Henry Losch v. Nationstar Mortgage, LLC

A jury should decide whether a credit-reporting agency was negligent by not examining court records to determine whether a debt had been discharged.

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Case Type:
Case Status:
20-10695 (11th Circuit, Apr 28,2021) Published
The Eleventh Circuit held that a jury should decide whether Losch's claims that Experian negligently, but not willfully, violated the Fair Credit Reporting Act by failing to take reasonable measures to investigate the accuracy of its report after former debtor notified the agency of an inaccuracy in his report relating to a mortgage debt that was discharged in bankruptcy. The Court concluded that Losch had standing, as the false credit reporting was the injury, not any impact on Losch's credit score, and that Losch's allegations concerning emotional damage were sufficient to raise standing.
Procedural context:
Appeal from United States District Court for the Middle District of Florida, affirmed in part, reversed in part, and remanded.
In 2017, Henry Losch sought relief under chapter 7 of the Bankruptcy Code. He initially attempted to retain his home and reaffirmed the mortgage with CitiMortgage. Subsequent to the debtor's reaffirmation of the mortgage, the property was sold by the chapter 7 trustee. Thereafter, CitiMortgage transferred the servicing of the mortgage to Nationstar, which began sending collection notices to Losch. Losch then sought to rescind his reaffirmation of the mortgage, and the bankruptcy court granted his motion. Notwithstanding the bankruptcy court-approved rescission of the reaffirmation agreement, Losch's Experian credit report continued to reflect the mortgage debt and a past-due balance of more than $10,000.00. In June 2018, Losch contacted Experian to inform it of the inaccuracy concerning the mortgage debt and requested that Experian correct the information on his credit report. In response, Experian contacted Nationstar to verify the debt, and Nationstar indicted that the loan balance was correct and added additional amounts to the past-due balance. Experian took no other steps to verify the debt and did not correct Losch's credit report until February 2019, after Losch filed suit against Nationstar and Experian, seeking damages for Experian's alleged negligent noncompliance with the Fair Credit Reporting Act, in addition to punitive damages, statutory damages, and attorney fees. Losch settled with Nationstar prior to the district court granting summary judgment in favor of Experian.
Jordan, Newsome, and Tjoflat, Circuit Judges

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