Wisconsin district court holds that is not a FCRA violation to report TPP payments as “partial payments” after a failed loan modification plan

A Wisconsin district court in Green v. Cenlar FSB, No. 19-cv-1555 (April 19, 2021) granted summary judgment to a loan servicing company for alleged violations of the Fair Credit Reporting Act (“FCRA”), on the grounds that the servicer conducted a reasonable investigation of a mortgagor’s credit disputes which challenged the servicer’s reporting of her partial mortgage payments as late payments.

The credit reporting issue arose from a failed loan modification. The servicer offered the mortgagor a loan modification requiring her to, among other things, make Trial Payment Plan (“TPP”) payments which were less than her regular monthly mortgage payment. But making the TPP payments did not automatically qualify the mortgagor for a permanent loan modification. One requirement was that the mortgaged property be free of any clouds on title.

The title report showed a judgment lien and a UCC-1 lien on the property. The mortgagor had caused the judgment lien to be removed but did not have the UCC lien released. It remained on title such that when the mortgagor completed her TPP payments she was denied a permanent loan modification due to the cloud on title caused by the lien. The denial also meant that TPP payments were only partial payments putting the mortgagor in default.

The servicer then reported to the major credit bureaus that the mortgagor was delinquent for failure to make timely payments on the mortgage. The mortgagor disputed the servicer’s reporting that her mortgage payments were late and asked it to investigate and correct the credit reporting. The servicer investigated and stood by its report.

The mortgagor sued under FCRA alleging that the servicer failed to conduct a reasonable investigation of her credit disputes challenging the late payment notations and failed to mark the account as disputed. The district court granted summary judgment to the servicer finding that it had accurately reported the account delinquent because the mortgagor’s partial payments were not sufficient to bring her mortgage current. And because the reporting was accurate failing to mark the account as disputed was not misleading and did not violate FCRA.


  • James Noonan

    Jim is a founding partner of Noonan & Lieberman. Jim has more than 25 years of experience in civil litigation on behalf of creditors, servicers, business and real estate owners.

Download Related Document