Foreclosures have a devastating impact on your credit report. The good news is that these are easier to get removed than other derogatory items. Lenders have made countless mistakes with foreclosures in the past, forcing some financial institutions to have to offer restitution to consumers when they mismanaged their foreclosures.
Among these errors were rubber stamping documents and not pursuing the proper procedure required by foreclosure law. This is why it is easier to get such records completely removed from your credit report today.
For one thing, the lender may not even possess the necessary records. Many original lenders went bankrupt during the Global Financial Crisis and Great Recession of 2007 to 2009. Countless original documents necessary to verify the mortgage disappeared in the chaos. Many such mortgages and foreclosure rights have been sold on to new banks, creating a paperwork nightmare for the banks.
Such sales had the unintended side effect of causing banks to fail in their task of accurate record keeping. If the bank that was listed on your credit report has gone out of business, the new bank will likely not be able to verify the foreclosure.
All information like this in your credit file that they can not verify with the necessary documentation has to be removed by law.
Armed with this background knowledge, you should write to your foreclosing lender directly. If the credit bureaus will not remove the foreclosure, go straight to the source of the derogatory information.
Request that they take off the entry because of mistakes. Allow them a 30 day deadline to do so before you take further action.
In many cases, the foreclosing bank will not be able to produce the original documentation and records to verify your foreclosure. They might also decide it is not worth the time and effort to track them down. In either scenario, they will likely simply choose to remove your foreclosure remark from your credit report.
This is worth the considerable time that it may take on your part to make the phone calls, write the letters, and follow up on, since it requires seven years for a foreclosure to drop off of your credit report otherwise.