgeon, you are factually wrong about what demand for presentment means. I must assume you are wrong about everything else you wrote too.

    Demand for presentment means that the creditor must present a bill every month in order for the debtor to be forced to pay.

    It has nothing to do with the requirement that the creditor demonstrate that he is, in fact, the creditor; this is an unwaivable right under common law.

  40. [...] added negative reports to the credit files of borrowers who ask for their notes. Barry Ritholtz has an example of this at his [...]

  41. [...] Nevada homeowner told [4] financial blogger Barry Ritholz that after he asked Bank of America about who owned his [...]