Same loan, two co-borrowers — but the credit bureaus gave very different answers
Mr. Cooper and two major credit bureaus are being sued for allegedly botching post-bankruptcy mortgage credit reporting — raising fresh compliance questions for servicers.
The lawsuit, filed February 6 in the Northern District of Texas, names Nationstar Mortgage LLC (doing business as Mr. Cooper), Equifax Information Services LLC, and Trans Union LLC. Fred and Michelle Brunton allege the three companies violated the Fair Credit Reporting Act by failing to update their mortgage tradeline after they completed a Chapter 13 bankruptcy.
The Bruntons took out a mortgage in June 2017 and filed for Chapter 13 protection in October 2019. According to the lawsuit, they made timely monthly payments on the mortgage throughout the bankruptcy and received their discharge on February 14, 2025. Their home loan was excepted from the discharge — the standard treatment under federal bankruptcy law for residential mortgages.
When the couple reviewed their credit reports in August 2025, they found that neither Equifax nor Trans Union had updated the Nationstar tradeline to reflect the completed discharge. Both bureaus allegedly continued to show the loan as open with an amount owed and kept bankruptcy-related suppression codes and remarks on the account — months after the discharge.
The issue at the center of the case is Metro 2, the industry-standard format that governs how mortgage servicers and credit bureaus report consumer credit data. Under Metro 2 guidelines, when a borrower enters Chapter 13, the Consumer Information Indicator on their tradeline is set to "D." Once the borrower completes the bankruptcy, the furnisher is expected to submit a code of "Q," which signals the bureaus to remove all bankruptcy references and suppression codes so that the borrower's ongoing payments can be properly reflected. According to the suit, that transition never happened.
The Bruntons say they raised the errors directly with both bureaus in September 2025. Neither allegedly corrected the reporting. Equifax, the lawsuit claims, verified the existing information without conducting what the Bruntons describe as a reasonable investigation. Trans Union's response introduced an additional wrinkle: the suit alleges that Trans Union continued reporting Michelle Brunton's tradeline with the errors intact while outright deleting Fred Brunton's tradeline — without explanation. Two co-borrowers on the same mortgage, two entirely different outcomes from the same bureau.
Nationstar, as the furnisher of the underlying data, is also in the crosshairs. The lawsuit alleges the servicer failed to investigate the dispute properly after being notified, failed to correct its own records, and failed to prevent the continued re-reporting of inaccurate information to the bureaus.
The Bruntons are seeking damages and injunctive relief that would require all three defendants to cooperate in correcting the credit reports. A jury trial has been requested. The case remains in its early stages, with no determination on the merits.
The case is Brunton et al v. Equifax Information Services LLC et al, Civil Action No. 3:26-cv-326, Northern District of Texas.
