Theoretically, lets say a bank reported foreclosed loans as paid off to the CRA. So, delinquent customers have approximately 18 months of delinquent payments and then a "pay off."

While there is a regulatory obligation to make sure this doesn't happen in the first place (Duties of Furnishers of Information), but is there a regulatory obligation to fix this error after it's detected?

I know it makes sense to fix it, but it's not 100% clear to me that we MUST fix it. And my management is lazy and looks for excuses everywhere.

Has the foreclosed property been sold?

Is this a system glitch?

You are required to accurately report the customer's credit history (however negative or positive it may be).

There is a regulatory obligation to ensure the accuracy and integrity of data that is furnished to Consumer Reporting Agencies, regardless of whether or not that information favors the customer.