A dispute your borrower mails straight to the bank is still a disputed tradeline on your tri-merge. The bureau never saw the letter. The furnisher has to tell it anyway.
Section 1681s-2(a)(3) bars a furnisher from reporting an account a consumer has disputed to it without noting the dispute. The remark lands with the next monthly update, usually inside thirty days, and DU reads it the way it reads any disputed tradeline.
The post going around tells borrowers to skip the bureaus and demand the original signed contract from the bank, on a promise that the bank faces civil liability if it cannot find one, and some of your borrowers have already mailed it. Calvin has the rule in full. The short version for you: the statute requires no contract, and a direct dispute carries no private remedy. What it does produce is a form letter from the bank and a flag on an account you were about to underwrite.
I read two hundred files a week for eleven years. I never once saw a bank mail a borrower the original because a letter used the word "strict."
Two questions.
Ask the borrower which accounts got a letter, and on what date.
Ask what proves each one wrong.
Where there is a document, have them send the bureau dispute with it enclosed this week. That is the dispute with a remedy behind it.
Where there is no document, have them withdraw the direct dispute in writing, to the same address, and keep a copy for your file.
The borrower decides which letters go. Your job is the calendar.
Pull again before you lock. If the remark shows on more than one account, the referral takes twelve minutes.
Sources
- Fair Credit Reporting Act, 15 U.S.C. § 1681s-2(a)(3) — information a consumer has disputed may not be furnished without notice of the dispute
- Fannie Mae Selling Guide B3-5.3-09 — DU credit report analysis (disputed tradelines)
- Calvin Noman — The direct dispute is real. The remedy runs through the bureau.
Every statutory citation in this article was checked against the source listed before publication. Nothing here is legal advice; if your situation has legal consequences, talk to a licensed attorney in your state.