Charged off cc, question

[BillyBadAss]

We are in the process of trying to buy a house using a VA loan, but we have a hit a slight bump in the road, as it were. My wife had a credit card with MBNA that was charged off over a year ago, probably closer to two years. Since then, MBNA accounts became Bank of America accounts, so it's listed as a charged off account with BofA, showing a balance of $0. Whichever collection agency has the account now isn't reporting it (no collection agency has reported this account since it was charged off). Our loan guy said he's in talks with BofA and the credit bureaus in an attempt to figure out how to make things right, at least right enough to go forward with the mortgage loan; he said if I don't hear back from him before lunch time on Wednesday to give him a call. I'm just wondering if there is anything we can do to speed this process along. I believe the amount charged off was about $3500 (rough estimate), but we don't know who we'd pay it to since BofA says the balance on the account is $0 and no collection agency is reporting it nor trying to collect.

Any advice would be appreciated. Thanks.

[willingtocope]

Technically, if the account was in arrears with MBNA when BofA bought it...then BofA is the CA (and, a JDB just to confuse things). If BofA's balance is $0, does it also say "sold to another lender"? If so, the BofA has passed it on to another JDB.

At any rate, if BofA says $0...then I would think the account is closed and over and done with as far as your mortgage is concerned.

[BillyBadAss]

If BofA's balance is $0, does it also say "sold to another lender"? If so, the BofA has passed it on to another JDB.

At any rate, if BofA says $0...then I would think the account is closed and over and done with as far as your mortgage is concerned.

BofA is reporting it as "sold to another lender" but that seems to be where the trail ends. We have no idea who the other lender is, which seems to be the major cause for concern. Our loan officer told us that the underwriter, or VA...whoever, would want to see that the balance has been paid to forego any possible future judgement, but we can't figure out to whom we'd have to pay the money.

[willingtocope]

Ah...I see. Well, yes, BofA should be able to tell you who they sold it to. Its unfortunate that the broker would want to see the JDB paid in full for something they only paid pennies on the dollar for. Even if the JDB does crawl out of the sewer later on, its quite likely you could fight them off in court (JDB's can seldom document the trail of ownership).

I vaquely remember other people with similar problems on the board here...their solution was to have the mortgage people put money aside to paying off the debt at a later time....then when nothing materialized, they absorded the funds. I'll suggest using the search function to see what you can find...I just wish I could suggest what you should search for

[BillyBadAss]

I'll suggest using the search function to see what you can find...I just wish I could suggest what you should search for

Yeah, I wasn't sure what search terms to use. I tried a couple different searches, when I didn't find anything too terribly helpful, I figured I'd post something (if nothing else, posting made that box go away that told me I hadn't posted in several weeks).

Could anything good come from my wife calling BofA or the CRAs, or should I just give the lender time to work on it before she tried to get involved? And is it possible that whoever bought this debt from BofA has sold it to another JDB, decreasing the odds that we'll ever find out who wants our money?

[tls032]

BOA will have all the information you need. Call them direct and they can tell you within a minute who is handling the account.

Here are a couple phone numbers you may use:

412-225-5723---this is an old MBNA number that will take you to collections...should be able to tell you immed.

Or use 800-475-2025

Likely, you were sold to sherman or someone similar. Let me know if you need any additional phone numbers.

Also, you should be able to settle the account with who ever owns it now. It is very easy and I can tell you anything you need to know. The debt purchaser can fax you or your lender a letter listing the reduced payoff and they can use it for underwritting and funding.

[willingtocope]

Could anything good come from my wife calling BofA or the CRAs, or should I just give the lender time to work on it before she tried to get involved? And is it possible that whoever bought this debt from BofA has sold it to another JDB, decreasing the odds that we'll ever find out who wants our money?

I'd suggest you just wait. In the mean time, I'll see if I can find what I was referring to...

[BillyBadAss]

I'd suggest you just wait. In the mean time, I'll see if I can find what I was referring to...

Thanks for the help, I really appreciate it. I'll continue searching on here to see if I find any more information relevant to our current dilemma. I did find this thread that appears to the same situation, with the exception that they apparently knew who the collection agency was. Unfortunately the person that started the thread didn't come back to say whether or not they paid it, or how things worked out.

I'll continue checking this thread and searching, but I have to get back to work.

[tls032]

Look, you have to decide what you want to do. If you know the debt is yours and you want to have it paid, taken care of, and done with...you could have that information in 5 minutes.

If you are looking to avoid paying it (more power to you), then follow another route!

Good luck!

[firstsource]

Just don't pay anything on any old bill until the last minute-at closing. It rarely happens that a lender will check credit at the last minute, but eveyone is being extra cautious lately so it is hard to tell what they might do.

If you pay the bill off before closing it will cause your credit score to drop-in some cases it can drop a lot-and that could have a big impact on your loan.

Last comment: Once a collection agency knows that you are trying to purchase a home or an auto, they become difficult to work with to get a deal/reduced payments. If you are outside the SOL-which you probably are-that can give you some leverage.

Charles

[BillyBadAss]

If you are looking to avoid paying it (more power to you), then follow another route!

Maybe I'm just taking this the wrong way, but I don't really appreciate the insinuation that I'm trying to avoid this debt. Nowhere did I say I flat-out refused to pay it, though I did mention that this is my wife's debt, not mine; it was hers before we were married. And as I mentioned, we have no idea who bought the debt, and part of the reason for this thread was to seek help in deciding whether my wife should get involved in tracking down the purchaser of this debt or let the lender do it, as he is trying to do now. Also, I can't call and find out, at least I assume I can't . When it was still MBNA I called on my wife's behalf and they refused to talk to me since I wasn't on the account, but they did add me as an authorized user and report it on my credit reports without my wife authorizing it (they did it twice). Assuming there's no reason to rush, I'll wait until my wife gets home before I have her call (she's out of state visiting her mother).

Just don't pay anything on any old bill until the last minute-at closing. It rarely happens that a lender will check credit at the last minute, but eveyone is being extra cautious lately so it is hard to tell what they might do.

If you pay the bill off before closing it will cause your credit score to drop-in some cases it can drop a lot-and that could have a big impact on your loan.

Last comment: Once a collection agency knows that you are trying to purchase a home or an auto, they become difficult to work with to get a deal/reduced payments. If you are outside the SOL-which you probably are-that can give you some leverage.

Charles

Since they're not reporting it now, would it still be a risky move to pay it earlier rather than at closing? I mean, would they seriously wait until the debt was paid to finally report it? I assume it would still be risky, but I just thought I'd ask, just in case the lender claims to need it paid off before we can move forward. Alternative ideas I can present to the lender, should this situation arise, would be appreciated.

Also, do you know of any differences that could come into play since we're doing a VA loan? I mean, do you think they'd be more likely to want it paid off before closing, or would there be no difference between a VA and conventional loan in this regard?

Thanks,

Billy

[firstsource]

Sorry if you misunderstood, but I am not suggesting that you never pay this obligation off. I do suggest that you do it in a way that does not possibly hurt your situation.

Sometimes Loan officers will misunderstand what the approval conditions really say. All you have to do is pay the bill at or before closing. It is my experience to not take unnecessary risks and one of them would be to pay the bill before absolutely necessary.

One of the problems about waiting until a bill is reported as paid is that due to the way bookkeeping is handled in credit reporting history information is that it can take up to 45-60 days after a bill is paid to be reflected on your credit report. That is also one other reason to pay the bill at closing. The loan won't fund/close until the bill is paid-and the title company can receive the money and pay it to the creditor and the lender will know that the bill will be paid. Title company's have legal responsibilites - and one of them is to make sure that all bills the lender says have to be paid, get paid.

Charles

[BillyBadAss]

Sorry if you misunderstood, but I am not suggesting that you never pay this obligation off. I do suggest that you do it in a way that does not possibly hurt your situation.

Sometimes Loan officers will misunderstand what the approval conditions really say. All you have to do is pay the bill at or before closing. It is my experience to not take unnecessary risks and one of them would be to pay the bill before absolutely necessary.

One of the problems about waiting until a bill is reported as paid is that due to the way bookkeeping is handled in credit reporting history information is that it can take up to 45-60 days after a bill is paid to be reflected on your credit report. That is also one other reason to pay the bill at closing. The loan won't fund/close until the bill is paid-and the title company can receive the money and pay it to the creditor and the lender will know that the bill will be paid. Title company's have legal responsibilites - and one of them is to make sure that all bills the lender says have to be paid, get paid.

Charles

I apologize, the first half of my previous post was directed toward tls032, not you. I understood your post quite well, I believe.

Assuming I hear nothing that changes the situation from my lender between now and when I call him tomorrow afternoon, I will take your advice and attempt to come to an agreement that the debt will be paid at closing.

Now, you said in an earlier reply that once a collection agency knows I'm trying to make a big purchase (home or auto), they can become difficult to work with. Am I running this risk because my lender is poking around, trying to track down this information? I can hope he's using some tact while working this issue, but would that be reason enough to have my wife go ahead and get involved (since it's her account) and ask the lender to step aside while she takes care of this?

Thanks a lot for the advice, both you and willingtocope. This information will go a long way toward keeping my wife from stressing out.

[firstsource]

That is a hard one to answer, but generally I would suggest that your wife handle it by herself. Make sure that you and she know the SOL regulations, If they say "We know that you are trying to buy a home", then her answer should be the truth, "Yes we are, if we can settle this account with you reasonably then we can get a loan with a lower rate, if we can not, we will have to pay a higher rate for a few years". No sense of urgency on her part. One of my favorite sayings is "if it was not written, it was not said" I would believe any collection agency's offer once I had it in writing.

Charles

[amortgageman]

I apologize, the first half of my previous post was directed toward tls032, not you. I understood your post quite well, I believe.

Assuming I hear nothing that changes the situation from my lender between now and when I call him tomorrow afternoon, I will take your advice and attempt to come to an agreement that the debt will be paid at closing.

Now, you said in an earlier reply that once a collection agency knows I'm trying to make a big purchase (home or auto), they can become difficult to work with. Am I running this risk because my lender is poking around, trying to track down this information? I can hope he's using some tact while working this issue, but would that be reason enough to have my wife go ahead and get involved (since it's her account) and ask the lender to step aside while she takes care of this?

Thanks a lot for the advice, both you and willingtocope. This information will go a long way toward keeping my wife from stressing out.

I would go ahead and have your wife try to contact MBNA/BofA and make the arrangements to pay off the note. If she can get nowhere with this, then have BofA send her a document that states such information. (This may also be used later to get the chargeoff off of your credit report). If they do have the infornation, then have her find out what the balance is, have BofA send a faxed statement and make arrangements to pay the account off at closing.

Armed with this information, your LO will be able to present this to the underwriter for review. Assuming the underwriter is not satisfied, then the amount of the chargeoff could be set aside in escrow until the owner of the debt is found. The underwriter could then approve the loan.

If the owner of the debt is never found, then the escrow should be returned to you. Willingtocope