Posted on: 22nd Oct, 2010 02:49 pm
I'm having trouble with a collection account on my credit report making it difficult to get a mortgage. This debt is nearly seven years old at this point, and I'm not sure whether it is even a valid debt. The amount shown is about $7k. Is my lender being unreasonable or do I need to wait until this either ages off my credit report or I can successfully dispute or settle it (if valid)?
What confuses me is that I often see advice provided to people who are underwater to take "strategic foreclosure" advising that they can then rebuild their credit in 3-5 years. While that is not my situation, it raises a question about my situation. Presumably these people never pay the balance due after foreclosure (that's the whole point of strategic foreclosure, right?) and it then turns up on their credit reports as a collection account.
What are these people then doing to be able to qualify for a new mortgage in 3-5 years whereas I'm still struggling with a single collection account almost 7 years old? Presumably they AREN'T actually paying the bill because, again, that would defeat the purpose of strategic foreclosure.
What confuses me is that I often see advice provided to people who are underwater to take "strategic foreclosure" advising that they can then rebuild their credit in 3-5 years. While that is not my situation, it raises a question about my situation. Presumably these people never pay the balance due after foreclosure (that's the whole point of strategic foreclosure, right?) and it then turns up on their credit reports as a collection account.
What are these people then doing to be able to qualify for a new mortgage in 3-5 years whereas I'm still struggling with a single collection account almost 7 years old? Presumably they AREN'T actually paying the bill because, again, that would defeat the purpose of strategic foreclosure.
Hi dash,
If you're not sure whether or not the debt is valid, you should ask the creditor to validate the debt before you start paying it. Most people cannot pay off the balance amount after their property is foreclosed. As the lender has the rights to collect the deficient amount, he sells off the account to a collection agency who in turn harass the borrowers for payments.
Thanks
If you're not sure whether or not the debt is valid, you should ask the creditor to validate the debt before you start paying it. Most people cannot pay off the balance amount after their property is foreclosed. As the lender has the rights to collect the deficient amount, he sells off the account to a collection agency who in turn harass the borrowers for payments.
Thanks
I have contacted the creditor and the creditor's collection agency, both by certified mail, return receipt requested, asking them to validate the debt, and have not received a reply. It has been at least 60 days.
Because this debt is, according to my credit report, due to drop off the report in May 2011, I am a bit reluctant to pursue this too aggressively, given the risk that the debt might be "re-aged". I'd rather wait six months than seven years.
I'm still unclear about strategic foreclosure, though. You refer to people who "cannot" pay the balance. But that's not strategic foreclosure, as I understand it. Strategic foreclosure refers to people who *can* pay but *choose*not*to* because they feel they can avoid paying a loan which is worth more than the house. I'm wondering why strategic foreclosure would ever be a wise choice given that a single, old, collection seems to be causing so much trouble.
Because this debt is, according to my credit report, due to drop off the report in May 2011, I am a bit reluctant to pursue this too aggressively, given the risk that the debt might be "re-aged". I'd rather wait six months than seven years.
I'm still unclear about strategic foreclosure, though. You refer to people who "cannot" pay the balance. But that's not strategic foreclosure, as I understand it. Strategic foreclosure refers to people who *can* pay but *choose*not*to* because they feel they can avoid paying a loan which is worth more than the house. I'm wondering why strategic foreclosure would ever be a wise choice given that a single, old, collection seems to be causing so much trouble.