serzak777 Posted November 30, 2004 Report Share Posted November 30, 2004 I once saw a posting for a situation I am now in. I am refinancing my home and they are forcing me to pay off my chargeoff accounts. I have a lawyer negotiating my payoffs. The mortgage company is going to pay the fully owed amount to my creditors. What procedure do I need to follow to have the bank send out different checks with the lower amounts that my lawyer negotiates?? Link to comment Share on other sites More sharing options...
breathing_easier Posted December 1, 2004 Report Share Posted December 1, 2004 My situation was very similar to yours, only I was refinancing just so that I could pay off my charged off and collection accounts. I made the big MISTAKE of letting my mortgage broker (actually, his assistant) settle my accounts for me. Your lawyer may be more savvy about credit, the FDCPA and FCRA than my broker was. At least I hope so as my broker made a colossal mess of things. I'm still cleaning up two years later. Hopefully you can avoid some of the mistakes I made.The first thing to do is take a deep breath and take a good look at your situation. If your head is firmly buried in the sand like mine was, pull it out and take charge. Are you in an extreme hurry to refinance? If there is some compelling reason why you must refinance now, then so be it. However, you really should take a step back and take care of some business before you refinance. Have any of your charged off accounts been sold to a junk debt buyer or are they being handled by a collection agency? If so, and if you have the time, you need to send debt validation letters to each. If they are able to validate, then you probably will want to negotiate a pay-for-delete (of the negative tradeline) settlement with them should they have one on your account. Don't settle for anything less than a tradeline that says either "Pays as Agreed" or a deletion. If they aren't able to validate then you need to dispute the tradeline every which way. Were you referred to a particular broker by a CA? If so, be aware that in these situations the broker will sometimes arrange for this CA to be paid in full no matter the amount of the account. I can't say it happens in all situations, but it happened in mine. It's a little "payola" from the broker to the CA using your money. Start out low when negotiating a settlement with the CA. If it's a junk debt buyer, they paid pennies on the dollar for your account. If you're dealing with an OC, that's another story, but why line the CA's pockets? You decide what the top dollar for which you will settle, don't let your lawyer decide. In the long run, by cleaning up your credit reports before you refinance, you will get much better rates and will save yourself many $$$. I realize my answer doesn't fit your question exactly, but I'm determined to try to keep others from making the mistakes I made. Good luck from someone who has been there. Link to comment Share on other sites More sharing options...
firstsource Posted December 1, 2004 Report Share Posted December 1, 2004 Great advice. Unless you HAVE to get these bills paid off, for other reasons than the mortgage company says so, then realize that you are in a good situation.If you don't HAVE to refinance now, then wait until you have a letter from each of the creditors, stating the amount they will accept. Your mortgage company will accept those figures. Since you are having an attny work on your behalf, have the letters faxed to his office, and let him forward them to the lender. With one lender I had to have the creditors fax me the documents directly, as the lender didn't want the letters to pass from the creditor to my client then to me. Not a trusting lot sometimes. The "interesting thing" that may happen is if some of the accounts that the lender wants paid off, have sold the debt off. You will need to have documents linking the creditors. Glad you came here to ask questions, and not just buckle under.Charles Link to comment Share on other sites More sharing options...
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