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Collection agency just called and will be sending DV but....


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I am so afraid that my somewhat "fair" credit score of 636, will go down the drain. Within the coming weeks, I am going to be obtaining a mortgage loan but was told by the lender I would have to pay it before they pull my CR. Here is the account info below:

CA: Metro Area

Date Assigned: March 2001

Date Reported: October 2001

Amount: $2109

Bal: $2109

Date Paid out: Not on Record

Date Closed: Not on Record

From reading this forum, I believe according to the UCC (four years), the SOL has passed? I have tried several times to look up this info for the state of oregon under services and goods but was not able to find the exact DOL date. In addition to the above, I disputed this account with TU earlier this month as "not mine" because of the UCC being passed. Today, I got a call from the atty's office/collector stating she received my dispute today and she would send me an itemization of all the charges accrued. She also said the services are really old but that she would get something in the mail to me by next week. BIG mistake by answering my phone this morning! Scared and realizing who the heck I was talking to, I ended the call without mentioning for them to also provide me that the SOL has not passed. (Because they collection agency is in ORegon, where I live, I know they are licensed and bonded. I checked the business registry already.) Would like to know what I should do next? Should I call her back and ask her to also provide me with proof the SOL has not passed along with providing me the itemization or should I send a letter to them?

I am scared because I think my dream of getting a decent rate for my mortgage is gone, afraid because the collection agency might garnish my wages, and confused because I promised myself I would not allow this mess to happen to me again.


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Thanks for the replies, I really appreciate it.

justaguy, thanks for the link. However, I did not think the medical collections would fall under the types of contracts that are listed on the SOL page. Am I wrong but are medical collections the same as credit card collections?

lyle7289, Honestly, if I had the $2109 to PFD, believe me I would do it in a heart beat. But, I am really struggling to stay afloat of all the living expenses I have. One thing I have not done yet is obtain the date the accounts were assigned to them. Should I call the CA back and inform the representative to also provide the date the account was assigned to them in addition to proving to me the SOL is not yet up? Or should, I send them a DV letter? I have not sent a DV request to the agency, I only disputed the account with TU.

What should I do next?


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Is it just TU reporting this account? Wait until the entire investigation is completed~most likely it'll come back "verified" since someone did contact you, BUT I will suggest you read up on this thread about credit repair and how to do it step-by-step


Next time, do not talk to CAs on the phone.. you don't need the stress! They'll try to intimidate you into paying.. I wouldn't be surprised if they try to come off as attorneys on the phone.

DO send your DV letter. Read up on the sample letters here.

Make sure that what they send you comes from the original creditor-follow up on the debt validation page here for great info that can help you!


Unfortunately, all this takes time... I don't know much about mortgage but if this is the only item on your CR then perhaps you may want to post a question on the "mortgage" forum and see if you're able to get at least a loan with a collection on your CR~they can advise you more.

You may also want to read on the "collections" post to get information on these CAs and documentation they normally send...

If you do decide to settle read up on debt settlement. Since it's soo old you should be able to negotiate something good and demand deletion!

Good Luck!

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Thanks NJGirl for you response also. Whewww, I am starting to feel better already. And, you are correct, the CA did come of like attorney's; go figure. However, I am going to give them the old "1-2" and get this account resolved. I am going to DV them, and if they validate the account, I will proceed to negotiate for settling the account by PFD. Now that I think about it, I had insurance the time service was rendered. So, eventhough the account is old, I will by myself some time by having them getting the account billed to the insurance carrier I had at that time. Also, should I provide the CA a HIPPA compliant release so they can obtain records from the dental office?

Nevertheless, I am going to definetly send my DV today.

Thanks everyone for coming to my call for help. You are all awesome.

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I sent my first DV on May 26, 2006. I just received a ledger today from the CA regarding the dental treatment rendered. The letter they sent me states; "Enclosed is the copy of verification of you debt as you requested. We will update your file to indicate the verification has been provided.

Amount: $2109.26

Interest: $1085.43 :x

Total: $3194.69

My questions:

1. Does the SOL begin from the first date of service which would be March 24, 1998?

2. Does the SOL begin from the date of the first past due (delinquency)notice which would be March 23, 2000?

3. Or does the SOL begin from the date of the last payment on my account which would be Sept. 11, 2000?

I have tried looking on the website to find out the SOL for medical debt for the state of Oregon but have not been very successful. I have heard people mention the UCC regarding medical SOL being 4 years but have not been able to find any literature pertaining to this. Because of what was sent to me today from the CA, I am sure the debt is mine. However, if it is obsolete, I do not want to go through the trouble of paying this account; because it could take me at least a year and this would also postpone my dream of homeownership. At times, I really think I should have let the sleeping giant sleep and let the account fall off my credit report March 2007 but because my mortgage lender told me I would have to pay it prior to getting a loan, I decided to tackle the account. After two years of clean up (with the help of all of you), this is the only negative entry on my TU profile. So, that is why I am trying to get this account resolved.

Suggestions or comments anyone?

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This is MEDICAL?

Why is a mortgage lender giving you grief over medical? They usually disregard them completely. Is this the LENDER telling you that you must pay BEFORE obtaining a mortgage loan (sure fire way to drop your score) or is it a BROKER? (who may not understand the implication)

At a mid-score of 636, you stand a chance of obtaining a decent loan at 100% LTV. If your score drops under 580 (totally possible with a recently updated derog) you may be out of luck!

IF you MUST pay this, arrange to pay it at closing. Get your loan at your present score, then you have minimum of 2-3 years to let it age, or get it removed. You can then re-fi for better terms... Why isn't your broker leading you in the right direction????

*feels overly contrite for professional embarassment*

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I totally agree with Ahntara. I got my mortgage last year with a mid-score of 621 and charge offs totaling over $11,000! And you can't get one? C'mon, something is wrong. Find a new mortgage broker (I recommend you leave a post for Firstsource in the mortgage section). This should not stop you from getting a mortgage.

To answer your question though, it looks as it the 7 year reporting date started 3/2000, which means this is close to falling off. I wouldn't even think about paying this, it won't help you anyway. It will just show up as a paid collection. I would let it fall off my reports.


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Edited by kevin3344
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Hope everything works out for you. And if anything, do ask the CA to give you an itimized accounting breakdown on how they came up with those interest charges!

But, do follow the advice of everyone here and if its around the corner to dropping off then don't worry about it!

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I'm sorry to say, but the UCC has zippo to do with the mortgage process. Any outstanding unpaid delinquencies must be paid or the lender will not let you close...and they don't care about the Statute of Limitations.

To be blunt, the SoL is a defense to a lawsuit. The SoL being past does NOT mean you cannot be sued. You CAN be sued. The SoL is just a reason you can give to the court to have the case dismissed in your favor. It is a technicality really that says anyone who waits too long to sue looses the privlidge because the evidence is too old or unavailable for the consumer to offer up a legitimate defense.

As I told someone else recently, dealing with outstanding delinquencies does not necessarily mean paying in full. It just means getting the item current. You also do not have to have it reporting current on your credit report as long as you have something in writing stating it is paid current.

There is also one other method for dealing with this that I have not touched on with others yet. You can have the debt dealt with at closing by the title company as long as you have sufficient funds in escrow (usually established to cover closing costs). If you are due an refund of escrow, you can have the Title company simply cut a check and mail it directly and that will satisfy the lender as a closing condition. The drawback is that the amount would have to be paid in full doing it this way as the title company is not going to do any negotiating for lesser payments.

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As I told someone else recently, dealing with outstanding delinquencies does not necessarily mean paying in full. It just means getting the item current. You also do not have to have it reporting current on your credit report as long as you have something in writing stating it is paid current.

Methuss, question:

The statement (bolded above), I'm not quite understanding. "Paid current" can show when a lesser pay-off is negotiated (as you've explained), but this is for accounts held by the OC only, correct? With CA's , this means little... it's the same as "paid chargeoff" without the "settlement / paid lesser amount" verbiage.

Please let me know if my understanding is correct.


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I'll give you an example from my own personal experience.

I went for a mortgage 3 years ago and had an IDTheft item pop on my report 45 days before close. No time to dispute. I had all kinds of documentation to show it was not mine including letters from my attorney to the creditor and the bureaus. My lender said no problem at first but 7 days before close told me I had to pay it.

Instead of paying the full $6400 the creditor was claiming I only had to pay the $340 in past due amounts to bring the account current. That let me close the home deal. I just had to make sure I wrote "Paid under protest" on the check so I would not get trapped into admitting the debt was mine and being stuck with it.

Needless to say, in my case I got the $340 back (and some) and did not have to pay the rest once my lawyer had the time to stomp on the creditor proper.

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Thanks to have replied thus far. Your opinions and advice is greatly appreciated.

Ahntara, this actually is a dental account but I was told that dental and medical are both classified in the same category. Sadly enough, it was actually a bank lender (not a broker) telling me this open collection account must be paid prior to receiving the loan. His theory behind this, the bank does not want to risk losing money by a consumer foreclosing on a home because they are unable to satisfy an outstanding debt; because most firstime homebuyers do not have reserves saved to pay for unforseen accounts. Maybe I am not saying this correctly, so let me know if I need to expound some more. And I will be contacting another lender.

kevin3344, I believe I was definetly getting the shaft from that lender. Now that I think about it, it appears he has been discouraging me from even obtaining a loan. And, I will follow your advice and post a message for Firstsource in the mortgage section.

Methuss, by getting the item current, do you mean establishing a payment plan with the CA and begin making monthly payments would this constitute paid and current status? I am also assuming this method would work for creditors and CA's alike? If so, this would be a probable solution.

You know, I just do not want to get sued or garnished for this account. I am on edge because should I get sued, I do not have $3K sitting around to pay this debt. I am sure, where there is a will there is a way. I'll keep you all posted on what happens next with the CA.

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Thx for the clarification. Your banker is correct...dental & medical are lumped together for the purposes of listing a CA on your CR. He is also correct in insisting that you pay whatever they want you to pay to get a loan with their bank. This is not illegal, immoral, unusual or in any way wrong. When you borrow money, the lender has the right to set the terms. If you don't like the terms, go borrow somewhere else.

Which is the point of using a mortgage broker. You can definitely get taken. There are a lot of unscrupulous ones out there, even more uneducated ones. But brokers have thousands of lenders as a resource to get you funded. It would be unusual for one of them to force you to pay a CA prior to funding (most know that would drop your score and might cause you to lose the loan). They make money only after your loan closes, thus having a vested interest in closing your loan.

Just be proactive, careful, read everything and you should be fine. If obtaining a mortgage loan is your goal, keep going until you accomplish that. Other things will fall into place accordingly. Good luck!

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I don't usually do this, but I will share a response sent to another person as it applies to this discussion:

I will rebut that SOME lenders may allow it with proper documentation -- mostly subprime and shifty lenders at higher rates. You cannot get a conforming loan with unpaid delinquencies. It is against Freddie/Fannie guidelines. Even amongst non-conforming lenders the vast majority will not allow it.

With 25 years as a compliance officer for washington mutual and an additional 10 on top of that as an underwriting manager, I think my source (my own mother) is a reliable reference on this.

And by the way. FHA/VA won't allow it either. The Federal guidelines require all unpaid delinquencies for FHA and VA to be paid current. Anyone who hides or attempts to conceal unpaid delinquencies on the FHA/VA guideline checklist can be arrested for a felony.

Any broker who has handled a loan to the contrary is committing fraud. And staff here will never knowlingly encourage anyone to be involved in fraudulent activity. I also personally will not encourage people to use sub-prime lenders with shady business practices as it never ends well. Foreclosures are on the rise across the country because of brokers and lenders who bend (or break) the qualification rules.

Mortgages are one thing you don't screw with in credit because the 7 year limit does not apply if the amount financed is over $150k -- defaults on any account with an original balance over that amount can stay on a credit report forever.

As stated here, I will admit there are some out there that can close with outstanding unpaid delinquencies (usually small amounts), but contrary to earlier posts, this is NOT the norm and it is not within Federal or Freddie/Fannie guidelines to do so. If the amount is substantial, more than $500, you can be assured they will want it paid as a closing condition. My info comes straight from lenders and personal experience, not from what brokers or realtors say.

So if a person wants to give it a go, by all means, have a crack at it. But don't whine if you have happen the same thing that happened to me: I believed the broker (over my mother's advice) and got sucker-punched at the last minute when the lender made paid current a closing condition. Or worse, the lender comes back later to call the note due*.

Most lenders also include a waiver form that allows them to make corrections after close without any further direction or consent from the consumer. This can include correcting "calculation errors" and send you a bill for it.

*In case you don't know what this means: It means the lender can, if they find out there was deceit or fraud in the application process, come back and call the note due in FULL immediately. Every mortgage for the past 20 years has this in the note.

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I second what Methuss shared here from my experience in the lending industry also. To clarify: I advise that the OP find a broker who can get him/her funded with payment of any defaulted accounts at the closing table. The title company (in FL) or closing attorney generates checks directly to the CA or OC just like they dispurse to anyone else owed from the transaction. That way, the loan can be funded (which makes everyone happy) and the damage to credit scores delayed until after this important transaction.

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Hello all!

I followed the advice by posting a question for Firstsource and he basically answered my question for me with this quote,

"Before I answer your question, some background.

There are several types of conventional (non-FHA-VA type loans) and they are loans that conform to Fannie Mae/Freddie Mac guidelines. There are also non-conforming loans-called Sub-prime (and a catagory between prime/conforming and sub-prime-just to keep it confusing)

With your collection not paid, you would not qualify for a conforming type loan. So your options are to pay the collection at closing or to go to another type loan-either "Alt-A" - the middle one, or sub-prime."

So, with this information, I contacted BofA and guess what? They told me this was a conventional loan, so I know I have to pay this. So, I started the loan process today and my lender stated she will contact me by Thursday with the outcome. However, I am going to call her tomorrow and ask if I could pay this account at closing. Also, I want to let you all know that as expected, this collection account came back verified from TU (as we thought it would) but, in a strange twist of irony, my credit score increased from 636 to 656! I am not sure why but I figured, this is the highest my TU score has ever been. Thus, I started the loan process today.

I will keep you all posted with the outcome.

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