charge-off and settled for less

BTW, prior to the settlement of the above, I was never late nor missed any payments on the second mortgage.

Would appreciate any insight!

Ronnie

Hi macman,

If the lender has settled the debt for a less amount that was owed, then he will report that to the collection agency. He shouldn't report it as charged off account. However, as a portion of the debt was forgiven, you'll receive the 1099c form from the lender which you need to attach with your tax documents.

Thanks

Thanks for the reply James! I did receive a 1099-C and filed it with my taxes. However, they are still reporting it as 'charged off as bad debt". If they agreed to the short sale and agreed to cancel the remainder of the debt, are you saying they should NOT report to the bureaus as a charge-off?

Thanks again?

Ronnie

Hi macman!

Welcome to forums!

If the lender is selling off the property in a short sale auction, then you can negotiate with your lender and ask him to remove the charge off status from your credit report.

Feel free to ask if you've further queries.

Sussane

I actually found a buyer and the first and second agreed to the short sale. The primary mortgage (for which I missed 5 payments) reported to the bureaus "paid, settled for less than amount owed". The second mortgage (never delinquent) agreed to the short pay-off in writing so the short sale could proceed. They wrote-off the remainder, but are reporting to the bureaus as a charge-off. Can they do that since they agreed to the settlement and I never was delinquent? Or should they report the same as the primary mortgage "paid, settled for less than amount owed"?

I've read that a charge-off listed on your reports is as bad as a foreclosure.

Thanks to all!

Ronnie

Hi macman,

There was no written agreement between you and the second lender. Thus, he can refer to it as an charged off account. You should even check out with your second lender whether or not he has sold off your account to a collection agency.

Thanks

"They 'wrote-off' the remainder of your debt; this means that they charged-off the debt. The terms are interchangeable, and the creditor is, therefore, properly reporting the data to the credit agencies. It's within the realm of possibility that you might be able to negotiate a change in how they report, but it's not a given that they'll do so.

You may be forced to live with their methods - they are accurate, after all.