Legal Question in Credit and Debt Law in Pennsylvania

No, you can't just sue. This was a screw up, I admit. Ocwen is the most horrible company to deal with, next to Green Tree. But you cannot just sue until you have taken steps to rectify this.

First, how is the debt being reported on your credit report? Is it being reported wrong by both Litton and Ocwen or just one of them?

You send a certified letter to the entity (either Litton, Ocwen or both). In the letter you recite that the mortgage debt was sold in 2011 and that you timely made payments (send copies of cancelled checks and the letter sent to you by the mortgage lenders advising of the transfer) and demand that they correct the information now and update the information to the 3 major credit bureaus.

As far as this hurting your credit, it is partly your fault. Had you been checking your credit reports regularly, you would have found this. Even if you had only checked your credit before you needed to apply for existing loans, it would have helped because you get any information corrected before you obtained added credit. And had you checked you could have explained the circumstances too any new lenders or had a dispute listed on your credit report. So if you were charged a higher interest rate because you failed to do any of these things and just accepted the higher credit rate, then this is what I call a "stupid tax." Its a premium that you pay for being less than vigilant.

This does not excuse Litton/Ocwen's bad job. Credit reports are important for all kinds of things but the credit bureaus make money by having errors in your report. There is no money to be made by having things be accurate. Since this is the game the lenders and credit bureaus play (they are working together) then you have to be better at the game than they by staying on top of things and not letting them get away with it. You cannot rely on someone else to watch out for you. You have to rely on you.

The process to be able to sue is to first dispute with credit bureaus by sending a certified letter and then, if that does not work, then sending a certified letter to the information furnishers, Litton & Ocwen (or even better via UPS/Fed Ex but you will need a physical address and you will have to track to get proof of delivery). I suggest short-circuiting this and going right for the lenders because you want to get this fixed faster. The Fair Credit Reporting Act only gives very small damages ($1000) unless you have actual damages in a greater sum. For most people, its hard to prove.

The letter to Litton/Ocwen has to be sent to someone high enough up the corporate food-chain to care and who has the power to do something about it - has to be a VP of Customer Care or loans for Litton/Ocwen in North America or something like that. You will have to spend time researching Litton/Ocwen to find the best person. Plan on devoting at least an hour if not more to this. You will have to send the letter to Litton/Ocwen's corporate address too.

You also need to contact any existing lenders and tell them why the information is inaccurate and see if they will re-adjust your loan interest rates.

If this seems like too much work, then hire an attorney in PA who specializes in FCRA/FDCPA violations. There are several at Law Guru (Lawrence Rubin comes to mind - he is a bulldog for this stuff but I am sure there are others). They can get it straightened out for you but its going to take time. And if they cannot get it resolved then they will get your case positioned for a lawsuit. Lawyers love the FCRA because, if you are successful, the attorneys can recover their attorney fees.